COUNCILMEMBER O’ROURKE’S ALGORITHMIC RENTAL PRICE-FIXING BILL PASSES OUT OF HOUSING COMMITTEE IN UNANIMOUS VOTE

PHILADELPHIA - Minority Whip O'Rourke (At-Large) today joined a hearing of the Committee on Housing, Neighborhood Development, and the Homeless on Bill No. 240823, a bill that prohibits rental price-fixing in its algorithmic and personal forms. After an informative hearing, the bill was voted out of the committee in a 5-0 vote.

"I'm grateful for everyone who testified and shared their experiences today and to the committee for their thoughtful consideration of this important issue," said Councilmember O'Rourke, who introduced the bill during Council's September 26 Stated Meeting. "This bill is a crucial step towards protecting tenants and preventing unfair rental practices in our city - I can't wait to vote for its final passage."

The hearing featured national and local stakeholders in establishing tenant protections, one of Philly's tenant unions, local property owners, and other Philadelphians interested in preserving a competitive housing market.

Lori Peterson, a member of OnePA Renters United Philadelphia, testified about her recent experience in multifamily housing in Philadelphia, noting the concerns Philly tenants already face in an environment of historically high rental prices.

"I did everything I could: I put in work orders, spoke to my property manager [about long-term reported pest concerns], even asked to change apartments. I did not know what else I could do until I came to OnePA Renters United Philadelphia. Through our collective action, we won meetings with the Odin CEO and we won some repairs."

Narrowing the knowledge and power gap between landlords and tenants is another goal of Bill No. 240823. This gap widens when corporate landlords can pool private competitor information via algorithms. Organized tenants can better coordinate information and make timely demands of their landlords.

The committee "voted to advance a bill prohibiting rental price-fixing out of committee to protect tenants and mom-and-pop landlords who play by the rules," said Councilmember Jamie Gauthier (3rd District), Chair of the Committee on Housing, Neighborhood Development, and the Homeless. "City Council is committed to stopping price-fixing algorithms from milking every last penny out of working families who just want a place to live."

The function of targeted rent-setting software is clear: it keeps rental prices as high as local markets can accommodate, pushing up against the unit price ceiling in corporate multifamily housing - and even, in some cases, encouraging landlords to keep units vacant and hold out for higher rents.

As some of the largest revenue management firms are subject to a recently filed U.S. Department of Justice lawsuit, LiJia Gong, Policy and Legal Director at Local Progress reminded the committee of the value of moving quickly to preempt firms scaling up unfair market practices.

"Local governments, because of their ability to move nimbly in response to the needs of constituents are oftentimes the best poised to take on new illegal practices - or rather new technologies that facilitate long-standing illegal practices," said Gong.

Vice Chair Rue Landau (At-Large) put forward a motion to amend the legislation, to account for concerns about the scope of the bill, clarifying that only systems using private, sensitive data will be banned.

"We usually do a little research when we look for a new tenant," said Raymond Huxen, a local small landlord, speaking about the process he uses to set prices with publicly accessible data. "We may check Zillow just to get a broad range of rents in the area, then we pick something on the low end of the average. We don't want to try to squeeze every dollar from each of our tenants. It isn't necessary to us as landlords… to have a vast database with all the rental information in the country or even just our city."

Fittingly, this bill will not impact the use of municipally collected and otherwise public data often aggregated in publications by business associations and other realtor groups.

"Too many Big Tech firms are all about scaling up and then sometimes - if we're lucky - learning as they go along," said Councilmember O'Rourke. "Today's housing crisis is too serious to dance that same old dance. City Council must be proactive in responding to rapidly increasing rents and the growing concerns of tenants."

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