San Francisco to ban software that "enables price collusion" by landlords
San Francisco's Board of Supervisors approved a ban on software facilitating price collusion among landlords, targeting RealPage and Yardi, amid concerns over rising rents and vacancy rates.
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San Francisco's Board of Supervisors has approved a ban on software that allegedly facilitates price collusion among landlords, specifically targeting companies like RealPage and Yardi. The ordinance, proposed by Board President Aaron Peskin, aims to combat rent-gouging practices by preventing landlords from using software that shares nonpublic data to coordinate pricing strategies. The initial vote passed unanimously, with a final vote scheduled for September 3. The ordinance is described as the first of its kind in the U.S. and is part of a broader effort to address rising rents and vacancy rates exacerbated by algorithmic pricing.
Critics, including the White House and the Department of Justice, have raised concerns about the legality of using algorithms for rent-setting, arguing that it violates antitrust laws. RealPage has defended its software, claiming it provides price recommendations that can be accepted or rejected by landlords and does not encourage keeping units vacant. However, allegations suggest that the software has led to increased rents and vacancy rates by allowing landlords to coordinate pricing without direct communication.
The proposed ban would classify such software as "algorithmic devices" and impose civil penalties for violations. RealPage has indicated that it may comply with the ordinance if it passes, while also criticizing the focus on nonpublic information as misplaced. The ordinance reflects ongoing tensions in the housing market, particularly regarding affordability and supply shortages in San Francisco.
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5 commentsIn fact, can you sue Zillow for publishing a Rent Zestimate? It does seem like the ordinance bans “provid[ing]… any algorithmic device”. An “algorithmic device” “perform[s] calculations of non-public competitor data” and “advis[es] a landlord… on the amount of rent that the landlord may obtain”. “Non-public competitor data” is “information that is not available to the general public” (such as data on historical rental ads on Zillow). I’m not sure whether Rent Zestimate would fall under the exception “(A) report that publishes existing rental data in an aggregated manner but does not recommend rents or occupancy levels for future leases” since they provide a Zestimate on an individual address, not “aggregated”. Someone should try suing Zillow.
It is also pandering by mayoral candidate Aaron Peskin, who has opposed many efforts to loosen zoning to increase housing competition. Where the Board of Supervisors can make a big difference at increasing competition, he has stood in the way (e.g. opposed SB 50 upzoning near transit, banned group housing because there was a “glut” of old units, increased the inclusionary housing fee/tax to reduce construction, empowers nonprofits to make demands on development). But he’s happy to do something that supposedly promotes competition but has no substantive impact.
A) encourage more supply
B) prevent landlords from observing rent prices.
Politicians: Let’s go with B! It will totally work.
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