Rental Market Regulation

Corporate landlords and real estate investors are increasingly using algorithmic software to set rental prices, relying on artificial intelligence to maximize profits rather than considering what tenants can afford. These pricing algorithms analyze market trends and competitor rates, often leading to coordinated rent hikes across entire neighborhoods, a practice that mirrors price-fixing. This overt coordination creates a cartel-like environment, with algorithms devoid of human involvement allowing bad actors to collude on out-of-reach rent increases. Perhaps most egregiously, these algorithms may on occasion recommend that apartment owners leave units vacant, to reduce supply and drive up prices. Colluding to create artificial vacancies to maximize profits while our city faces an extreme housing shortage is unconscionable.

RealPage, the company behind one of the most widely used rent-setting algorithms, dominates the market for this type of software. Instead of allowing landlords to independently set prices, RealPage’s system pushes participating property owners to raise rents together, preventing any one company from offering a lower rate. The U.S. Department of Justice has sued RealPage and several major corporate landlords, accusing them of using these algorithms to manipulate the rental market. Among the landlords named in the lawsuit are Cushman & Wakefield and Willow Bridge, both of which own properties in Rhode Island.

With corporate real estate firms rapidly expanding their control over the city’s rental housing, these price-setting algorithms are worsening Providence’s affordability crisis. Rents in Providence have been rapidly climbing, making it harder for working families to stay in their homes. The growing influence of largescale investment firms and rental management conglomerates is not just increasing costs, it is changing the character of Providence’s neighborhoods, driving longtime residents out and replacing them with an increasingly transient tenant base.

Providence’s housing crisis is further exacerbated by the growing number of student-occupied rental units in residential neighborhoods. While colleges and universities are critical to the city’s economy, their increasing reliance on off-campus housing has put additional strain on an already tight rental market. This has fueled displacement, driven up rents, and incentivized large-scale investor ownership of properties near campuses, particularly in neighborhoods surrounding Providence College and Brown University. 

Over the past two decades, limited on campus student housing options have left thousands of students seeking rentals in nearby neighborhoods, accelerating the transformation of long-standing residential neighborhoods into high-rent student housing enclaves. This shift has made it more difficult for working families to remain in these communities, increased absentee landlordism, and led to deteriorating housing conditions. While these challenges are particularly visible in Elmhurst, Smith Hill, and Wanskuck, similar pressures are being felt in areas near Brown University, RISD, and Johnson & Wales. 

Providence must take proactive steps to ensure that student housing development aligns with neighborhood stability rather than disrupting it. The Comprehensive Plan lays the groundwork for targeted zoning solutions, and the City Council and Planning Department are advancing a Student Housing Overlay District, which will: 

• Create tailored zoning regulations rather than broad buffer zones, allowing different approaches for different institutions. 
• Manage student housing density in residential neighborhoods by refining existing zoning laws and directing higher-density student housing toward designated areas. 
• Encourage purpose-built student housing in commercial zones adjacent to campuses, reducing the strain on surrounding communities. 
• Adjust parking requirements to address congestion and minimize the impact of student vehicles on residential streets. 
• Strengthen enforcement mechanisms to curb the unchecked conversion of homes into student rentals and reduce speculative real estate investment. 

By implementing these policies, Providence can protect neighborhood stability while accommodating student housing needs in a sustainable way. Managing this balance is essential to ensuring that the city’s housing market works for both long-term residents and students without exacerbating displacement and affordability challenges. 

In order to make sound policy decisions and effectively address the housing crisis, the city needs reliable data on the rental market. Currently, Providence lacks a comprehensive system to track rental properties, making it difficult to enforce existing tenant protections, identify patterns of corporate consolidation, ensure safe living conditions, and institute future policies that would require accurate and up-to-date information on ownership, rental prices, and housing conditions. A rental registry would serve as a practical tool to help the city implement its broader housing policies effectively, without imposing unnecessary burdens on small landlords.

The intent of this policy is to provide the city with the basic information necessary for responsible governance. A rental registry would complement—not duplicate—the statewide lead-safe rental registry, working in tandem to provide a clearer picture of the housing landscape while avoiding double fees or penalties for landlords.

The City Council has already taken an important step toward improving transparency in the rental market through the Multi-Unit Dwelling Ordinance, introduced by Housing Crisis Task Force member Councilwoman Shelley Peterson and passed in November 2024. This ordinance requires owners of buildings with six or more units to register their properties and designate a local property manager if they live out of state. This policy has provided a foundation for accountability while respecting the realities of property ownership. The rental registry proposed in this report builds on that framework, extending the benefits of transparency and good governance to a broader segment of the housing market.

By expanding the principles established in the Multi-Unit Dwelling Ordinance, a rental registry would:

• Improve the city’s ability to track rental trends and ensure housing policies are responsive to real conditions.
• Help distinguish between responsible property owners and absentee corporate landlords that contribute to neighborhood destabilization.
• Strengthen enforcement of existing housing regulations without overburdening small landlords.
• Work alongside the state’s leadsafe rental registry to streamline compliance rather than creating redundant requirements.

This is about having the tools needed to make informed decisions, protect tenants from bad actors, and ensure that Providence remains a city where renters and homeowners alike can thrive.

Providence was recently ranked the least affordable metro for renters in the country. From March 2023 to March 2024, rents rose by 16%, pushing many working-class residents out of their homes and contributing directly to displacement and homelessness. Without intervention, this trend will continue, turning Providence into a city where only the wealthy can afford to live.

Rent stabilization is a strategy that cities across the country are using to slow the increase in rent costs beyond the means of their residents and prevent family displacement.

Rent stabilization policies limit the frequency and amount (usually by percentage) of rent increases, ensuring that renters can predict the cost of their housing from month to month. Rent stabilization ensures that increases are reasonable and predictable, providing tenants with housing security while allowing landlords to earn fair returns.

The Task Force recommends that the City Council explore rent stabilization as part of a robust housing affordability plan for the City of Providence.

A well-designed policy would:

• Cap annual rent increases
• Maintain rent stabilization when a unit becomes vacant, preventing excessive rent hikes between tenancies.
• Allow landlords to apply for limited rent increases to cover documented building wide capital improvements, with cost pass-throughs capped and phased out once costs are recouped.
• Ensure exemptions for small landlords renting a limited number of units while applying protections broadly to multi-unit buildings.
• Require landlords to provide 90 days’ notice for any rent increase, ensuring transparency and predictability for tenants.
• Establish clear penalties for landlords who attempt to bypass regulations through unjustified evictions or excessive rent hikes.
• Take other annual costs into consideration, such as taxation rates.

Cities that have successfully implemented rent stabilization have paired it with just-cause eviction protections, rental registries, and affordability preservation programs. By incorporating these elements into Providence’s approach, the city can create a policy that is not only fair and effective but also durable and resistant to legal and political challenges.

Rent stabilization can—and must—coexist with a healthy rental market that is compatible responsible landlords. In Providence, many small property owners have deep roots in their neighborhoods and take pride in providing stable, long-term housing to their tenants. These landlords, often referred to as “momand-pop” landlords, are often part of the solution, and will play a key role in moving Providence out of its housing crisis. A well-crafted rent stabilization policy must protect tenants from exploitative rent hikes while ensuring that community-based landlords can continue to maintain their properties and earn a fair return. The goal needs to be to support good actors, including through reasonable policy approaches to property maintenance, inflation, and tax increases, but to rein in excessive, profit-driven practices by bad actors that threaten the stability of entire neighborhoods.

If Providence fails to act, rents will continue to rise unchecked, worsening homelessness and making it impossible for middle- and low-income families to remain in the city. Rent stabilization is not just a policy choice, it is a necessary step toward ensuring that Providence remains a livable, thriving city for all.

For more information, visit the Rent Stabilization webpage.