San Francisco's Board of Supervisors has approved the ban on software that allegedly guides landlords to create schemes on rental prices.
The ordinance was voted 10-0 on a first ready by the board and will undergo a final vote on September 3.
San Francisco Seeks Banning of Rental Price-Colluding Software
The ban will affect software companies RealPage and Yardi. The board alleged that these companies have contributed to worsening the rent crisis and have empowered corporate landlords to intentionally vacant units.
"These recommendations then effectively become the lay of the land, with multiple investigations finding they amount to illegal price-fixing," board president Aaron Peskin stated.
Peskin also revealed that RealPage's executives told its investors that the software helped drive double-digit increases in rents, and boosted turnover units and vacancy rates.
San Francisco Fights for Local Renters' Rights to Afford Houses
Earlier this year, the Department of Justice declared that inflated rents caused by "algorithmic use of sensitive nonpublic pricing and supply information violate antitrust laws." The Federal Trade Commission also argued that using software to hike up prices is illegal.
Both RealPage and Yardi are accused of collecting and combining large landlord data. The software is designed to make pricing and occupancy recommendations which eventually caused inflated results.
RealPage previously denied the allegations and called it "false and misleading." The software company clarified that its service is beneficial to both house providers and renters.
The proposal states that if an entity uses such a device on residential units within San Francisco or if a San Franciso landlord utilizes a similar software, civil action will be taken. Payment for damages and civil penalties of up to $1,000 per violation is also in place.
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