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CITY OF SANTAANA <br /> Council member-Requested Item Report <br /> DATE <br /> October 7, 2025 <br /> TOPIC <br /> Algorithmic Price Fixing <br /> COUNCILMEMBER-REQUESTED ITEM TITLE <br /> Discuss and Consider Providing Direction to the City Manager and City Attorney to <br /> direct staff to prepare an ordinance prohibiting the use of algorithmic pricing tools <br /> DISCUSSION <br /> The increasing use of algorithmic pricing software by landlords has raised concerns <br /> about its impact on rental affordability and market competition. Third-party services like <br /> RealPage offer rent-setting recommendations based on proprietary and publicly <br /> available data, effectively allowing landlords to coordinate pricing strategies. This <br /> practice has been linked to significant rent increases, reduced housing affordability, and <br /> increased tenant displacement. <br /> How Algorithmic Price Fixing Works <br /> Landlords share private rental data with third-party software providers like RealPage, <br /> which use algorithms to estimate supply and demand, then recommend rental pricing <br /> strategies. These recommendations maximize revenue not just for individual landlords <br /> but for all landlords using the software in a given market. This adversely affects housing <br /> for the following reasons: <br /> • Drives up rents by enabling collusion-like behavior without direct communication <br /> among landlords. <br /> • Contributes to double-digit rent increases in some metropolitan areas. <br /> • Increases tenant displacement—some RealPage clients reported a 15% rise in <br /> turnover rates after adopting the software's recommendations. <br /> • Reduces renter mobility and affordability, limiting access to housing. <br /> Legal and Policy Considerations <br /> The use of algorithmic rent-setting has faced legal challenges and regulatory scrutiny: <br /> • Ongoing Litigation: <br /> o The District of Columbia Attorney General sued RealPage and major <br /> landlords in 2023. <br /> o The Arizona Attorney General filed a similar lawsuit in 2024. <br /> o More than 20 federal antitrust lawsuits have been consolidated in <br /> Tennessee, with the Department of Justice supporting plaintiffs. <br /> CITY ATTORNEY CITY MANAGER CITY CLERK <br /> Sonia R.Carvalho Alvaro Nunez Jennifer L. Hall <br /> 20 CIVIC CENTER PLAZA-P.O. BOX 1988, M31 -SANTA ANA, CALIFORNIA 92702 <br /> TELEPHONE(714)647-6900-FAX(714)647-6954-www.santa-ana.org <br />