Two years after becoming law, Philadelphia’s ban on using artificial intelligence (AI) algorithms to set rent is undergoing scrutiny in court.

Three lawsuits filed in July allege property management firms used software to collect non-public data and coordinate rents, violating the city ordinance.

“It is illegal for a software provider to give real estate lessors software that collect non-public competitor data and recommend rental prices, fees, rental terms, or occupancy levels,” notes one of the suits, filed by Philly resident Yiyao Liu against Dallas, Texas-based Willow Bridge Property Company and Richardson, Texas-based property management platform RealPage, “and illegal for a real estate lessor to pay for it.”

According to a Technical.ly report, Philadelphia’s law prohibits price coordination by collecting non-public rental data and using it to suggest rents, lease terms, or occupancy levels. It also bars landlords from agreeing not to compete in pricing.

“This suit, I hope, will be a strong test of whether the ban has had its intended chilling effect,” O’Rourke told Technical.ly, “and what can happen if firms don’t heed local law.” 

Plaintiffs contend RealPage’s tools, including AI Revenue Management, YieldStar, and Lease Rent Options, use non-public data from multiple landlords to recommend rents and occupancy levels. Yardi’s Yardi Matrix allegedly sources data from internal pricing surveys and property management software, according to Technical.ly.

The suits reference a 2024 DOJ settlement with RealPage for sharing information and raising rents, and describe ongoing legal scrutiny of the use of RealPage and Yardi products in Philadelphia and beyond.

RealPage, founded in 1998, sells software to property owners and property management companies. The company’s platform features tools to manage lease agreements, resident services, finances, and other aspects of rental property management.

Founded in 1984, Yardi Systems provides similar products for property owners and is one of RealPage’s largest competitors, according to Technical.ly.