Santa Ana councilmembers are set to decide Tuesday night on a proposed ban on price fixing that would prevent landlords in the city from using certain algorithmic tools to set rental housing prices.
Councilmembers voted unanimously in support of the proposed ban at a meeting last month, but need to take a final vote to adopt the new law on Tuesday, March 3.
“The algorithm is creating an unfair advantage for landlords,” argued Santa Ana Executive Director for Community Development Michael Garcia, who presented an overview of the proposed law at the last council meeting.
The ordinance aims to protect Santa Ana tenants from inflated or unfair rent increases that officials say can be driven by pricing tools, ones that critics argue allow landlords to artificially inflate rental prices, often working in coordination to manipulate competitive market rates.
“For example, two-bedroom apartments in Santa Ana,” Garcia said. “Depending on where an apartment is located and how old the building might be, those rental rates should be very different.”
More than half of the city’s renters, about 55% of Santa Ana residents, spend more than 30% of their household income on rent. Officials say the city’s median income has not kept pace with rising rental prices, placing disparate pressure on low-income and working-class families.
The law would offer direct recourse for renters who can prove their rates were determined using such tools. Landlords who violate the ordinance would face civil penalties of up to $1,000 per violation, and tenants could seek injunctive relief and damages.
Garcia, who proposed the ordinance, said the law targets algorithms that rely on non-public data taken from competitors to recommend rental and occupancy levels for residential rental properties. The ordinance would not apply to pricing software that relies solely on publicly available data, such as aggregated historical information, or to tools used to comply with affordable housing program requirements.
Similar tenant protection laws have already passed in San Diego, Berkeley and Portland.