Algorithmic rent-pricing litigation expands under new state and local laws

ttoomuchtodo about 4 hours ago 31 commentsRead Article on morganlewis.com

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aorloff•about 3 hours ago

In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws.

Then they got sued by the company that was targeted, and immediately waffled and canceled the ban.

What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest possible rent, because they are (potentially) tethered to it for life (of the tenant).

So if you create an economic system where sellers never will allow prices to go down, why bother banning price fixing -- its practically baked into the housing code.

Chinjut•about 2 hours ago

Why would landlords not seek the highest possible rent without rent control?

Aurornis•about 1 hour ago

Under rent control the highest possible rent is set by laws. If you fall behind on the allowed rent increase you’re usually not allowed to catch up to market rate later, such as when your tenant leaves and you put the unit back on the market. So to avoid getting stuck at below market rate with no legal way to catch up, you have to take the maximum allowable rent increase every year. In some situations it’s better to leave a unit empty and wait for someone be willing to rent at the rate than it is to lower rent, because the consequences of lowering rent will stick with the unit for years.

Without rent control, rents can be kept constant, moved up, or moved down without having to consider the consequences for years to come. The ceiling is set by the market rate, but there isn’t a function driving all of the landlords to raise by the annually permissible maximum so they try to discover it instead.

Rent control is instituted in cities that have constrained housing supplies, so the demand is there. Landlords switch to raising rents in unison by the maximum allowable amount every year because that’s the only way to operate.

tyre•about 1 hour ago

I live in NYC, which has rent control, and the idea that a landlord would otherwise lower rent is hilarious.

Landlords raise rent by the max allowed because they can. There is no “catch up” because the purpose is to protect renters against huge jumps.

I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent. You can own property to rent out, but in a city with a tremendous shortage of housing, you need to rent it out.

I lived in a building with affordable housing units and management decided they would rather not rent them out at all. Horrible.

seanmcdirmid•23 minutes ago

Wi5 rent control, you are limited in how you can increase rent later, so it’s to your benefit to let the apartment sit vacant longer until you get a desirable rent. Without rent control, because you can just increase rent next year by whatever, you can rent it at the market rate right away without waiting.

sophrosyne42•about 2 hours ago

They would. But second order effects ensure that this very act leads to the decline of housing prices. These effects being eliminated by rent control makes it the premier anti-tenant policy.

dataflow•about 2 hours ago

What second-order effects...? Feels like such an oddly opqaue way to talk about them. And how do you ignore the effect of the fact that rent no longer rises during the life of the tenant, making it lower after a while than it would otherwise be...? (How) is it so obvious that that is dwarfed by the second-order effects of uncontrolled rent that it doesn't even warrant a mention? Because it isn't to me.

jeffbee•25 minutes ago

The market is 2-sided. They can "seek" whatever they want but they are going to get the clearing price.

s1artibartfast•37 minutes ago

You might prefer to have the vacancy filled faster rather than waiting for the highest possible price. These algorithmic pricing cases kind of revolve around this concept. It is the value that the service provided the companies.

Landlord input a desired vacancy rate or time on Market, and service suggests the right price.

jeffbee•27 minutes ago

Fun fact: in RealPage's brief about the Berkeley law they cited my work that shows rents in Berkeley declining. They never had the power to artificially set rents.

petesergeant•about 2 hours ago

Every rental unit in the city I live in is rent controlled — the government sets a maximum rental increase per unit per year. This is here in the People’s Republic of … checks notes … Dubai. It works great.

nativeit•about 2 hours ago

I’d imagine it’s not so simple, especially without a functional legislative branch, but we could really use a “digital bill of rights” that could provide a comprehensive set of baseline protections and standards for things like this, online privacy, data protection, whatever stops Meta/X/et al from being maximally harmful, etc..

ElProlactin•about 2 hours ago

Sadly, you can not legislate a culture of decency.

toomuchtodo•about 4 hours ago

From https://www.thebignewsletter.com/p/monopoly-round-up-time-ba...

> Our work against algorithmic rent-fixing is starting to bear real fruit. Multiple cities have passed laws prohibiting corporate landlords from using rent-fixing software, including San Francisco, San Diego, Seattle, Philadelphia, and Providence, RI. These laws aren’t complex and don’t require unwieldy market definition, you just have to show that the defendant is using nonpublic information in an algorithm to set prices. And they are being enforced, with six different lawsuits now pending.

boredatoms•about 3 hours ago

Will they just stop using an ‘algorithm’ and have a mathematician sit there and state numbers that are of unknown origin?

demibabs•about 3 hours ago

Can you elaborate on what is meant by “rent-fixing”?

CharlesW•about 3 hours ago

https://en.wikipedia.org/wiki/Price_fixing#:~:text=Rent%20al...

arrosenberg•about 2 hours ago

A bunch of landlords all use the same software to tell them how to price rents. The software continually pushes prices higher and higher. The software requires landlords to use their pricing as a condition of use. Now you have a price-fixing cartel for rent.

hiddencost•about 3 hours ago

Like "price fixing". Landlords illegally colluding to artificially inflate the price of housing.

hiddencost•about 3 hours ago

Do car dealerships next...