Berkeley City Council approves ban on AI tools to set rents
The Berkeley City Council recently voted to ban rent pricing technology that uses artificial intelligence, saying the tools are being used to unfairly manipulate the rental market and drive prices up.
The new ordinance was approved at the council's March 11 meeting and prevents landlords from using so-called "rent-pricing algorithms" that are allegedly used in price-fixing schemes.
"Technology itself is neutral—people are not," City Councilmember Ben Bartlett said in a news release Monday. "Algorithms can uplift or oppress, depending entirely on whose hands they're in and whose interests they're designed to serve. Our role is clear: We must ensure AI empowers communities, and not exploits them."
Bartlett said companies that target renters "through dynamic pricing systems that prioritize profits over people" will face $1,000 fines for each violation.
He specifically called out San Francisco-based tech company RealPage for developing one of the now-forbidden tools.
A RealPage spokesperson didn't immediately respond to a request for comment.
Berkeley's decision follows moves by cities around the country, including San Francisco, San Diego, San Jose and Philadelphia, that have passed or are considering similar bans.
Also, in January, the U.S. Department of Justice expanded a suit against RealPage aimed at curbing the use of such technology by adding six large corporate landlords to the case.
The companies deny the allegations and in a series of statements on a website dedicated to the issue, RealPage officials say the real problem involves a complex web of inflationary pressures, high demand for rental housing in many places around the country and a chronic lack of rental housing supply, among other things.
"Starting in October 2022, false and misleading claims about RealPage and its revenue management software have been reported in the media and in legal filings," according to a statement on the website. "This has perpetuated an inaccurate and distorted narrative about RealPage, our revenue management solutions, and the many benefits we bring for residents and housing providers, including a healthier and more efficient rental housing ecosystem."
