The San Diego City Council's Rules Committee voted 4- 1 Wednesday for a proposed ordinance that would prohibit the use of real estate pricing software that has allegedly led to skyrocketing rents.
The committee will ask the City Attorney's Office to draft an ordinance to ban the practice, which it referred to as algorithmic price- fixing.
Committee officials cited recent anti-trust lawsuits filed by state and federal prosecutors that claim the use of such software inflates rental prices and decreases competition among landlords who rely on the software to set their rents.
One such lawsuit filed by the U.S. Department of Justice and a coalition of attorney general offices — including California's — accuses the real estate company RealPage of enabling landlords who use its software to avoid competitive practices that would benefit renters.
The committee said banning the use of such software is especially needed in San Diego, where rent is around 65% higher than the national average.
"San Diego is too expensive for too many people. From college students to working families to seniors, more and more San Diegans are struggling to see a future in our city," City Council President Sean Elo-Rivera said in a statement. "When corporations use AI software to manipulate rents, they're putting profits over people and turning homes into commodities. We are taking a stand to stop this artificial inflation and protect our neighbors from price gouging. San Diego can no longer allow big corporations to push families out of their homes and communities."
