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Algorithmic rent-pricing litigation expands under new state and local laws

morganlewis.com

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Re: Algorithmic rent-pricing litigation expands under new state and local laws

#31

Post by JumpCrisscross »

tyre wrote: post #23
Aurornis wrote: post #19

Earlier quoted context omitted.

Under rent control the highest possible rent is set by laws. If you fall behind on the allowed rent increase you’re usually not allowed to catch up to market rate later, such as when your tenant leaves and you put the unit back on the market. So to avoid getting stuck at below market rate with no legal way to catch up, you have to take the maximum allowable rent increase every year. In some situations it’s better to…

I live in NYC, which has rent control, and the idea that a landlord would otherwise lower rent is hilarious. Landlords raise rent by the max allowed because they can. There is no “catch up” because the purpose is to protect renters against huge jumps. I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent. You can own property to rent out, but in a…

New York’s rent control works differently from the Bay Area’s. It’s absolutely worth it to just raise the rent on a Bay Area unit if it’s rent controlled even if that means it runs empty. That isn’t usually the case in New York.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#32

Post by gfdhjd3 »

petesergeant wrote: post #14
aorloff wrote: post #7

In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws. Then they got sued by the company that was targeted, and immediately waffled and canceled the ban. What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest…

Every rental unit in the city I live in is rent controlled — the government sets a maximum rental increase per unit per year. This is here in the People’s Republic of … checks notes … Dubai. It works great.

The Dubai rent control system has some important differences compared to Berkeley. Dubai’s rent change is indexed to the rental market but Berkeley’s isn’t. Berkeley’s max change in a year is like 1% while Dubai’s could be as high as 20% in some cases.

Also, in Dubai if the owner wants to sell and not renew the lease they can. In Berkeley it’s not nearly so simple.

I would not want to be a landlord in Berkeley.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#33

Post by jeffbee »

aorloff wrote: post #7

In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws. Then they got sued by the company that was targeted, and immediately waffled and canceled the ban. What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest…

Fun fact: in RealPage's brief about the Berkeley law they cited my work that shows rents in Berkeley declining. They never had the power to artificially set rents.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#34

Post by jeffbee »

Chinjut wrote: post #9
aorloff wrote: post #7

In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws. Then they got sued by the company that was targeted, and immediately waffled and canceled the ban. What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest…

Why would landlords not seek the highest possible rent without rent control?

The market is 2-sided. They can "seek" whatever they want but they are going to get the clearing price.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#35

Post by seanmcdirmid »

Chinjut wrote: post #9
aorloff wrote: post #7

In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws. Then they got sued by the company that was targeted, and immediately waffled and canceled the ban. What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest…

Why would landlords not seek the highest possible rent without rent control?

With rent control, you are limited in how you can increase rent later, so it’s to your benefit to let the apartment sit vacant longer until you get a desirable rent. Without rent control, because you can just increase rent next year by whatever, you can rent it at the market rate right away without waiting.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#36

Post by seanmcdirmid »

rcpt wrote: post #30
lotsofpulp wrote: post #27

Earlier quoted context omitted.

These side effects of these dynamics are not going to be evident or resolved in the short term. It took decades for prop 13’s (and other effects) to compound and become visible, and it will take decades to undo. There is no shortcut though, the incentives have to be set right, and there has to be patience for the results to show. Unfortunately, long term benefit at the expense of the short term is a core weakness in…

I don't think that's true. Prop 13 for example is priced into the market. Buyers bid higher because their taxes are frozen. This doesn't take decades to correct. Market reactions are instant. Once the policy is fixed we don't have to wait for a generation

Buyers bid higher because sellers are giving up their low property tax, not because the buyer will have a low property tax in a decade or two. Sellers are hesitant to sell because they are giving up a lot, California had to pass a special law just to let old people downsize without losing their low property tax on the big home they raised a family in.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#37

Post by washadjeffmad »

demibabs wrote: post #3
toomuchtodo wrote: post #2

From https://www.thebignewsletter.com/p/monopoly-round-up-time-ba... > Our work against algorithmic rent-fixing is starting to bear real fruit. Multiple cities have passed laws prohibiting corporate landlords from using rent-fixing software, including San Francisco, San Diego, Seattle, Philadelphia, and Providence, RI. These laws aren’t complex and don’t require unwieldy market definition, you just have to show that…

Can you elaborate on what is meant by “rent-fixing”?

https://www.legis.ga.gov/api/legislation/document/20252026/2...

See Section 3

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#38

Post by hdgvhicv »

tyre wrote: post #23
Aurornis wrote: post #19

Earlier quoted context omitted.

Under rent control the highest possible rent is set by laws. If you fall behind on the allowed rent increase you’re usually not allowed to catch up to market rate later, such as when your tenant leaves and you put the unit back on the market. So to avoid getting stuck at below market rate with no legal way to catch up, you have to take the maximum allowable rent increase every year. In some situations it’s better to…

I live in NYC, which has rent control, and the idea that a landlord would otherwise lower rent is hilarious. Landlords raise rent by the max allowed because they can. There is no “catch up” because the purpose is to protect renters against huge jumps. I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent. You can own property to rent out, but in a…

Just charge a tax on the value of the land.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#39

Post by smitty1e »

seanmcdirmid wrote: post #35
Chinjut wrote: post #9

Earlier quoted context omitted.

Why would landlords not seek the highest possible rent without rent control?

With rent control, you are limited in how you can increase rent later, so it’s to your benefit to let the apartment sit vacant longer until you get a desirable rent. Without rent control, because you can just increase rent next year by whatever, you can rent it at the market rate right away without waiting.

TL;DR => Sowell, "Basic Economics".

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#40

Post by yonran »

In San Francisco, I’m not a fan of Aaron Peskin’s ban on algorithmic rent-setting (Admin Code 37.10C https://codelibrary.amlegal.com/codes/san_francisco/latest/s...) (which is probably similar to the other cities) because 1) it goes beyond antitrust law in just banning data gathering for no good reason, and 2) it rewards bounty hunters.

1. It goes beyond antitrust guidelines by banning rent prediction using any “non-public competitor data”, which is stricter than the former antitrust guidelines which prohibited sharing “competitively sensitive variables” (https://www.ftc.gov/sites/default/files/attachments/dealings...). To the extent that it differs from banning competitively sensitive data, it is just banning the use of data to make rentals more efficient. If landlords are pricing accurately but not monopolistically, this should reduce turnover, reduce vacancy, and reduce the occasions where a listing gets a crowd of applicants, which is good for both landlord and tenant. It’s bad to try to ban accurate data.

2. It provides a private right of action for tenants and nonprofits to sue, just like Proposition 65 (Known by the State of California to cause cancer) incentivizes bounty hunters to sue. The point seems to be to punish landlords more than it is to establish fair rules.

And it seems that these lawsuits are just piggybacking on the DOJ settlement by punishing anyone who uses RealPage as soon as the ordinance becomes effective in 30 days while RealPage was already working to settle federally. The complaints (e.g. the SF one https://www.courtlistener.com/docket/73573242/gomez-v-greyst...) don’t have any new violations; just companies who are already settling. I don’t think that’s justice for a city to frontrun the federal settlement with new violations for the same program.

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