Portland City Council targets rent-pricing algorithms
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Photo illustration: Brendan Lynch/Axios; Photo: Emily Harris/Axios
A proposal to ban "anti-competitive rental practices" will go before the City Council on Wednesday, the first piece of policy legislation to do so since the city's new government structure was implemented.
Why it matters: The proposed policy is aimed at services like RealPage, a software company that the U.S. Department of Justice and several states have accused of conspiring with landlords to inflate rents.
- The federal and state governments' antitrust lawsuit alleges RealPage feeds its algorithm sensitive, nonpublic data from landlords, which competing landlords then use to maximize their profits at renters' expense.
What they're saying: Councilor Angelita Morillo, who sponsored the ordinance and told Axios before she was elected that this issue would be her top priority, said this is a chance for the city to set a standard.
- "Portland can set a national example in taking bold action to protect renters and ensure fair competition in the housing market," she said at a committee meeting on the measure.
- Violators of the ban could be charged up to $1,000, "with each day of violation and each affected housing unit constituting a separate violation," per the ordinance.
The other side: A number of housing industry groups — including the Portland Metro Chamber and the Portland Metropolitan Association of Realtors — oppose the ban, saying any new barriers to development in the city would only make building new housing more difficult.
- "We certainly cannot afford to adopt new landlord-tenant regulations that may make it even harder to attract needed investment in housing production," the groups wrote in a letter, per Willamette Week.
Catch up quick: Under Portland's new government structure, which took effect in January, policies must be heard in committees before advancing to a vote before the full, 12-member council.
How it works: The company's data — including private information from landlords on rent prices and lease expiration dates — is used to recommend to landlords the rents they should charge.
- It almost always suggests an increase, according to the DOJ's lawsuit.
- Not so, says RealPage. Often, the addition of private leasing information leads the algorithm to recommend lower rents, company spokesperson Jennifer Bowcock told Axios.
Context: The ban before City Council is similar to statewide proposals in Oregon and Washington and comes after the federal lawsuit, which Oregon has joined, accusing RealPage of pushing landlords to raise rents higher than they would have on their own.
- RealPage strongly disputes those characterizations, with Bowcock telling Axios that "inflation, high interest rates, and a housing supply shortage have driven up rent prices in America."
What we're watching: The ordinance will go before the full council Wednesday, with a final vote April 16.
- You can watch the meeting live here.