The Berkeley City Council enacted an ordinance prohibiting the sale or use of algorithmic rent-pricing software, arguing it leads to collusion and higher housing costs. The Texas-based company RealPage, targeted by the ban, has filed a lawsuit claiming the ordinance violates First Amendment rights. RealPage asserts that cities are incorrectly blaming the software for price-fixing and is seeking a restraining order to prevent the ordinance's implementation. The ordinance emerges amidst wider scrutiny of algorithm usage affecting rental prices in several U.S. cities, aiming to protect tenants from rising rents.
The ordinance, passed by Berkeley City Council, prohibits the use of algorithms that aid landlords in coordinating rent prices, claiming it leads to illegal price-fixing.
RealPage argues the ordinance encroaches on lawful speech and challenges its constitutionality, labeling the ban a facade based on misinformation from city officials.
The lawsuit filed by RealPage seeks a temporary restraining order against the ordinance set to go into effect on April 24, unless halted by the court.
According to the Housing Advisory Commission, the algorithms allow landlords to manipulate the market, ultimately raising housing costs and influencing vacancy management.
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