San Francisco Considers Nation’s First Ban on Rent-Setting Software

According to an article from the San Francisco Chronicle, the city’s board of supervisor’s president plans to announce legislation that would bar landlords from using rent-setting software like Real Page and Yardi, which “housing advocates allege has contributed to skyrocketing rental prices across the country.” Reporter Laura Waxmann writes:

“If adopted, San Francisco would become the first local jurisdiction to ban rent price setting algorithms.” It would also “allow the City Attorney’s Office, as well as tenants, to pursue legal action for violations, including penalties of up to $1,000.”

The move comes after an expose from ProPublica drew attention in 2022 to the fact that software sold by Realpage was collecting proprietary data from landlords, many of which competed with each other, and feeding it into an algorithm that recommended what rents they should change. According to Propublic, “Legal experts said the arrangement could help landlords engage in cartel-like behavior if they used it to coordinate pricing.”

In June the FBI conducted a raid on a major corporate landlord in Atlanta that uses RealPage, which appeared to be part of a Department of Justice criminal investigation first reported by Politico in March (an investigation that the DOJ confirmed in July). According to an article from Popular Information, the use of RealPage by multifamily landlords in Atlanta coincided with a 56 percent rental increase in the city since 2016.

Waxmann also reports that “state and district attorney generals in Arizona and Washington D.C. have sued RealPage and more than a dozen of its landlord customers, and more than 20 lawsuits, primarily brought by renters in cities across the country, were consolidated in a Nashville federal court last year.”