San Diego recently joined the trend and passed a ban on algorithmic rent-setting, which restricts the use of certain AI specific software tools.
Also known as the Anti-Competitive Automated Rent Price-Fixing Prohibition Ordinance, this ban prohibits landlords from using software that incorporates non-public competitor data to recommend rental rates for their properties.
Besides banning the use of this software, it also bans the sale of such software tools to landlords in the City of San Diego as well.
Why Did San Diego Take Action?
After years of non-stop rent increases, cities like San Diego and San Francisco believe that fighting back against services like RealPage will stop the alleged illegal price-fixing. A total of eight states have already passed similar bans on algorithmic pricing and more are expected to join a Federal antitrust lawsuit which is expected to curb this practice entirely.
Although software tools like RealPage only claim to “advise” landlords on pricing, rental markets like San Diego have believe they have had a negative impact on our rental market over the last 10 years since the average rent here is now $3,000 per month.
A Return To Competitive Pricing Dynamics?
Will renters see any type of rent relief in San Diego? There’s hope that banning algorithmic rent setting programs will bring tenants some relief and nudge landlords back to using competitive pricing dynamics to determine the best rent for their properties. An example of an acceptable practice would be to review current market rental properties of a similar nature found on public sites and use those comparable listings to determine an appropriate rental price for your Property.
Ultimately, San Diego’s high rents are also a supply and demand issue that can only be fixed by adding more rental properties to the San Diego area. Until the aspect changes the reality is that any relief from banning algorithmic rent setting tools is expected to be modest at best.
Contact GoldenWest Management
For more than 20 years, GoldenWest Management has been a leader in the San Diego rental market. We’ve saved countless owners the time, money, and hassle of managing their rental properties themselves.
If you’re ready to earn passive income from your rental properties, without the hassle, contact us today by calling (866) 545-5303 or click here to connect with us online.
