Santa Ana has joined a growing pushback across the nation by advancing a ban on landlords using software platforms to coordinate rental rates.
The City Council unanimously approved the first reading of the ban at Tuesday’s regular meeting. The law aims to address concerns that algorithmic devices allow landlords to collude on “unfair rent-setting practices,” including artificial rent hikes.
“An algorithm has been created with different companies — RealPage is one of them. What the algorithm is doing is creating an unfair advantage for landlords,” Mike Garcia, head of Santa Ana’s community development agency, told the council members. “What the ordinance would do is prohibit the use and the sale of [such] algorithms to landlords within the city.”
In 2024, the U.S. Dept. of Justice alleged in an antitrust lawsuit that RealPage, a Texas-based third-party software platform, engaged in an unlawful scheme to undercut competition by landlords in apartment pricing, a move that the agency said harmed millions of renters.
Berkeley followed by passing a ban last year on landlords using similar software platforms, but paused it from going into effect when RealPage claimed in its lawsuit that the law violated free speech rights.
Councilmember Jessie Lopez pushed for a local ban in October, in following the policy footsteps of cities like Berkeley, San Diego and Portland, as a council majority directed city staff to watch developments in Berkeley and come back with a proposed law.
Santa Ana City Atty. Sonia Carvalho told the council Tuesday that Berkeley settled out of court in mid-January and adopted a ban in full afterward.
The DOJ and RealPage also agreed to settle, with the federal government seeking to end the company’s practices of sharing confidential information that allows landlords to align prices and avoid competition.
Councilmember Phil Bacerra, who supported the ban, asked stern questions about a city staff report that claimed that renters in Santa Ana could not afford to wait for Berkeley’s litigation to play out.
“Our city renters, our city homeowners, our city businesses, are better served when the city is not facing frivolous lawsuits,” he said.
Citing Bacerra’s questions about litigation before the council meeting, Carvalho noted that her office called Berkeley city officials on Tuesday to confirm the settlement there and called Santa Ana’s proposed law “legally sound.”
Lopez thanked city manager and city attorney staffers for their hard work on the proposed law.
“This is good policy,” she said. “This will protect all the renters of our city. It does not matter if you’re in a market rate unit or not. The purpose here is to prohibit the consolidation of our local housing market, which is again, just contributing to the bigger issue of people who are getting rent increases year after year, because, perhaps, their data is being used against them.”
Lopez added that legal threats are often a part of the process of advancing policies like the ban.
Under the proposed law, tenants may seek up injunctive relief, damages and civil penalties of up to $1,000 per violation, with every artificially inflated monthly rental payment being considered an infraction. The ban is also designed to align with existing and proposed state laws on third-party software platforms like RealPage.
The City Council voted 6-0 to move forward on the law, with Mayor Valerie Amezcua absent from the meeting. A second procedural vote on the ban will come at a future council date before the law takes effect.