HomeMy WebLinkAboutItem 19 - Second Reading and Adoption of an Ordinance Prohibiting Anti-Competitive Automated Rent Price-Fixing Community Development Agency
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Item # 19
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
March 3, 2026
TOPIC: Second Reading and Adopt an Ordinance Prohibiting Anti-Competitive
Automated Rent Price-Fixing
AGENDA TITLE
Second Reading and Adoption of an Ordinance Prohibiting Anti-Competitive Automated
Rent Price-Fixing
First reading February 17, 2026 City Council meeting and approved by a vote of (6-0-1)
(Mayor Amezcua absent). Published in the OC Reporter on February 18, 2026.
RECOMMENDED ACTION
Conduct a second reading of and adopt an ordinance of the City Council approving
Ordinance No. NS-3090 to add Article XXIV to Chapter 8 (Buildings and Structures) of
the Santa Ana Municipal Code prohibiting anti-competitive automated rent price fixing
software.
ORDINANCE NO. NS-3090 entitled AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA ANA PROHIBITING ANTI-COMPETITIVE AUTOMATED RENT
PRICE FIXING
GOVERNMENT CODE §84308 APPLIES: No
DISCUSSION
At the February 17, 2026 regular meeting, the City Council approved the first reading of
an ordinance, Ordinance No. NS-3090, adding Sections 8-3700 to 8-3703 of Article
XXIV, of Chapter 8 (Buildings and Structures) of the Santa Ana Municipal Code (SAMC)
prohibiting anti-competitive automated rent price fixing software. The ordinance,
approved by a vote of 6:0, requires a second reading.
No changes to the ordinance were made by City Council. A copy of the ordinance for
second reading and adoption is attached to this report as Exhibit 1.
FISCAL IMPACT
There is no fiscal impact associated with this item.
Second Reading - Ordinance Prohibiting Anti-Competitive Automated Rent Price-Fixing
March 3, 2026
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EXHIBIT(S)
1. Ordinance for Second Reading
Submitted By: Michael L. Garcia, Executive Director, Community Development Agency
Approved By: Alvaro Nuñez, City Manager
Ordinance No. NS-XXXX
Page 1 of 7
ORDINANCE NO. NS-XXXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA PROHIBITING ANTI-COMPETITIVE
AUTOMATED RENT PRICE-FIXING
THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS
FOLLOWS:
Section 1. The City Council of Santa Ana hereby finds, determines, and declares
as follows:
A.The housing rent burden and poverty faced by many residents in the City of
Santa Ana (City) threatens the health, safety, and welfare to the City.
B.The City Council has provided relief to residents by enacting a Rent
Stabilization and Just Cause Eviction Ordinance, directing City staff to apply
for housing grants to lower the cost of living for residents and placing a priority
on assisting residents by providing information about issues that can negatively
affect their lives.
C.The high cost of living and housing shortage in the City have contributed to the
City’s unaffordability. According to an October 2025 Zillow report, a family must
earn $220,000 a year to afford a home mortgage in Santa Ana. According to
an October 22, 2025 Orange County Register article, the average rental rate
for a residential dwelling unit in the City is $2,293, approximately 40.6% higher
than the national median of $1,631.
D.According to the U.S. Census Bureau’s 2023 American Community Survey
(ACS), Santa Ana has approximately 79,691 occupied housing units, of which
44,151 are renter-occupied households, accounting for over 5 5% of the total
occupied housing units in Santa Ana. Approximately 5 3% of renter households
are considered cost-burdened, with housing expenses exceeding 30% of
household income. The City’s median household income has not kept pace
with the growth in rental housing costs, placing disproportionate pressure on
low-income and working-class families.
E.Landlords’ use of algorithmic devices, which perform calculations of nonpublic
competitor data concerning rental rates, occupancy levels, and other
information, to set rental rates and occupancy levels has resulted in inflated
rental rates an unfair rent increases and contributed to the City’s unaffordability
for families.
F.A 2024 study by the White House reported that renters nationally spent an extra
$3.8 billion in rent in 2023 because of pricing algorithms, and that Los Angeles
renters in units managed with algorithms paid an average of $408 more than
EXHIBIT 1
Ordinance No. NS-XXXX
Page 2 of 7
renters in units that were not managed with algorithms. The average monthly
cost for Santa Ana is unavailable.
G.In response to the use of algorithmic devices to set rental rates and occupancy
levels, in August 2024, the United States Department of Justice (DOJ) filed a
lawsuit against RealPage, Inc. Eight Attorneys General, including California
Attorney General Rob Bonta, joined the DOJ’s lawsuit. The DOJ amended its
lawsuit in January 2025 to add two Attorneys General and name landlords and
defendants. This lawsuit was settled in November 2025 and per the DOJ,
“the proposed settlement would help restore free market competition in
rental markets for millions of American renters.” Per the settlement, RealPage
did not admit any wrongdoing or liability, RealPage must not use their
competitors’ non-public information, and an independent monitor will ensure
compliance for seven (7) years. City renters cannot hope that RealPage does
not violate the settlement nor that RealPage will be caught by the independent
monitor.
H.RealPage filed a federal lawsuit against the City of Berkeley in April 2025
challenging their ordinance that bans landlords from using algorithmic revenue
management software for setting rental rates. While the litigation is pending,
and as RealPage will be monitored City renters cannot wait for this lawsuit to
run its course. The Council wishes to provide immediate relief to City renters
by prohibiting the sale, licensing, and use of algorithmic devices that use or
incorporate nonpublic competitor data to advise a landlord on, or recommend
to a landlord, rental rates or occupancy levels that may be achieved for
residential real property in the City.
Section 2. The recitals and statements of fact set forth in the preamble to this
ordinance are true and correct, constitute a substantive part of the ordinance, and are
incorporated herein by reference.
Section 3. Article XXIII (Prohibition of Anti-Competitive Automated Rent Price-
Fixing) is added to Chapter 8 (Buildings and Structures) of the Santa Ana Municipal Code
to read as follows:
Section 8-3600 – Purpose and Intent
The purpose and intent of this Article is to protect the residents of Santa Ana from
artificially inflated rental rates and unfair rent increases by prohibiting the sale, licensing,
and use of Algorithmic Devices. This Article also provides Tenants with remedies for
violations of this Article.
Section 8-3601 – Definitions
(a)For purposes of this Article, the words and phrases shall be defined as set forth
herein, unless the context clearly indicates a different meaning is intended.
EXHIBIT 1
Ordinance No. NS-XXXX
Page 3 of 7
(b) Words and phrases used in this Article, which are not specifically defined, shall
be construed according to their context and the customary usage of the language.
(c) Words and phrases defined:
“Algorithmic Device” means a software or product that uses or incorporates one or
more algorithms to perform calculations of Nonpublic Competitor Data concerning
rental rates, occupancy levels, or other information regarding the leasing of
Residential Rental Property to advise a Landlord on, or recommend to a Landlord,
rental rates or occupancy levels that may be achieved for a Residential Rental
Property in the City of Santa Ana. Algorithmic Device does not include either of
the following:
1)A software or product used by a Person to publish reports regarding rental rates
or occupancy levels from aggregated historical Nonpublic Competitor Data that
is more than 90 days old, or from information available to the general public,
and does not recommend rental rates or occupancy levels for future Residential
Rental Property Leases or renewals.
2)A software or product used by a Person to establish rental rates or income
limits in accordance with local, state, or federal affordable housing program
guidelines.
“Landlord” means an owner and any Person, acting as principal or through an
agent, who has the right to offer Residential Real Property for rent, and includes a
predecessor in interest to the Landlord.
“Lease” means any lease, sublease, or agreement, written or oral, for the use and
occupancy of Residential Rental Property.
“Nonpublic Competitor Data” means information that is not available to the general
public, whether the information is attributable to a specific competitor or
anonymized or whether the information is derived from or otherwise provided by
another Person. Nonpublic Competitor Data includes information about actual
rental rates, rental rate changes, Residential Rental Property supply levels,
occupancy levels, or Lease start and end dates.
“Person” means any natural person, firm, joint venture, joint stock company,
partnership, association, club, company, corporation, business trust, organization,
or the manager, lessee, agent, servant, officer or employee of any of them or any
other entity which is recognized by law as the subject of rights or duties.
“Residential Rental Property” means any dwelling or unit that is intended for human
habitation, including any dwelling or unit in a mobilehome park.
EXHIBIT 1
Ordinance No. NS-XXXX
Page 4 of 7
“Tenant” means a tenant, subtenant, lessee, sublessee, or any o ther natural
person entitled to Lease any Residential Real Property.
Section 8-3602 – Use and Sale of Algorithmic Devices Prohibited
(a) It is unlawful for a person to sell, license, or otherwise provide an Algorithmic
Device to a Landlord.
(b) It is unlawful for a Landlord to use an Algorithmic Device to set rental rates or
occupancy levels for Residential Real Property. For each month a violation of Section 8-
3602(b) exists or continues, and for each Residential Rental Property a Landlord uses an
Algorithmic Device, it shall constitute a separate and distinct violation.
Section 8-3603 – Remedies
(a) A Tenant may seek injunctive relief, damages, or civil penalties of up to $1,000
per violation of this Article, in a civil action against a Landlord. In an action brought under
this Article, a prevailing Tenant shall recover costs and reasonable attorney’s fees. A
prevailing Tenant includes a Tenant granted an order for injunctive relief. A Lease
provision that limits a Tenant from recovering attorney’s fees shall not be enforceable
against a Tenant’s claim for attorney’s fees that arise under this Article.
(b) The remedies under Section 8-3603 are cumulative and are in addition to any
other remedies in this Article or at law, statute, or ordinance.
Section 4. The City Council finds and determines that this Ordinance is not subject
to the California Environmental Quality Act (CEQA) pursuant to sections 15060(c)(2) and
15060(c)(3) of the State CEQA Guidelines because it will not result in a direct or
reasonably foreseeable indirect physical change to the environment, as there is no
possibility it will have a significant effect on the environment and it is not a “project” as
defined in section 15378 of the State CEQA Guidelines. Furthermore, the propos ed
Ordinance falls within the “common sense” CEQA exemption set forth in CEQA
Guidelines section 15061(b)(3), excluding projects where “it can be seen with certainty
that there is no possibility that the activity in question may have a significant effect on the
environment.”
Section 5. If any section, subsection, sentence, clause, phrase or portion of this
ordinance is for any reason held to be invalid or unconstitutional by the decision of any
court of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this ordinance. The City Council of the City of Santa Ana hereby declares that
it would have adopted this ordinance and each section, subsection, sentence, clause,
phrase or portion thereof irrespective of the fact that any one or more sections,
subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
EXHIBIT 1
Ordinance No. NS-XXXX
Page 5 of 7
Section 6. This ordinance shall become effective thirty (30) days after its adoption.
Section 7. The City Clerk shall certify the adoption of this ordinance and shall cause
the same to be published as required by law.
EXHIBIT 1
Ordinance No. NS-XXXX
Page 6 of 7
ADOPTED this day of March, 2026.
Valerie Amezcua
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By:
Andrea Garcia-Miller
Senior Assistant City Attorney
AYES: Councilmembers ________________________________
NOES: Councilmembers ________________________
ABSTAIN: Councilmembers __________
NOT PRESENT: Councilmembers ______
EXHIBIT 1
Ordinance No. NS-XXXX
Page 7 of 7
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, JENNIFER L. HALL, City Clerk, do hereby attest to and certify that the attached
Ordinance No. NS-XXXX to be the original ordinance adopted by the City Council of
the City of Santa Ana on March 3, 2026 and that said ordinance was published in
accordance with the Charter of the City of Santa Ana.
Date: ______________________ ________________________________
Jennifer L. Hall
City Clerk
City of Santa Ana
EXHIBIT 1