The rent is too high in San Diego, but corporate landlords collaborating in order to set prices algorithmically — sending costs soaring well beyond market pressures — is now a thing of the past.
The San Diego City Council passed the Prohibition of Anti-Competitive Automated Rent Price-Fixing Ordinance in its final reading on Tuesday, which bans the use, sale, and licensing of software that enables corporate landlords to coordinate rent prices using nonpublic competitor data.
Algorithmic price-fixing is an increasingly common practice, currently under investigation by the U.S. Department of Justice and multiple states.
The ordinance aims to stop corporate landlords from using algorithm-driven systems to inflate rents behind closed doors in order to further extract profits from San Diegans.
“Housing is a human right — and no one should be pushed out of their community because of a profit-hungry algorithm,” said San Diego City Councilmember Sean Elo-Rivera, who first introduced the ordinance, in a statement.
The ordinance, which passed the city council on its first reading last month, will go in effect in 30 days.
“Today’s vote sends a clear message: San Diego needs to work for San Diegans, not out-of-town tech firms and corporate landlords rigging the system at the expense of working families.
“This is a win for renters, for transparency, and for everyone in our city who is committed to putting people before profits.”
The ordinance came after investigations revealed that corporate landlords have used software, like RealPage’s YieldStar, to coordinate pricing and suppress competition.
According to marketing materials from the software companies, San Diego renters may be paying up to $185 more per month — or more than $2,200 per year — because of algorithmic price-fixing.
The policy allows for the continued use of public market data tools and affordable housing compliance software.
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