- San Diego passed an ordinance banning algorithm-based rent-setting tools, including those offered by RealPage, over concerns they enable landlord collusion and inflate rents.
- The city joins San Francisco, Minneapolis, and Berkeley in targeting revenue management software accused of using private rental data to avoid price competition.
- The ordinance allows tenants to seek up to $1,000 in damages if their landlord is found using algorithmic pricing software.
- RealPage, which is already facing a federal antitrust lawsuit, argues its software simply provides market analysis and doesn’t set rents.
The Latest City to Act
According to GlobeSt, San Diego’s City Council voted 8-1 to ban the use of rent-setting algorithms. This move places the city among others—like San Francisco and Minneapolis—that have taken similar action. Although the ordinance doesn’t mention RealPage by name, city documents reference the company several times.
The Backdrop
In 2023, the US Department of Justice filed a federal antitrust lawsuit against RealPage. The agency claims the Texas-based firm created a system that lets landlords share private rental data. This data then helps determine pricing recommendations, which may reduce competition and drive up rents.
RealPage’s YieldStar software pulls lease data from more than 14M units. It uses AI to generate rent suggestions. Critics argue that this process leverages private data in ways that disrupt a competitive housing market.
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What the Ordinance Says
San Diego’s new law prohibits rent-setting algorithms that rely on nonpublic data from competitors. If a tenant discovers their landlord uses such a tool, they can sue for up to $1,000 in damages.
Councilmember Sean Elo-Rivera, who introduced the ban, said he collaborated with the city attorney to craft a precise ordinance. Unlike Berkeley’s broader law, San Diego’s version clearly defines private versus public housing data.
Industry Pushback
RealPage pushed back during the council meeting. The company insists its software only analyzes market data and offers optional pricing advice. It also claims that clients accept the tool’s suggestions less than 40% of the time.
Company attorney Michael Semko called the ordinance vague and overly broad. He argued that building more housing—not banning software—is the real way to reduce rents.
The Legal Landscape
RealPage now faces challenges at both the federal and city levels. The DOJ’s lawsuit, backed by 10 states, accuses the company of using a network of landlords to share confidential data. This data allegedly trains an algorithm to manipulate market prices and eliminate competition.
RealPage asked a federal court in North Carolina to dismiss the lawsuit. The company argued that the DOJ has failed to prove the software causes anticompetitive effects.
Meanwhile, RealPage also sued Berkeley in a separate case. The company claims Berkeley’s ban violates free speech and unfairly targets its software.
Why it Matters
Rents remain high in many US cities, and officials continue to scrutinize AI tools that influence pricing. San Diego’s ordinance adds momentum to a broader movement targeting software blamed for increasing housing costs.
As more cities explore similar laws, the debate over data, algorithms, and housing affordability is likely to intensify. Expect legal and regulatory battles to continue.
