San Francisco supervisors approve ban targeting RealPage software for setting rents

The San Francisco Board of Supervisors on Tuesday have approved a first-in-the-nation ordinance banning landlords from using certain software and algorithms to set rents.

In a unanimous decision, the board approved the legislation introduced by supervisor and mayoral hopeful Aaron Peskin .

According to Peskin's office, the measure bans both the sale and use of software "which combines non-public competitor data to set, recommend or advise on rents and occupancy levels." The measure also allows the City Attorney or tenants who have been affected by the software to file lawsuits.

Calling the practice "automated price-fixing", Peskin said the ban would "allow the market to work and bring down rents in San Francisco."

Peskin said companies such as RealPage and Yardi, which collect rental data from landlords to make pricing recommendations, are enabling collusion among large landlords and gouging tenants.

"We want to put more units on the market. Let's be clear: RealPage has exacerbated our rent crisis and empowered corporate landlords to intentionally keep units vacant. So we're taking action locally to ensure our working renters can afford to live here," he went on to say.

Critics told CBS News Bay Area earlier this month that the RealPage software enables collusion that is destroying competition between property owners.

"What they're doing, their entire business model is illegal," attorney Lee Hepner of the American Economic Liberties Project told reporter John Ramos. "They are manipulating the market to fix prices and hike rents and remove really healthy competition from markets that should be responding to that competitive pressure and actually bring rents down."

The software has been the target of multiple lawsuits and investigations, according to Peskin's office.

In a statement to CBS News Bay Area on July 17 , RealPage said media reports and legal filings are "false and misleading" and that their software "contributes to a healthier and more efficient rental housing ecosystem."