After years of serving as a convenient political target, artificial intelligence is entering a new phase of the debate: one shaped not only by state and local experimentation, but also by a more assertive federal posture. A recent Executive Order on AI directed the Justice Department to create a Litigation Task Force to challenge state AI rules deemed inconsistent with federal policy — including on grounds that such laws unconstitutionally burden interstate commerce or are preempted by existing federal regulations.

AI is streamlining operations and reinforcing economies across the board. In my career, I’ve witnessed how AI powers innovation in travel, particularly operational infrastructure, personalized search, and booking efficiency. Yet, with things novel, local legislators are sometimes wary and strike first. 

AI-powered rental platforms have perhaps endured more lashes from state and local policymakers than all other industries combined. Why? Because elected officials want to show their constituents that they’re doing something to solve the housing affordability crisis, and unfairly blaming these technologies for withholding units from the long-term rental market and “price-fixing” is easier than pro-construction reform.

Lack of housing supply is the primary driver of high rents, not modern technology. Freddie Mac estimates a shortage of 3.7 million housing units nationwide, and Realtor.com puts the gap at over 4 million homes — explicitly linking the shortfall to zoning rules, permitting delays, and regulatory barriers. But tackling that challenge by relaxing zoning restrictions, streamlining permitting, and financing infrastructure like roads and sewer for new developments takes more work than pointing the finger at companies like Airbnb that provide technology for the management and marketing of short-term rentals. 

While establishing reasonable rules around short-term rentals makes sense, chasing technology used to manage them out of town does not. Thwarting efficiency won’t offset housing demand; adding more places to live will.

Many city councils, state legislatures, and state attorneys general have also been attempting to pin the blame for high rents on property management software for long-term rentals made by a company called RealPage. The software provider offers landlords market-based pricing tools, similar to the technology used in the lodging industry that was described by the Ninth Circuit U.S. Court of Appeals as simply a “tool in the struggle for commercial advantage”. 

Rather than rolling up their sleeves to develop a pro-building policy agenda, too many lawmakers have been saying, “Look, constituents – the big, bad AI company is the reason you’re forking over more of your paycheck for rent than you’d like.” Finally, the federal government has created a pathway for calling such laws into question.

The DOJ’s recently established AI Litigation Task Force will identify and challenge state laws targeting artificial intelligence, often pushed through by politicians who don’t fully understand the technology. Hopefully, data analysis to suggest fair market prices will, once again, be available for use in cities and states where government officials have been villainizing companies harnessing modern technology for short and long-term rental management in order to excuse their own role in the housing affordability crisis.

For rental platforms, AI algorithms analyze location, demand, seasonality, and competitor pricing to suggest appropriate rates. Rather than trying to force small and large investors to guess at the right price for units, policymakers could focus on helping constituents find ways to benefit from tourism and economic filtering in housing. From local business partnerships, to improved infrastructure made possible by a stronger local economy, to responsible tourism initiatives that generate jobs, the answer is to capitalize on opportunities, not undercut companies that enable them. 

Most importantly, to address concerns that short- and long-term rental platforms are driving up housing prices, state and local leaders should better balance the scale of supply and demand. When there are more places available to live than folks who are looking, prices drop. Austin, Texas, for example, has more than 11,500 short-term rental listings — one of the highest in the country — and hasn’t banned data-based rent tools used be landlords. But the city has experienced one of the largest rent declines in the nation thanks to a recent construction boom. In cities like San Francisco and states like New York that have restricted the use of market-based pricing technology, housing shortages deserve the blame for high prices.

The DOJ should accelerate its plan to rein in cities and states on warpaths against AI. Extinguishing innovation will not change the market dynamics that have emerged from years of housing policy decisions that have held back needed construction. AI is not the enemy…in fact, it can be America’s greatest ally.

Brandon Palumbo is a public policy professional specializing in technology and regulatory issues. 
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: zeb@hwmedia.com.