America's Housing Crisis Is Manufactured: How Price-Fixing Algorithms Built It

Two things can be true at once. The United States is in the midst of a severe, ongoing housing crisis, and yet the country is not suffering from a shortage of places to live. Right now, around three in ten American households and roughly half of all American renters struggle to afford their homes. More than 750,000 people are homeless. By one common estimate, the population needs around 3.8 million more homes than are currently available.

But at the same time, in the same country, in the same cities and communities, there are over six and a half million homes sitting vacant right now, deliberately held off the market at a moment when they are desperately needed. The arithmetic does not add up, and when the arithmetic does not add up, the most reliable instinct is to follow the money.

Follow the money on America’s housing crisis and the picture clarifies quickly. There is a rot at the core of the system: data-powered price-fixing, deliberate market manipulation, and a tangle of financial incentives that push builders and landlords to ensure that people do not get the housing they need. Ordinary Americans are facing a housing crisis, but not because America lacks housing.

Key Takeaways

The United States has roughly 6.5 million homes sitting vacant and is estimated to need about 3.8 million more, meaning the raw supply of dwellings is not the binding constraint on the crisis.
RealPage, a Texas-based software firm owned by private equity, supplies an algorithm that lets landlords coordinate rents without overtly colluding, and at its peak it was used to manage around 16 million units, over a third of America’s 44 million renting households.
One antitrust analyst estimates RealPage’s business model alone may account for a quarter of all rental inflation between 2020 and 2024, in a country where shelter costs have driven the bulk of recent inflation.
Landlords are incentivized to restrict access in two ways: by drip-feeding new units onto the market and by letting unaffordable apartments sit empty for tax write-offs rather than crashing prices.
The dynamic extends well beyond rentals into home sales, realtor practices, building obstruction, corporate landlords, and short-term rental conversions by platforms like Airbnb and Vrbo.
Cities and states including New York and California are now cracking down on algorithmic price-fixing, and the Department of Justice has sued RealPage, but prices have not fallen to match.
Even if every contributing problem were fixed tomorrow, the market has already undergone a fundamental reset; the price increases and unaffordability would not simply unwind.

The crisis exists because Americans are being squeezed by a massive, coordinated campaign to extract profit from a basic human need. The shortage is not of homes; it is of access to homes that already exist.

Supply, Demand, and Why Housing Breaks the Rules

Housing is a commodity like any other, and understanding any housing market starts with the most basic principle of economics: supply and demand. When demand is low and excess supply is high, those who hold that supply are forced to offload it, cutting into their own profits and lowering prices so they are not stuck with something they do not want. When demand is high and supply is low, sellers do the opposite, setting prices as high as they can without pricing out the buyers most willing to make sacrifices.

When there is plenty of housing and few prospective customers, renters and homebuyers get good deals while sellers and landlords make thinner profits. When housing is scarce and everybody wants a place to live, sellers and landlords swell their margins and discover just how much people will pay to live where they can.

But housing does not behave like the rest of the economy. While an especially elaborate home or apartment can be a luxury good, housing is fundamentally shelter: a non-negotiable human need. An absence of shelter is not a mere inconvenience; it is a state of homelessness, and avoiding that is a profound priority for anyone, in the United States or anywhere else.

The Power Imbalance Built Into Shelter

Because housing is simultaneously a basic necessity and a commodity governed by supply and demand, the relationship between people seeking housing and people selling or renting it is not an equal one. If you own a spare home to sell or rent out, you need that home far less than the person who would actually live in it.

In times of high supply and low demand, that imbalance barely registers. But it becomes decisive, fast, when demand is high and supply is low. For a buyer, competing for housing is nothing like competing for a limited-release luxury watch. It is a competition to meet a basic need, and when demand outstrips supply, someone, somewhere, loses out entirely.

That dynamic hands enormous power to whoever has housing to offer. Consider a household earning four thousand dollars a month. They would never spend half that income on installments for a fancy watch. But if the only available apartment in their area charges two thousand dollars in monthly rent, the choice is stark: become homeless, absorb the steep costs of moving somewhere cheaper, or write that two-thousand-dollar check every month.

In a seller’s market, prices climb easily even before anyone rigs the game. And if you find a way to rig the game in a seller’s market, profits go through the roof.

RealPage and the Legal Grey Area of Price-Fixing

That is where RealPage enters the story. RealPage is an American software company, founded in 1998 and run out of Texas, owned today by a private equity firm called Thoma Bravo. It does not own a single apartment and has never built or sold a single home. Yet over the past several years it has arguably had a bigger and more catastrophic impact on the U.S. housing market than any other single company.

The reason is an algorithm with one simple task. It looks at what landlords are charging for rental properties in a given area and calculates what a hypothetical landlord could demand for a new apartment, setting an asking price as high as possible while staying reasonably confident that someone would be willing to pay.

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If all the landlords in a neighborhood, or a city, got together to work out that number themselves, that would be flagrantly illegal. They would be forming a cartel and engaging in price-fixing, controlling their prices collectively to eliminate the free competition American markets are supposed to rely on. RealPage offered an alternative. In exchange for payments to access the algorithm, and data supplied by landlords about what they were charging on each property, RealPage issued a “recommendation” about what prices should be.

A Cartel Without the Conversation

RealPage never manually changed prices on any home, and it had no control over whether landlords followed its recommendations. Landlords were not changing their prices based on information gleaned by coordinating directly with competitors; they were simply following the recommendation of a third-party service, using an algorithm they were not privy to. In essence, RealPage created a way for landlords to engage in price-fixing without actually engaging in price-fixing.

Before naming the scale, it is worth pausing to guess. Picture the number of individual housing units RealPage was being used to manage at its peak, and choose a figure that feels unreasonably high. The real answer is sixteen million units, across hundreds of cities and towns. That is over a third of the 44 million renting households the United States even has.

This has not gone unnoticed. Like many corporations that find a legal grey area, RealPage now faces authorities determined to outlaw what it does. In 2024, the company was slammed by the U.S. Department of Justice as a blatant price-fixing scheme, plausible third-party deniability be damned.

Senators have introduced legislation to prevent rental cartels, cities have banned the service, and states including New York have banned RealPage and other algorithmic price-fixers outright. But in hindsight, the damage is already done; RealPage took a growing housing crisis and made it far worse.

How a Few Algorithms Devastate a Whole Market

When a few scattered landlords use algorithmic price-fixing, the results may be barely noticeable. But when a majority, or even a supermajority, of landlords in an area all use the same services to set prices, the outcome can be devastating. To be clear, RealPage and services like it are not directly taking homes off the market. If a small city has ten thousand rental units and every landlord collaborates through a third-party service to set prices, that does not convert any of those units into some other kind of space.

Landlords are nonetheless incentivized to restrict the public’s access to housing in two ways at once. First, they want to avoid introducing too many rentals at once, because increasing supply drives prices down. But if landlords can coordinate so effectively that prices never drop, the next step is not merely to hold steady and collect a fixed income. The next step is to push that number higher, as soon as it can climb without driving people out of the market entirely.

In desirable areas, where ordinary people have already gotten used to gritting their teeth and paying steep rents, and have built whole lives they will not abandon, it is easy to keep rents ticking upward year over year. Those people will find a way to pay even more, even though the thing they are paying for has not improved. That only works if landlords ensure new apartments do not arrive quickly enough, or in great enough numbers, to accidentally create real competition.

Holding Homes Empty on Purpose

Landlords can drip-feed a few extra units into a market each year and get a few more people to pay high prices without upsetting the entire ecosystem. But as soon as the situation becomes even slightly competitive, with landlords undercutting each other, the system collapses. From the landlords’ collective perspective, everyone stands to lose if that is allowed to happen, so it is prevented.

The evidence shows up in the vacancy numbers. One 2023 report from LendingTree identified about 5.5 million vacant housing units across America’s fifty largest cities in 2022, but found that only one-quarter were actually being advertised for rent or sale, with another eight percent undergoing reservations. The rest, around two-thirds of the total, were simply being held off the market without a clear cause.

There is an even more insidious mechanism at work. As apartment prices climb, there comes a point where households simply cannot live in a certain area, because the required income exceeds their means. When lower-income renters are forced out, those apartments may stay off the market for a while, because if people leave so quickly that an influx of new offerings would crash prices, landlords would rather hold them empty.

They cannot collect rent on empty units, but they can use them for tax write-offs while paying far lower utility, maintenance, and management costs to watch over rooms collecting dust. All the while, services like RealPage harass landlords to keep jacking up rents, knowing that once incomes grow, most landlords find a way to stomach the moral implications.

The Domino Effect Across Cities

As families are priced out, they migrate to nearby suburbs where prices are more manageable, creating increased demand in another area and letting landlords there raise their prices too. The renters and families caught at the bottom of this equation watch the housing they can actually afford become scarce, and then nonexistent. The units are not gone; they are in the same place they have always been. The only difference is that the people who used to afford them no longer can.

There are, as noted, enough vacant properties across the U.S. to house those in need, and a fair share of them are not being held off the market deliberately. But accessing those other units would often require uprooting entire lives to move somewhere not gripped by a hyper-competitive, manipulated market. Those tend to be areas where opportunity is lacking, where people could not keep the jobs, or even the types of jobs, they have now.

People move to major metropolitan areas because that is where employment and opportunity concentrate, and the people behind algorithmic price-fixing know families will go to great lengths to retain access to that opportunity. They will find a way to stay for as long as they can, even if they have to pay through the nose to do it.

The Inflation Connection

The results of collective price-fixing compound quickly, driving rent inflation across a given metropolitan area and nationwide. Antitrust expert Matt Stoller, writing in September 2024, estimated that RealPage’s business model alone may account for a full quarter of all rental inflation between 2020 and 2024, without even adjusting for its impact since 2016, when, by its own materials, it reached the critical mass of landlord users needed to start price-fixing entire areas.

That rental inflation matters in a country where inflation has become salient enough to swing entire elections. According to Consumer Price Index figures released around late summer 2024, and quoting Stoller directly, “rent went up by 5% over the past twelve months, and […] the cost of shelter accounts for 70% of all inflation for the last twelve months.” By building a great, value-extracting dam in the middle of the housing market, companies like RealPage caused economic chaos that went far beyond rentals alone.

Nationwide, rental prices rose by over thirty-three percent between the start of the COVID-19 pandemic in 2020 and the summer of 2024, according to Zillow. The Consumer Price Index pegs the rise at twenty-four percent across all urban areas. Zoom in on individual cities and the picture worsens: in Atlanta, rents increased by fifty-six percent from 2016 to 2024, far outpacing changes in supply and demand but tracking perfectly with the growing influence of price-fixing algorithms.

A Pattern That Spreads Itself

According to the Department of Justice, RealPage spent years wielding outsize influence in some of America’s biggest cities, including Houston, Denver, Boston, San Diego, Seattle, San Antonio, and Washington, D.C., alongside other metro areas that together host around one hundred million people. Landlords do not even have to use RealPage’s services to see their fortunes grow; they just have to watch the market closely and imitate its pricing diligently enough to keep pace.

Even in rental markets where RealPage was not a factor, prices still went up, partly because other algorithmic services joined the game, and partly because as people are pushed out of some metro areas, they are inevitably pushed into others, where demand climbs and the whole process repeats.

None of this is an accident, and the price-fixers know precisely the impact they have had. Back in 2022, when ProPublica journalist Heather Vogell first exposed RealPage as a driver of nationwide rent increases, a RealPage executive was asked what role his algorithm had played. His response: “I think it’s driving it, quite honestly.”

One developer of the algorithm claimed the change could not have come from independent leasing agents, because they had, quote, “too much empathy.” America’s housing market is far too complex to blame a single company for the entire crisis, especially now that cities and states are cracking down, but the level of distortion RealPage achieved puts its actions at the very heart of it.

The Compounding Factors: Sales, Realtors, and Builders

RealPage is not the whole story, so it is worth identifying the other factors that make the situation worse. First, set aside the vacancies that are not really to blame: vacation homes, secondary properties, units needing a remodel or routine maintenance, units sitting empty briefly between leases, homes mid-sale, and buildings slated for demolition or repurposing. None of that is the problem. The focus belongs on two types of units: ones ready to host occupants but not offered at reasonable prices, and ones that could be built to ease a shortage but never are.

Start with homes for sale. As rents rise, property values rise, because a person buying a property to rent would stand to make far more today than a few years ago. As values climb, so does the price of existing and new buildings, whether a buyer plans to live there or rent it out.

People who would have bought homes near where they work are priced out. Worsening matters, realtors are just as capable of collective, algorithmic price-fixing as landlords, sometimes through services oriented toward sales, sometimes by monitoring rental fixers like RealPage and doing the math themselves. In 2023, the National Association of Realtors lost a federal trust-busting lawsuit, but insiders and antitrust experts argue the settlement did not go nearly far enough to break up the cartel realtors created.

Then there are builders, the companies you might expect to see the shortage and build more units to capitalize on obvious demand. For some reason, that is not happening. These are the problems at the heart of America’s new “Abundance” movement, named after a 2025 book of the same name by Ezra Klein and Derek Thompson. As the book argues, prospective homebuilders would love to build more, but face prohibitive barriers: environmental regulations seen as too strict, especially in liberal cities; zoning rules deemed too restrictive; energy and transport infrastructure tangled in so many external requirements they become practically impossible; and vocal community groups fighting hard to ensure new developments go in somebody else’s backyard.

Why Building More Is Not Enough

That argument, by itself, does not address the larger issues. Building new units does little good if the people marketing or buying them just treat them the way landlords and realtors treat existing properties. If all those new units are held off-market until they can sell for the same high prices as everywhere else in an urban area, simply building them does not meaningfully address the crisis.

That points to another issue: a lack of political will, and practical ability, for city or state leaders to break a housing cartel and force prices down. A city could facilitate the construction of a few thousand new units and coordinate so they all hit the market at once, at prices that deliberately undercut established landlords. But doing so would demand tremendous resources in a years-long initiative, while battling backlash from unenthusiastic taxpayers and local groups who do not want large developments dropped into their communities. Even past those hurdles, the city would face the same people who control existing housing, likely willing to pay hefty legal fees to remove a long-term threat to their bottom line.

After builders comes the role of corporate and institutional landlords, firms that buy up massive amounts of property before putting it on the market. Even if those firms could not collude with others, they do not have to compete with themselves. Once a company or two gains a foothold in a city’s rental market, it can exert outsize influence on prices citywide.

Some operate with exactly that purpose, buying up affordable units whenever they become available and slowly raising the floor of rental prices while buying out anyone who tries to undercut them. Such firms rarely hold a controlling stake in any one market, but they play enough of a role in every market that their influence cannot be ignored.

Seller Standoffs and Short-Term Rentals

Even individual home sellers have gotten used to high prices. In 2025 especially, they proved unwilling to compromise on price to sell homes they intended to give up. The year saw a noticeable dip in the number of people looking to buy homes, but also a massive increase in prospective sellers who, instead of lowering prices to entice a buyer, simply took their homes off the market to wait for the next wave of purchasers. One would think falling demand would lead to falling prices, but instead the result is deadlock, with sellers now convinced they can wait buyers out.

In metro areas already strained for affordable housing, secondary players can have a disproportionate, destabilizing impact on whatever is left. Take companies like Airbnb and Vrbo, buying up apartments or homes in bustling, tourism-heavy cities and converting them into short-term rentals. Offered for a hundred, two hundred, or five hundred dollars a night, those rentals are completely unaffordable for anyone trying to actually live in a given city, but the profit incentive for owners is undeniable.

A three-bed apartment in Manhattan might rent for four thousand dollars a month on the low end, netting a landlord a stable 48,000 dollars a year. But even on the low end, that same apartment could be rented for some six hundred dollars a night on Airbnb. The owner would only need to fill it for eighty nights to match the annual rent, and a fully booked unit would pull well over two hundred thousand dollars in revenue.

Those apartments are not new builds; they come out of the existing rental market, and every conversion to a short-term rental disappears from the long-term housing pool. In a constrained city, subtracting even a couple hundred such units can be catastrophic. In 2022, over half of Miami’s 339,000 vacant apartments were being used as Airbnbs or vacation homes, a problem common across America’s most sought-after tourist destinations.

A Manufactured Crisis With Lasting Damage

Add together all those factors, plus variables like shifting desirability, broader economic turmoil, rent-control avoidance, and people holding onto homes while waiting for values to rise, and you arrive at America’s ongoing housing crisis. The country is immersed in a ruinous cycle: driven and reinforced by housing cabals like RealPage, protected by the unwillingness of builders to introduce new homes, and confounded by all the other ways to make money off a property besides offering it at an affordable price.

The housing units are there, and the people who need them are there, in the same cities at the same time, passing like strangers in the night. They are being kept apart, deliberately and proactively, by people who stand to make lots of money by ensuring housing does not become affordable for those who need it most. Worst of all, the damage is done. Even if every issue were addressed tomorrow, the market has endured a fundamental, all-encompassing reset.

Prices have already risen, cities have already been rendered unaffordable, and even if the problems stop getting worse, that does not mean they would be undone.

There may be a light at the end of the tunnel. States like New York and California are cracking down on algorithmic price-fixers harder than ever, and forces like the Abundance movement are working to stimulate homebuilding. Some wonder whether growing economic turmoil, a potential housing-market crash, or a burst AI bubble might unbalance the crisis enough that units finally become affordable again. For now, policymakers are in a difficult spot, working to change an industry manipulated beyond recognition.

That change is possible, but a price-fixing cartel active for the better part of a decade is not easily dismantled. It will be a while longer before America’s housing crisis can finally sort itself out.

Presented by

Simon Whistler

Simon Whistler is one of YouTube's most prolific educational creators. HomeFronts is his deep dive into geopolitics, modern conflict, military history, and the civilian and societal dimensions of global events.

Frequently Asked Questions

Is there actually a shortage of housing in the United States? Not in the simple sense. The population is estimated to need about 3.8 million more homes than are available, yet over 6.5 million homes sit vacant, with many deliberately held off the market. The crisis is one of access and affordability, not a raw absence of dwellings.

What does RealPage actually do? RealPage is a Texas-based software company that does not own or build housing. Its algorithm analyzes what landlords charge in an area and recommends the highest rent a landlord could plausibly demand. Landlords pay to access it and supply their own pricing data, effectively coordinating prices without directly talking to competitors.

Why is using RealPage different from illegal price-fixing? If landlords met to set prices together, that would be an illegal cartel. RealPage created a grey area: landlords follow a third-party recommendation from an algorithm they cannot see, rather than coordinating openly. The Department of Justice has nonetheless characterized it as a blatant price-fixing scheme.

How much did RealPage contribute to rising rents? Antitrust expert Matt Stoller estimated RealPage’s model alone may account for about a quarter of all rental inflation between 2020 and 2024. At its peak the software helped manage around 16 million units, over a third of the country’s 44 million renting households.

Why would a landlord leave an apartment empty instead of renting it? Empty units can be used for tax write-offs while costing far less in utilities, maintenance, and management. If filling vacancies quickly would force prices down, landlords may prefer to hold units off the market to protect overall rent levels rather than collect rent on each one.

How do Airbnb and short-term rentals affect housing? Converting a long-term apartment into a short-term rental removes it from the housing pool available to residents. The income can dwarf ordinary rent, so the incentive is strong. In 2022, over half of Miami’s 339,000 vacant apartments were used as Airbnbs or vacation homes.

Are governments doing anything about it? Yes. The Department of Justice sued RealPage in 2024, senators introduced anti-cartel legislation, and states including New York and California have banned algorithmic price-fixing or are cracking down harder than ever. But prices have not fallen to match, and much of the damage is already locked in.