SF’s Aaron Peskin proposes ban on rent-calculating software

Aaron Peskin’s bid to claim the progressive mantle in San Francisco’s mayoral primary has him pairing up critiques of landlords and artificial intelligence at a time when the city is counting on both as building blocks of its revival.

The incumbent supervisor and mayoral hopeful has introduced an ordinance to ban the sale and use of algorithmic software programs for use by landlords for setting rents, the San Francisco Standard reported. 

Such programs, driven by AI, have drawn fire in various cases around the U.S., with Richardson, Texas-based RealPage provoking particular claims that its software allows collusion among property owners that amounts to price fixing in the residential rental market.

Up to 70 percent of San Francisco’s rental housing stock is priced with guidance from such software, according to Peskin, whose research pointed to RealPage as a chief culprit.

“Banning automated price-fixing will allow the market to work and bring down rents in San Francisco,” Peskin said in a statement. “Let’s be clear: RealPage has exacerbated our rent crisis and empowered corporate landlords to intentionally keep units vacant.”

Supervisor Connie Chan has signed on as co-sponsor of the ordinance in the 11-member San Francisco Board of Supervisors. Passage in the body would send the ordinance to Mayor London Breed, who Peskin is challenging, who could veto the legislation or sign it into law.

The ordinance, as offered by Peskin, would empower the City Attorney or tenants to file a civil action with penalties of up to $1,000 per violation for the use of such software programs.

Software intended to establish rent or income limits for the city’s affordable housing program or products that use trade association reports of anonymous renter data would be exempt from the ban.

RealPage and other software publishers often market their products as “revenue management solutions” for landlords. Programs typically collect data from renters or apartments seekers and  feed the numbers into algorithms to figure prices. RealPage bills its product as being able to help landlords boost revenue by as much as 5 percent over local market averages.

RealPage did not immediately respond to a request for comment from the Standard, but a statement from the company in June denied that its software is a tool for collusion among landlords.

Several of San Francisco’s biggest apartment owners did not respond to a request for comment.

A spokesperson for Ballast Investments — which recently joined with Brookfield to buy $1 billion worth of distressed multifamily mortgages in the Bay Area — told the Standard the company “does not use the software that Peskin’s ordinance will ban.”