Item 24 - Councilmember Requested Item to Prepare an Ordinance Prohibiting the Use of Algorithmic Pricing Tools

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AMENDED IN COMMITTEE 7/29/2024 FILE NO. 240766 ORDINANCE NO. 224-24 1 [Administrative Code - Ban on Automated Rent-Setting] 2 3 Ordinance amending the Administrative Code to prohibit the sale or use of algorithmic 4 devices to set rents or manage occupancy levels for residential dwelling units located 5 in San Francisco. 6 NOTE: Unchanged Code text and uncodified text are in plain Arial font. Additions to Codes are in single-underline italics Times New Romano on . 7 Deletions to Codes are in ti i t i-em,h k. i s TJm, slew p m n f H* Board amendment additions are in double-underlined Arial font. 8 Board amendment deletions are in GtFikethmugh AFial font. 9 Asterisks (* *) indicate the omission of unchanged Code subsections or parts of tables. 10 11 Be it ordained by the People of the City and County of San Francisco: 12 13 Section 1. Background and Findings. 14 (a) In recent years, a number of new revenue management software programs, 15 often referred to as "algorithmic devices," have threatened to destabilize rental housing 16 markets in cities nationwide, including San Francisco. 17 (b) These programs enable landlords to indirectly coordinate with one another 18 through the sharing of non-public competitively sensitive data, in order to artificially inflate 19 rents and vacancy rates for rental housing. Participating landlords provide vast amounts of 20 proprietary data to the programs, which *R tUFR do not iust summarize statistical data, but also 21 perform calculations with the data to then set or provide recommendations for rent and 22 occupancy levels. 23 (c) More and more landlords in large U.S. cities now pool their data and pricing 24 decisions using such software. By some estimates, this includes owners of as much as 70% 25 of all rental housing in San Francisco. Supervisors Peskin; Chan, Preston, Melgar, Ronen, Dorsey BOARD OF SUPERVISORS Page 1