By Caitlin Sugrue Walter, Ph.D. Senior Vice President of Research
Caitlin Sugrue Walter, Ph.D., is Senior Vice President of Research, with primary responsibility for conducting NMHC's research on apartment industry trends. Prior to working at the Council, Caitlin was an analyst at a real estate advisory firm. Caitlin has a B.A. and B.S. (Planning and Public Policy, Criminal Justice) from Rutgers University. She also holds an M.A. in Urban and Regional Planning and a Ph.D. in Planning, Governance and Globalization with a concentration on metropolitan economies and development from Virginia Tech.
Pricing software used by many housing providers is once again in the news, serving as a scapegoat for the systemic shortage of housing across the country which is, in fact, the result of decades of government inaction. One recent example is the Washington Post’s article dated January 8, 2025, claiming, “millions of rents across the United States may now be set using one company’s algorithmic software, according to a federal lawsuit and a Washington Post analysis.” The methodology used in the Post’s analysis has flaws, and simply adding qualifying terms like “may” and “could” to a misleading statement does not make it true.
The shortage of rental and owner-occupied housing that is affordable in the U.S. is well-established and widely covered by numerous media outlets. Well-documented research shows that when there is a shortage of housing, thus the basic rules of supply and demand apply: Prices increase as demand increases due to the shortage. There is also substantial research to prove the opposite effect—as more supply is added, price increases slow, stop and even reverse into declines.
Even the Post highlights a market where the increase in housing supply has already resulted in rent decreases—Austin, Texas. Austin went from less than 10,000 housing units completed in 2018 to nearly 35,000 completions in 2024 and rent growth has gone from 3.4% year-over-year in 2018 to -3.9% year-over-year, according to CoStar. Ironically, according to the Post, Austin is the market with the highest concentration of pricing software use.
We agree with the underlying premise that there is a critical housing affordability crisis in the U.S. as millions of American renters are unable to afford rent, and even more renters are cost-burdened. However, the idea that concentrated use of pricing software leads to higher rents is simply not borne out in the data, and in fact, the data presented shows the opposite is true—prices do in fact often go down in areas where there are a significant number of new rental housing communities. In other words, when there is enough, or too much, supply to meet demand, the same fundamentals that raise prices will also lower prices.
Aggregated rent data at a variety of geographic levels actually helps housing providers respond to the market in a timely fashion and reduce rental housing prices in real time when supply and market conditions dictate. This in turn helps renters access available housing more quickly. For decades, the federal government has used aggregated rental housing data collected from some of these same software providers, as well as “call arounds” and other methods of rent data collection, to set rents that are the basis for the expenditure of over $32 billion annually in housing subsidies through the Section 8 programs.
We must follow the facts. The bottom line is the use of software that aggregates rental housing data does not set rents—market conditions do, so when housing supply goes up, housing costs go down. If we want to solve the housing crisis there is really only one effective answer: Demand that policymakers enact laws and regulations that will help us build the housing America needs.
Please reach out to Jim Lapides, Senior Vice President of External Affairs, to learn more.
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