Portland proposal to ban rental price-fixing software hits stumbling block

PORTLAND, Ore. (KOIN) — The Portland City Council measure that would ban rental price-fixing software has hit a stumbling block.

After hearing a third round of testimony on the proposal on Wednesday night, city leaders unanimously approved District 3 Councilor Angelita Morillo's motion to refer the ordinance back to the Homelessness and Housing Committee.

“It's kind of with a heavy heart that I have to say this — that there is some new litigation elsewhere that touches on similar issues with the algorithmic price fixing ordinance,” Morillo, the proposal’s lead sponsor, said. “And I want to assert that the litigation is not determinative of what's going to happen here, but it's worth us keeping an eye on and being responsible stewards of policy and maintaining good conversations with stakeholders as we look into it.”

The councilor was referring to a real estate software company’s ongoing legal battle with the City of Berkeley. In early April, the Associated Press reported that RealPage filed a federal lawsuit accusing the California city of violating its free speech with an ordinance that prohibits rent-pricing algorithms.

The lawsuit against Berkeley is the most recent development in a nationwide attempt to crack down on an alleged price-fixing scheme.

In August, Oregon and several other states joined the Department of Justice in filing a federal complaint that claimed RealPage uses its software to collude with property managers and hike up the cost of rent. The plaintiffs amended the complaint to include some of the country’s “largest landlords” in January.

Portland’s Homelessness and Housing Committee began discussing an ordinance against these practices the following month. The committee later referred the discussion to the full council, but Morillo’s recent decision to reverse this move comes as the city is “facing other immediate priorities, like the upcoming budget.”

The councilor previously noted that 47% of Portlanders are renters. And while much of the testimony on the ordinance has come from those in support of it, RealPage Vice President of Associate General Counsel Mike Semko argued that banning the software would impact renters negatively.

“What this draft ordinance does at the present moment — It doesn't ban price fixing,” Semko said on Wednesday. “It bans the use of data sets in applied math. Essentially, what you're doing is — you're banning a math tool. That’s not going to help anybody. It certainly won't help housing providers and, by the way, it won't help your residents either.”