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Antitrust cases have been aimed at a real estate software company called RealPage, claiming that through its YieldStar product, landlords are working together to share rental pricing data and occupancy rates to raise rents.

These algorithmic devices raised concerns in a 2022 ProPublica investigation and have paved the way for a Department of Justice probe and lawsuits by tenants and prosecutors nationwide arguing that the technology amounts to collusion. San Francisco took notice.

Although RealPage has been besieged with legal dustups, never before has a city sought an outright ban on this controversial software. That was changed when Supervisor Aaron Peskin introduced an ordinance prohibiting its use.

The board unanimously approved the ordinance on its first reading. In a formality, the measure will be read again for final approval of the board on September 3, whereupon it will head to Mayor Breed's desk. If she signs it, the ban will go into effect 30 days later.

What RealPage says
The Texas-based company has stated that landlords ultimately decide rent prices. Despite claims to the contrary, it denies that it ever recommends vacancies.

RealPage spokesperson Jennifer Bowcock told SFGATE that the fixation on nonpublic data use is a "distraction that will only make San Francisco's historical problems worse," and encouraged lawmakers to identify real solutions to ease the affordable housing crisis by building more.

Our takes
Supervisor Peskin has professed that he doesn't know the extent of RealPage's impact on San Francisco, only musing that with the city's population declining, rents should be lower.

In fact, rents have been anemic. As SocketSite reported, asking rents are lower than at the same time last year and 21% below their 2015-era peak. Any concern that rents are going north is misplaced.

And what, exactly, does the oft-stated term "price-gouging" mean anyway?
It's impossible for someone selling something to command more money than what a buyer is willing to pay. If you own a $1.5 million home, can you sell it for $10 million? You can list it for whatever you'd like, but won't find a buyer for it. The owner of a 1997 Ford Escort can advertise his/her vehicle for $50,000, but will anybody purchase it?

While tenants' advocates see a ban on algorithms as a win that will make the market fairer and more competitive, we trust the free market. For our part, we have cautioned housing providers to resist the temptation to raise rents too high. Better to find an excellent tenant that pays a lower rent on time, than to lose rental income and let a vacant unit languish because it is overpriced.

So, we may take exception with the scoop from RealPage that rents are ultimately set by the landlord. At the end of the day, tenants are the arbiter of rent levels.