Landlords in Santa Ana will no longer be allowed to use algorithms that comb through confidential real estate data to set rent prices amid concerns the practice is anticompetitive and inflating housing costs.
Santa Ana, where more than half of residents are renters, is the latest town to ban automated rent fixing following other cities like Portland, San Diego and Berkely as federal and state officials look to crack down on the use of such algorithms amid a host of lawsuits.
On Tuesday, city council members voted 6-0-1 on the proposed ban despite concern from one elected official that the new law could lead to costly lawsuits. Mayor Valerie Amezcua was absent from the meeting.
City Councilwoman Jessie Lopez, who is running for State Assembly, said the ban will protect all renters in the city.
“The purpose here is to prohibit the consolidation of our local housing market, which is again just contributing to the bigger issue of people who are getting rent increases year after year, because perhaps their data is being used against them,” she said at the meeting.
Chip Ahlswede, a vice president for the Apartment Association of OC, said there is a lack of understanding of what these softwares do and they help address the needs of landlords beyond just rent rates.
“It’s more to address the costs associated with being a property manager,” he said in a Wednesday phone interview. “It’s intended to create more efficiency. However, it’s become a lovely talking point by people that think that this is intended to raise rents.”
Councilman Ben Vazquez said the rent for a one bedroom apartment in the center of the city is over $2,000 currently.
“This is very much necessary of how rent has gone up extremely in the city of Santa Ana and the heart of Santa Ana, where our families can’t afford and they’re moving into those one bedrooms as that is all they can afford,” he said.
The median gross rent in Santa Ana is $2,082 and roughly 11% of residents live under the poverty line, according to U.S. Census data.
The ban comes amid pressure from state officials on local leaders to increase their affordable housing stock and years after Santa Ana leaders implemented a rent control ordinance to stop rents increasing by more than 3% each year.
It also comes as new state law – AB 325 – went into effect this year expanding the state’s antitrust law by prohibiting the use of such software in anticompetitive agreements and creating liability for companies that collude to fix price through algorithms.
Ahlswede said the new state law already addresses the issue and Santa Ana’s rent hike cap prevents such software from having any real impact.
“Banning a software that doesn’t even address what they think it addresses and you’ve already got caps on what the rents may be – It seems a strange endeavor,” he said.
Challenging Algorithmic Rent Fixing
In 2024, the U.S. Department of Justice along with attorneys general from eight states filed an antitrust lawsuit against real estate software company RealPage alleging they contract with competing landlords to share confidential rental data to power its pricing algorithm.
The lawsuit was settled last fall banning RealPage from using real time nonpublic data to make pricing recommendations.
Amid that lawsuit, RealPage filed a different lawsuit in 2025 against the City of Berkeley after officials there banned automated rent price fixing, arguing officials were violating RealPage’s First Amendment rights to give advice and recommendations.
Santa Ana officials said the lawsuit against Berkeley was settled in January after officials there paused their ban and leaders there have also enacted a new ordinance against algorithmic rent fixing.
Santa Ana Councilman Phil Bacerra raised concerns City Attorney Sonia Carvalho did not provide information about the Berkeley lawsuit in the staff report and only mentioned it once in the ordinance.
“Everything you’re telling us verbally tonight,” he said “Should have been in the staff report. I don’t think that’s an unfair thing to ask of the city attorney to warn the council of potential litigation.”
Carvalho said she had warned the council about the litigation previously.
“I was very adamant at the first meeting and disclosing to you what I thought were considerable risks and notwithstanding those risks, I was given direction by a majority of the council, and I have to perform at the majority vote,” she said.
Bacerra ultimately supported the ban.
Councilwoman Thai Viet Phan said it’s a ban worth fighting for if it goes to court.
“With the use of technology, AI and algorithmic price setting, it’s impacting so many aspects of our lives today, and when it comes to housing, that is the most fundamental need each of us have,” she said.
Berkeley and the Department of Justice aren’t the only ones trying to crack down on algorithmic rent fixing.
A proposed Senate Bill – dubbed SB 384 – would ban the sale or use of a price setting algorithm when it’s expected to be used by two or more competitors in the same market and relies on nonpublic data to determine rent rates.
Santa Ana’s ordinance would ban the sale or use of such algorithms to recommend rental rates for residential properties but landlords could use software that relies on public data.
Enforcement of the ordinance would rely on the tenants.
If there is a violation, a renter could seek up to a $1,000 in civil penalties for each violation.
Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.
