San Francisco has taken a bold step in addressing the city’s housing affordability crisis by banning the use of algorithmic pricing software for rental properties. The Board of Supervisors unanimously passed an ordinance targeting companies like RealPage and Yardi, which provide data-driven revenue management platforms to landlords. These software platforms collect data from various landlords across the city and suggest rental prices based on this information, which is not generally available to the public.
Critics argue that this practice enables landlords to collude on rent prices, artificially inflating them and exacerbating the already tight housing market in San Francisco. Board President Aaron Peskin, who introduced the legislation, stated, “Banning automated price-fixing will allow the market to work and bring down rents in San Francisco. We want to put more units on the market.
RealPage has exacerbated our rent crisis and empowered corporate landlords to keep units vacant intentionally.
San Francisco curbs rent algorithm software
So we’re taking action locally to ensure our working renters can afford to live here.”
The ordinance empowers tenants and the city to sue software providers and landlords who continue to use these algorithmic revenue management programs.
This measure aims to prevent the artificial inflation of rental prices and the strategic vacancy of units, which have become increasingly common practices in the city. RealPage, however, defended its software, claiming that it “benefits both housing providers and residents.” The company argued that housing affordability is primarily driven by increased demand, limited supply of rental units, and onerous permit and zoning requirements, rather than their software. San Francisco’s decision to ban these multifamily proptech algorithms could set a precedent for other cities facing similar housing affordability issues.
The move has sparked a broader conversation about the role of technology in property management and whether similar bans should be considered elsewhere. The final vote on the ordinance is scheduled for September 3. If passed, this legislation will represent a significant shift in how technology is allowed to influence the housing sector in San Francisco, prioritizing the accessibility and affordability of housing for the city’s residents.
