The recently released White House report blaming computer software for the massive increases in rental prices that Americans have suffered over the past four years is best described as a self-serving whitewash.
This report claims that algorithmic pricing software, used by property owners to set a market price for their rental properties, has artificially inflated rents. But this analysis conveniently ignores the primary culprit — the Federal Reserve’s dovish monetary policy and the Biden administration’s reckless economic agenda.
Inflation didn’t just happen; it was fueled by the Fed’s printing press and the White House’s excessive spending programs, which flooded the economy with trillions of dollars. This spending spree drove up demand across the board, which — by increasing competition for available properties — inflated prices.
The scary part is that it could have been even worse. If President Biden had gotten his way, Congress would have passed his “Build Back Better” plan, which would have flooded the market with an additional $5 trillion in spending.
Yet the White House’s new housing report completely ignores these underlying dynamics, choosing instead to scapegoat the market tools property owners use to set rents.
Algorithmic pricing software is not a price-fixing scheme. It is merely a tool that gives landlords a better real-time understanding of what supply and demand are based on local vacancy rates and other marketplace conditions.
Ride-share companies, airlines, hotels, and even government-run toll roads use the same family of software to help price their products. This software is the equivalent of using Kelly Blue Book to help assess the value of a car.
If rents are rising, it’s not because of the software that’s being used; it’s because of the underlying economic environment. Attacking these tools will do nothing to solve the root issues driving housing affordability challenges — namely, inflation, supply constraints, and regulatory barriers.
Not surprisingly, the report also conveniently ignores the administration’s failure to promote a dynamic housing market.
Thirty years have passed since former Housing and Urban Development head Jack Kemp made a forceful case that government regulations drive up the price of homeownership. Unfortunately, in the ensuing three decades, even more regulations have been enacted on the federal, state, and local levels, compounding the problem and leaving more renters to compete for the same number of properties.
Take the Biden administration’s energy agenda, for example. As early as Jan. 20, 2021, President Biden declared war on America’s energy production, canceling the Keystone Pipeline and restricting permits for drilling and hydraulic fracturing. These ideological policy choices, which were demanded by the far left in his party, drove up the costs of gasoline and of providing services and shipping goods, many of which are used to build homes. The predictable result? Rising housing costs.
Rather than incentivizing the construction of affordable housing through deregulation and streamlined permitting processes, the Biden administration has doubled down on restrictive policies that deter new construction. In fact, fifteen states and the National Association of Home Builders recently filed a lawsuit challenging new energy requirements that could increase the cost of a new home by $31,000.
The White House’s new housing report is an exercise in blame-shifting away from policies that have exacerbated inflation and housing shortages and onto software that reports and considers those realities.
If the administration is serious about tackling housing affordability, it should address the root causes — inflationary spending, the central bank’s out-of-control printing press, restrictive zoning laws, and costly building regulations.
Instead of demonizing the tools property owners use to navigate the challenging rental market, the administration should focus on creating a stable economic environment, reducing inflationary pressures, and encouraging housing supply growth. Until then, reports like this one are little more than attempts to distract from policy failures — and renters across the country will continue to pay the price.
Fortunately, a new era is upon us — one in which innovation is rewarded, not punished. It can’t come a moment too soon.
