The National Affordable Housing Trust (NAAHQ) recently reported that the Federal Trade Commission (FTC) issued guidance on the use of algorithms in rental housing. This is important information for Corinthian Asset Management, as it can impact how we utilize technology in setting rental rates.
The Problem: Algorithmic Collusion
The FTC is concerned about algorithms that recommend or determine rental prices across competing properties. These algorithms can analyze market data and suggest rents that maximize profits for landlords. While seemingly convenient, this practice can stifle competition and lead to higher rents for renters.
Why This Matters to Corinthian Asset Management
Here at Corinthian, we strive to offer fair and competitive rental rates while maintaining the profitability of our properties. While algorithms can be a helpful tool in rent analysis, it’s crucial to understand how they function and avoid any practices that might raise red flags with the FTC.
Key Takeaways for Corinthian Asset Management
- Independent Decision Making:Â The FTC emphasizes that algorithms shouldn’t replace independent judgment when setting rent prices. We should continue to consider factors like property condition, local market trends, and individual unit features alongside any algorithmic recommendations.
- Transparency is Key:Â Maintain transparency in your rent-setting process. This might involve using algorithms as a starting point for rent discussions but reserving the final decision for human evaluation.
- Focus on Fair Competition:Â Remember, competition is essential for a healthy rental market. Avoid using algorithms that share data or pricing strategies with competitors.
Moving Forward
Corinthian Asset Management can continue to leverage technology for rental pricing optimization while prioritizing fair competition and FTC compliance. By remaining transparent and using algorithms responsibly, we can ensure a win-win situation for both our residents and our business.
For further information, you can refer to the NAAHQ's article on the FTC's guidance: https://www.naahq.org/
Disclaimer: This blog post is for informational purposes only and should not be construed as legal advice. Please consult with legal counsel for any specific questions regarding FTC regulations and algorithmic use in rental housing.
