Landlords in Santa Ana will no longer be allowed to use algorithms that comb through confidential real estate data to set rent prices amid concerns the practice is anticompetitive and inflating housing costs.<\/p>\n
Santa Ana, where more than half of residents are renters, is the latest town to ban automated rent fixing following other cities like Portland, San Diego and Berkely as federal and state officials look to crack down on the use of such algorithms amid a host of lawsuits.<\/p>\n
On Tuesday, city council members voted 6-0-1 on the proposed ban despite concern from one elected official that the new law could lead to costly lawsuits. Mayor Valerie Amezcua was absent from the meeting.<\/p>\n
City Councilwoman Jessie Lopez, who is running for State Assembly, said the ban will protect all renters in the city.<\/p>\n
\u201cThe 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,\u201d she said at the meeting.<\/p>\n
Chip Ahlswede, a vice president for the Apartment Association of OC, said there is a lack of understanding of what these softwares do and they help address the needs of landlords beyond just rent rates.<\/p>\n
\u201cIt\u2019s more to address the costs associated with being a property manager,\u201d he said in a Wednesday phone interview. \u201cIt\u2019s intended to create more efficiency. However, it\u2019s become a lovely talking point by people that think that this is intended to raise rents.\u201d<\/p>\n
Councilman Ben Vazquez said the rent for a one bedroom apartment in the center of the city is over $2,000 currently.<\/p>\n
\u201cThis is very much necessary of how rent has gone up extremely in the city of Santa Ana and the heart of Santa Ana, where our families can\u2019t afford and they\u2019re moving into those one bedrooms as that is all they can afford,\u201d he said.<\/p>\n
The median gross rent in Santa Ana is $2,082 and roughly 11% of residents live under the poverty line, according to U.S. Census data<\/a>.<\/p>\n The ban comes amid pressure from state officials on local leaders to increase their affordable housing stock and years after Santa Ana leaders implemented a rent control ordinance to stop rents increasing by more than 3% each year.<\/p>\n It also comes as new state law \u2013 AB 325 \u2013 went into effect this year expanding the state\u2019s antitrust law by prohibiting the use of such software in anticompetitive agreements and creating liability for companies that collude to fix price through algorithms.<\/p>\n Ahlswede said the new state law already addresses the issue and Santa Ana\u2019s rent hike cap prevents such software from having any real impact.<\/p>\n \u201cBanning a software that doesn\u2019t even address what they think it addresses and you\u2019ve already got caps on what the rents may be \u2013 It seems a strange endeavor,\u201d he said.<\/p>\n Challenging Algorithmic Rent Fixing\u00a0<\/p>\n