Skyrocketing rent prices have plagued New Jersey families for years.

Well, now city leaders in Jersey City and Hoboken say they've identified a major reason why rent costs increased by so much each year.

They say that algorithms from companies like RealPage are artificially raising rent prices and preventing competition in the market.

And a 2022 report by ProPublica found these rent setting algorithms allow landlords to coordinate and collude on rent prices, forcing renters into higher rates.

Ted Goldberg looks at new efforts to ban those algorithms.

Kevin Weller has a great view from his Jersey City apartment, though he's paid more and more for it in the three years he's lived here.

Rents started at about 4400 a month and then after renewing his lease.

It was over 1500 dollars increase, which was shocking, obviously.

And, you know, and then it was another $800 after that.

And then in our most recent renewal, they are attempting to up it to $7,111 per month.

Weller lives in Portside Towers with his partner and dog Penny.

They're just some of the residents facing steeper rents despite living in a rent controlled building.

Weller says they've all received the same explanation.

No, we can't give you a different rate because the software is telling us what the rate is and we have no control over it.

The software is an algorithm from companies like Real Page, which use a formula suggesting how much to charge for rent.

Weller is the lead plaintiff in a class action lawsuit against RealPage, which is also being investigated by the Department of Justice for possibly violating antitrust laws by sharing information among companies.

Weller has become a fixture at City Hall, saying local leaders took too long to take action against Equity Residential.

His landlord, the.

City, was helping the landlord out by not enforcing rent control.

And so but for the city's non-enforcement, RealPage would not have been able to affect the tenants here.

They are refusing to abide by a legal ruling and basically just thumbing their nose at the city in the courts.

Equity Residential did not respond to our request for comment.

City Councilman James Solomon introduced and helped pass a resolution asking the State Assembly to ban RealPage.

People's rents go up as high as 30 to 40% in one year.

And we think that's unconscionable.

David Brogan leads the New Jersey Apartment Association, a group representing landlords and developers.

It's up to the landlord at the end of the day to make a determination as to whether they're going to raise rents.

Brogan says it's unfair to penalize landlords for using AI when so many industries do the same.

If I wanted to use technology, I could gather that information much quicker than if you were to hire 100 people to call every single apartment complex in that area to get the same information.

All of these landlords should not be taking all the information that they have, sharing it with each other, and then saying, how do we get a dollar more?

How do we get a button more that should not be allowed.

Assemblywoman Yvonne Lopez plans to introduce a bill that would ban software like RealPage.

She says, quote, I understand the use of technology in our businesses and support innovation.

However, I cannot advocate for tools that victimize renters and potentially allow property managers to collude on rents so artificially impact the market.

I am committed to investigating the issue further and introducing legislation to clarify the role of rent setting algorithms and if found to be harmful, ban their use.

If there is a discussion about removing our ability to use technology, I would have liked to have further conversations with the legislature before anything like that happens.

In a statement, RealPage says their formula doesn't violate antitrust laws.

They denied allegations of keeping apartments vacant to raise rents.

And their formula hasn't changed much since they were investigated by the Department of Justice in 2017.

For NJ Spotlight News, I'm Ted Goldberg.