Don’t let Justice Department AI lawsuit damage Florida’s rental housing market | Opinion

As we enter 2025, Florida continues to be a beacon for new residents due to its unmatched weather and business-friendly environment. Not surprisingly, a new December 2024 study identified South Florida as the nation’s hottest rental market.

Encouragingly, despite soaring demand and exorbitant increases, rents in South Florida have steadily declined over the past two years, which is evidence that sound economic fundamentals and increased housing supply are fostering affordability and meeting the growing demand, instead of heavy-handed government policies such as rent control.

Unfortunately, this information seemed lost on the Biden administration’s Department of Justice, which appeared to allow other factors to inform its views on of the nation’s housing industry instead of what I feel is the data at hand.

Last year, due to rental prices rising uncharacteristically high during the height of the COVID pandemic and remaining high for a lengthy period after it, the DOJ blamed the nation’s housing affordability crisis on the software used by landowners to set rental prices.

In August 2024, the Justice Department and the Attorney Generals of eight states, not Florida, filed a civil antitrust complaint against RealPage for offering software that competing landlords allegedly have used to coordinate rent hikes and unfairly hit renters in the pocket.

This month, the DOJ expanded its antitrust lawsuit against RealPage, which is accused of unlawful algorithmic rent-fixing, to include six of the largest U.S. landlords while also proposing a settlement to resolve the case against one of the defendants.

If the department gets its way, it may compromise the currently thriving and unmatched Florida market.

The DOJ is correct that rental prices got high throughout the country, but the DOJ blaming software programs for these cost hikes is disingenuous. Inflation and interest rate hikes over the last four years caused the cost of nearly everything to increase, rent included.

The Artificial Intelligence-based software the DOJ is unfairly targeting only assists landlords in determining an accurate market value for their rental properties, considering multiple data points, such as availability, taxes, insurance and other fees, to suggest a rental price.

While landlords use this software as a guide, they still ultimately make their own pricing choices. Anyone familiar with Florida’s housing industry data knows that when property owners set their prices too high, their units often sit vacant, thus forcing them to ultimately reduce their prices. In other words, the law of supply and demand has proven enough to self-regulate the industry.

The DOJ’s actions against this pricing software will raise prices, not reduce them. Such technology has historically advised Florida’s landlords to lower their rates when the market conditions support doing so.

It is true that prices might still be high in some parts of the country, but they have also been coming down in others. Just look at Florida. Rental prices have decreased in the Miami, Orlando and Jacksonville while they have increased in Tampa.

As a licensed real estate property manager and professor of residential property management, I know the reason for this isn’t because some are using new pricing technology. Some parts of the state and country are doing a better job than others of increasing their housing supplies, which, by reducing scarcity, has decreased rent costs.

South Florida’s dynamics are more complex. While newcomers seek sunshine, some leave due to extreme weather. Rising HOA and insurance costs, driven by natural disasters and deferred maintenance, have made home ownership less affordable despite reasonable housing prices. This exodus has eased demand, reducing costs.

The point is that each housing market is unique, even in different areas of the same state. Blaming AI technology for an issue as complex is a simplistic thing to do, and it threatens to compromise the current success of the South Florida housing market.

Hopefully, new U.S. Attorney General and Floridian Pam Bondi, plus the rest of the incoming Trump DOJ, will correct the record — and soon.

It’s the only way to ensure the Florida housing market remains in its current strong position.

Daleik “Alex” Vaughn is an adjunct professor of residential property management at Nova Southeastern University’s Florida College of Business and Entrepreneurship in Davie.