In the latest example of politicians blaming technological innovation for their policy blunders, Vice President Harris recently criticized algorithmic pricing software for high rent costs. She went even further in her economic plan by endorsing legislation to ban the technology.
Unfortunately, Harris wrongly assumes that these tools are responsible for high rent prices when the high rent is a result of existing market conditions.
In her proposal, Harris urges Congress to pass the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act, which would give the Federal Trade Commission the power to enforce a ban on using software or services that use historical price data to recommend rent prices.
Politicians are rightly looking for solutions to address the high cost of housing. Unfortunately, many of these solutions are unlikely to help — and may even delay needed policy changes that would lower prices in the rental and housing market.
The American Consumer Institute recently explained in a letter to the city of San Francisco regarding its ban on AI in rental price decisions, the culprits of runaway housing costs are inflation and burdensome government regulations that make it unnecessarily difficult to build housing. There is no evidence that AI is responsible for price fixing. Scapegoating technology for these self-imposed policy failures is only a distraction that does nothing to address the root problem.
Unfortunately, this is not the first time AI pricing software has been scrutinized. Colorado recently rejected a bill that would have banned AI rent-setting programs. Meanwhile, several Las Vegas hotel operators were sued last year for allegedly using AI algorithms to set rates for hotel rooms — a decision now on appeal after it was thrown out for lack of evidence last May.
Read the full article here.
Trey Price is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.