The use of algorithms lets landlords coordinate to set rent prices or manage vacancies in their buildings. Credit: Pete RososBerkeley has joined a handful of cities around the country in barring landlords from using popular pricing software that critics say has contributed to sky-high rents.
The City Council voted Tuesday night to prohibit the use of algorithms that let landlords coordinate to set rent prices or manage vacancies in their buildings. The ordinance is aimed at software products provided by companies such as Texas-based RealPage, which has been the target of class-action lawsuits from renters, as well as a federal antitrust complaint and lawsuit, alleging its algorithms have inflated rent costs nationwide.
Supporters of Berkeley’s new ordinance say landlords can still use market comparisons to set rents. But they take issue with RealPage’s software, which allows property owners to share data and operate more like a “cartel,” several speakers at Tuesday’s City Council meeting said. Those critics are concerned that the company’s price suggestion tools in effect mean landlords to work together to charge higher rents and manage when they put units on the market, constraining the supply of apartments.
“It amounts to illegal price-fixing,” said Debbie Potter, a former chair of Berkeley’s Housing Advisory Commission, which brought the ordinance before the council.
Similar bans have been adopted in San Francisco, Philadelphia and Minneapolis, and bills to prohibit the software have been introduced in the California Legislature. Backers contend banning the algorithms is a step that will help protect local renters and ease the housing crisis.
“Rents aren’t being set by the market — they’re being set by a skewed market,” said Rent Stabilization Board member Soli Alpert.
RealPage did not immediately respond to a request for comment on the Berkeley ordinance Wednesday. The company contends that a lack of housing supply — not the price suggestions it offers to landlords — is to blame for high rents. After San Francisco adopted its ban last year, RealPage spokesperson Jennifer Bowcock told SFGate the measure would “do nothing to make housing more affordable in the city.”
Councilmember calls for more new housing
It’s not clear how widely used the company’s software is in Berkeley. A Housing Advisory Commission report noted six large real estate firms that have been named in lawsuits over the use of the software together own more than 1,300 Berkeley apartments, though smaller landlords may also use the tools.
The City Council voted 8-1 to adopt the ban. Councilmember Mark Humbert, who cast the lone vote against the ordinance, said it would be difficult to prove landlords used the prohibited software to set rents, and echoed the argument that Berkeley should focus its attention on building more housing.
“The sort of price-fixing schemes this ordinance aims to prevent only work when there is scarcity and oligopoly in the market,” he said.
"*" indicates required fields
Send a private note to the editors.*
See an error that needs correcting? Have a tip, question or suggestion? Drop us a line.
This field is hidden when viewing the form
Embed URL
Nico Savidge is Berkeleyside's associate editor, and has covered city hall since 2021. He has reported on transportation, law enforcement, politics, education and college sports for the San Jose Mercury... More by Nico Savidge
English (United States) ·