Santa Ana Considers Rent-Fixing Software Ban
The Santa Ana city council is considering a ban on rental price-fixing software used by landlords. The proposed ordinance aims to prevent property owners from using algorithms to collude on rent prices, which critics argue artificially inflates housing costs. The move addresses growing concerns about housing affordability in the city.
The ordinance targets software from companies like RealPage and Yardi, which are facing dozens of lawsuits nationwide. The U.S. Department of Justice has an ongoing antitrust case against RealPage, alleging its software facilitates a price-fixing scheme by allowing landlords to collude on pricing and suppress competition. This local action in Santa Ana is part of a larger trend, with cities like San Diego, Berkeley, San Francisco, and Minneapolis having already passed similar bans. The move also aligns with a new state law, AB 325, which expands antitrust regulations to prohibit companies from colluding to fix prices through algorithms. The Santa Ana City Council voted 6-0 to approve the ban, with Mayor Valerie Amezcua absent. Councilwoman Jessie Lopez, a proponent of the measure, stated the goal is to prevent the consolidation of the local housing market that contributes to repeated rent increases. In Santa Ana, over 55% of households are renters, and about 53% of them spend more than 30% of their income on housing. The median gross rent in the city is approximately $2,082. Councilman Ben Vazquez noted that the rent for a one-bedroom apartment in the city's center exceeds $2,000. The ordinance allows for enforcement by tenants, who can seek civil penalties of up to $1,000 for each violation. The ban specifically targets algorithms that use nonpublic competitor data to recommend rental rates, while software relying on publicly available data is still permitted. Opposition to such bans often comes from landlord associations. The Apartment Association of Orange County argued there is a misunderstanding of the software's purpose, claiming it helps with operational efficiency beyond just setting rents. Concerns about potential litigation were raised during the council's deliberations. Councilmember Phil Bacerra questioned the lack of information in a staff report about a lawsuit RealPage filed against the city of Berkeley over its ban. Berkeley ultimately settled the lawsuit and enacted a new ordinance.
