Council Committee Seeks Ban on Use of Software Blamed for Price Fixing in Housing Market

A San Diego City Council committee voted 4–1 Wednesday to ask the City Attorney’s Office to draft an ordinance prohibiting the practice of using software that is believed to enable price fixing in housing.

The maneuver has been targeted in anti-trust suits across the country.  Eight states, including California, joined a case filed against RealPage by the Justice Department in federal court in August.

The practice, called algorithmic pricing, according to the Justice Department, makes it possible for apartment landlords to set market rates, which “deprives renters of the benefits of competition on apartment leasing terms and harms millions of Americans.”

“When corporations use AI software to manipulate rents, they’re putting profits over people and turning homes into commodities,” said Council President Sean Elo-Rivera, who introduced the measure before the City Council Rules Committee. “We are taking a stand to stop this artificial inflation and protect our neighbors from price gouging.”

San Diego residents have faced skyrocketing rents that have made the market one of the most expensive in the nation. The average rent is 65% higher than the national average, at $2,489 per month for a two-bedroom.

Young adults, working families and seniors on fixed incomes, according to a news release from Elo-Rivera’s office, are particularly vulnerable. 

“The outrageous practice by market-rate developers colluding to eke out every rent dollar possible from older adults already struggling to avoid homelessness is an outrage,” said Paul Downey, president and CEO of Serving Seniors.  “We urge the full City Council to act swiftly to protect vulnerable renters and prevent homelessness.” 

Chief Deputy City Attorney Heather Ferbert, who joined Elo-Rivera in introducing the measure, said the city should take action because the anti-trust suit will take time to make its way through the courts.

“While I’m glad to see the Department of Justice and California Attorney General tackling this unfair business practice, people are suffering now. Banning the illegal use of technology to artificially fix rents locally will protect housing availability for all San Diegans and ensure a fair housing market, free from price manipulation,” she said.