The city of Providence, Rhode Island, is taking a Boston private equity real estate firm to court, alleging the firm used an algorithm to set the price of rental units in violation of a city ban on the practice.

The city alleges that Audubon Capital Partners used the algorithm to dramatically increase rental prices for units at 95 Lofts, a 59-unit multifamily building in the city’s Jewelry District. The firm then allegedly admitted to renters in writing that it used the algorithm, according to a city press release.

Property management for the building wrote to the renters that “lease rates are generated through a dynamic pricing system that evaluates several factors, including market conditions and the number of expected vacancies during a specific timeframe.”

“In some cases, the software may price certain lease terms higher if a larger number of apartments are projected to become available in that particular month.”

The action taken by the city was first reported by the Providence Business News. The firm has been summoned to respond to the complaint in Providence Municipal Court on June 22, The Boston Globe reported.

A pair of renters alerted the city to the alleged practice after they were told their rent would be raised 44%, from $2,554 a month to $3,684 a month for a 12-month lease for their 600 SF, two-bedroom unit. If they chose to rent month to month, the price would rise to $14K, The Boston Globe reported.

The council passed its ban on the use of algorithms to set rent pricing in May 2025. This is first enforcement action of that ban, according to the press release. The fine for violating the ordinance is $500 a day per violation.

Audubon Capital Partners didn’t respond to a request for comment.

When the city passed the ordinance, a press release said Providence was one of six major U.S. cities to do so.

The Boston City Council ordered a study on the possibility of a similar ban in January. A bill banning the practice is in committee in the Massachusetts Senate.

In January 2025, attorneys general from Massachusetts and Illinois joined the U.S. Department of Justice in its antitrust case filed in 2024 against RealPage for allegedly using algorithms to help landlords fix prices for rental units.

In December, RealPage and the DOJ reached a tentative settlement in the lawsuit, requiring the real estate tech company to put in place new guardrails for how its software suggests rent prices and how the company trains its artificial intelligence.

This is Audubon Capital’s first year as the owner of the property. The firm purchased it and another Providence property, the 92-unit Chestnut Commons, in January from two partnerships led by Providence-based Waldorf Capital Management.

Audubon Capital is tied to several Massachusetts properties, including multifamily buildings in Worcester, Shrewsbury and Walpole.