Dynamic Pricing in Rental Housing
The Rental Housing Association has no comment on the previous federal administration’s Justice Department complaints about software providers and housing providers. However, it is interesting to note that the administration went after rental housing providers during the past 4 years in multiple ways including issuing a white house blueprint for a renter’s bill of rights and directing agencies like the Justice Department, the Consumer Protections Division and HUD to go after rental operators.
Here is what the National Apartment Association said about it at the time. READ MORE
Because of the administration change, it is unclear if the new justice administration will continue with these actions. Here are some background sources, however, for your story about this issue, which is called dynamic pricing in rental housing. READ MORE
Dynamic pricing—adjusting prices based on demand—is widely used in industries like airlines, hotels, and rideshare services. Rental housing operates in a similar way, with prices shifting based on market conditions.
BACKGROUND AND CONTEXT
It has been common throughout history for businesses, including rental housing providers, to survey competitors to see what they are charging, when setting prices. Just a few years ago rental housing providers would call their competitors monthly to learn their pricing. That was just one factor in setting their own pricing. Other factors included traffic (how many people are looking), demand, time of year, how the product compared to other housing options, etc.
Technology has evolved where housing providers no longer have to make monthly calls but now know what competitors charge using software tools similarly to how airlines do. Like airlines, housing providers often change prices regularly. This is called dynamic pricing. Pricing of rental housing depends on the above factors and the companies own business strategy. Use of software to provide recommendations on pricing is only one aspect of pricing.
Here is the definition of dynamic pricing:
Dictionary
Definitions from Oxford Languages
dy·nam·ic pric·ing
noun
- the practice of varying the price for a product or service to reflect changing market conditions, in particular the charging of a higher price at a time of greater demand.
Dynamic pricing is a common business tactic used in many industries. The most well-known may be airlines and ridesharing (think “surge pricing” with apps like uber).
Why It’s Common
- Market-Based Pricing – Prices naturally adjust, just like in other industries.
- Encourages Housing Availability – When pricing reflects demand, investment in rental housing remains strong.
- Standard Business Practice – Many industries use dynamic pricing to stay competitive and responsive.
To learn more about how dynamic pricing works in business, check out Harvard Business School’s overview.