Updated: November 20: Portland City Council voted Wednesday night to adopt Councilor Angelita Morillo's proposed AI rental price-fixing ban, with eight councilors in support. In addition to co-sponsors Green, and Koyama Lane, the ordinance was approved by Councilors Dunphy, Avalos, Kanal, Loretta Smith, and Council President Elana Pirtle-Guiney. Clark and Ryan voted no, and Councilors Steve Novick and Eric Zimmerman were absent.
Original story:
After months of uncertainty, a policy to ban the sale or use of algorithmic rental price-fixing software in Portland is back on the table. The proposed ordinance, brought to Portland City Council by Councilor Angelita Morillo in February was tabled after the Council discussed it in April. Now, a slightly-tweaked version appears on track to pass.
Wednesday’s City Council vote takes place on the same day the state of Oregon announced a proposed $7 million legal settlement with the nation’s largest landlord over illegal rental price fixing.
The policy, which is co-sponsored by Councilors Mitch Green and Tiffany Koyama Lane, is intended to address a tool that allows large building owners to share private data through software that collectively sets rent prices. Antitrust experts and tenant advocates say the property management software companies—and the landlords that contract with them—are skirting federal price-fixing law by using the algorithmic tool. They say the software enables landlords to essentially collude with one another to keep rents artificially high.
The rental software policy mirrors language in a recent multi-state lawsuit against Greystar Management Services for the property management company’s use of the price-fixing tools. Oregon and eight other states filed litigation targeting the company’s use of software like RealPage, which Oregon’s attorney general says allows landlords to “coordinate rent increases rather than competing independently.”
The US Department of Justice has also gone after the practice. An August 2024 DOJ complaint against RealPage argued the tool violated longstanding antitrust law, including the Sherman Act and the Federal Trade Commission Act of 1914. The state of Oregon is involved in that lawsuit, too.
“RealPage replaces competition with coordination,” the DOJ wrote in its complaint against the company. “It substitutes unity for rivalry. It subverts competition and the competitive process. It does so openly and directly—and American renters are left paying the price.”
The proposed city ordinance has been supported by renter advocates, who say the policy is a part of addressing high rents in Portland, helping the city address rising homelessness and housing insecurity. But the proposal has also faced significant opposition from the moment it was introduced, including from local real estate developers.
Portland abandoned earlier efforts to pass the ordinance after RealPage—the preeminent software company that facilitates the price-setting tools for landlords—sued the city of Berkeley, California for passing a similar ordinance. Ultimately, Berkeley postponed its ban on algorithmic rent-setting software, with city leaders concerned about the cost of litigation.
“I actually had the votes to pass it that day, but I was concerned about [other] litigation involving 1st Amendment rights,” Morillo told the Mercury in October, referring to her decision to pull it from the Council docket to allow for revision after the California lawsuit. “I’m not gonna put our city in the position of having a multi-million dollar lawsuit.”
The Council discussed the proposed ban again at a meeting on November 12, having amended it to alleviate some of the primary concerns raised during earlier discussions, and to protect the city from potential legal challenges. In particular, the proposed ordinance now includes language intended to reduce its potential impacts on landlords with small rental portfolios. With the changes, the policy seems more palatable to the Council, though a few holdouts remain.
At the November 12 meeting, Councilors Olivia Clark and Dan Ryan made their disdain for the policy known. Their comments about the ordinance focused on its potential dampening effect on local housing development, as well as their concerns about the policy bringing legal risks to the city. At the same time, the opponents on City Council said they think the price-fixing ban is a “solution in search of a problem,” as Ryan put it. Their concerns were reminiscent of opposing testimony provided by real estate developers and algorithmic software company lobbyists.
Portland is far from the only US city to pursue legislation banning AI-driven price-fixing practices. While Berkeley may have put its ban on hold, cities including Seattle, San Francisco, Philadelphia, San Diego, and Minneapolis have all recently adopted similar policies.
At the November 12 meeting, Councilor Morillo pushed back on her colleagues' criticism, saying even if the ordinance isn’t a “silver bullet,” it’s worth a shot, particularly in combination with other measures to increase housing supply and lower rents.
“I can actually walk and chew gum at the same time. I can focus on renter’s rights and making sure that rent is affordable, and focus on building housing,” Morillo said. “Whenever we’re ready to take serious action, I'm ready to do that.”
“A misplaced priority”?Portland’s algorithmic price-fixing ban would amend City Code to prohibit landlords and property management companies from engaging in price-fixing, which the policy defines as “agreement among two or more persons or entities, or the use of software or systems, to set, raise, lower, maintain, or stabilize rental prices, fees, or occupancy levels of dwelling units with different beneficial owners.”
If a person or company violates the policy, impacted parties would have the right to seek relief of up to $1,000 per violation. Each month that a landlord charges rent using price-fixing software would constitute a violation. For tenants, that means they’d have to file a lawsuit. The ordinance also gives the city leeway to file code enforcement violations against landlords.
The purpose and background statement for the ordinance says the proposal “affirms what has been true for over 100 years: price fixing and coordination are illegal practices that undermine free market competition.”
“This is true whether an individual or entity is colluding with competitors in person in a ‘smoky back room’ or through algorithm-driven price fixing services,” the statement reads. “Price fixing and coordination facilitated by AI and algorithms are particularly pernicious for both renters and landlords seeking access to a fair, competitive marketplace.”
When the policy’s sponsors brought it to the Council earlier this year, they heard some concern that the ban would impact small landlords who own only a handful of properties and rely on rental income for their livelihoods. This concern also suggested the ordinance would prohibit landlords from using any computer analysis tools, including innocuous software like Excel spreadsheets.
Advocates for the ban say companies like RealPage have leveraged these arguments in bad faith, but agreed to amend the proposal to make it clear it wouldn’t apply to small landlords, or those who have somehow used the software unknowingly.
With those concerns addressed, opponents primarily argued the ban was unnecessary and would hinder housing production in Portland during a time when more housing is desperately needed.
RealPage lobbyist Joe Gardner told the Council he believed the proposed ordinance is “based on a mix of conspiracy theories and false allegations.”
“When cities spend their time chasing conspiracy theories and encouraging nuisance lawsuits, they'll get worse results than cities focused on just building more housing,” Gardner said. “I urge you to consider whether this is an appropriate time for this policy at all, when our crisis of houselessness is so acute and our economy is so fragile, is this really the time to be adding one more disincentive for people to build and rent houses in Portland? I believe the answer is no.”
This argument appeared to resonate with Councilors Clark and Ryan. At last week's meeting, Clark said while she’s “distressed about rising rents,” she doesn’t see this policy as urgent. Clark also said she believed the ban would “send the wrong message” at a time when the city should be collaborating with the private sector to build more housing.
“I believe that this is a misplaced priority. I would rather continue to focus on streamlining our permitting and removing barriers to housing development,” Clark said. “We need to do everything we can to [encourage] the development of housing in this community.”
Ryan expressed similar concerns, going as far to say that he doesn’t think “a single housing builder would be more inclined to invest in Portland if this becomes law.”
Councilors supportive of the policy were dubious of the idea that the regulation would be a significant deterrent for developers looking to build housing in Portland. Councilor Jamie Dunphy also criticized the notion that the Council should “look past our own values…in order to get a crane in the sky.”
“If a reasonable protection against collusion for large actors disincentivizes those types of developers from bringing housing to Portland, I actually think that's a win,” Dunphy said. “Development for development's sake is not ever going to be a goal that I will support. I am eager to break the myth that development at all costs should be the goal of this body.”
Several local pro-housing groups, including Portland: Neighbors Welcome, have been supportive of the policy.
Renters represented on CouncilThe councilors who championed the AI price-fixing ordinance see the policy as an important step toward making Portland more equitable for the many residents who rent their homes. That effort is all the more necessary, they say, because city leadership has long neglected the renters who make up about half of all city residents.
Tenant advocates have praised the policy for being a step toward making Portland a more renter-friendly city.
"Anti-competitive practices make a housing market already failing to serve Portlanders even worse,” Portland Tenants United wrote in a letter to Council that was shared with the public for others to use in their testimony. “These services allow landlords to skirt antitrust policies to create de facto cartels to drive up rent."
Councilor Sameer Kanal, who is one of three renters on the current City Council (along with Morillo and Councilor Steve Novick), said he thinks the Council is often divided by “status quo versus change.”
“In order to be pro-Portlander, you have to be pro-renter. Making it more affordable to live here includes having housing that’s more in line with incomes,” Councilor Kanal said. “The entire purpose of RealPage is not to house more people. It’s to help corporate landlords increase profits as much as possible. I do view part of our role as protecting Portlanders from predatory practices, and this ordinance does that.”
Kanal’s comments prompted a response from Ryan, who seemed to think the councilors promoting the rights of renters were pitting them against homeowners.
“I’ve owned a home since 2000, and my property taxes and insurance have escalated tremendously. All the elders on my block beg me to stop the increases in property taxes because they can’t age in place any longer,” Ryan said. “So I think this body needs to also be sensitive to the burdens that are happening to many of us who have invested in Portland as property owners and are increasingly struggling, our affordability is also at attack.”
It’s unclear how the price-fixing ordinance would increase costs for homeowners.
Ryan has also repeatedly cited his concerns about the policy’s supposed affiliation with the Democratic Socialists of America (DSA). The councilors who co-sponsored the ordinance are members of DSA, but similar policies have been championed by people who are not affiliated with any socialist organization. Senator Ron Wyden led an effort to bring legislation banning AI-driven rental price-fixing.
The Council will have a final reading and vote on the ordinance Wednesday evening.
