The Boston City Council pushed not to be like San Francisco in housing policy

A local think tank is calling on the Boston City Council to avoid replicating San Francisco's housing policies. The recommendation came after councilors approved a hearing order on algorithmic pricing of rental properties.

San Francisco became the first city in the country to ban algorithmic software used to set multifamily rents and manage summer occupancy. Boston city councilors say they are interested in investigating “predatory” practices here.

The so-called “algorithmic devices” allegedly reduce competition and contribute to rent increases because they “allow landlords to use non-public competitive data to set or recommend rental prices and occupancy levels,” according to the hearing order the City Council issued Wednesday has approved.

In September, digital marketplace Zumper listed the median rent for all bedroom counts and properties in Boston at $3,200, a figure 66% higher than the national average.

“While there are many factors contributing to the crisis, we must scrutinize any practice that could artificially inflate rents and exacerbate the problem,” said Council Member Sharon Durkan, lead sponsor of the hearing order.

An “appropriate (council) committee” will hear from tenants and housing experts to evaluate the use and impact of algorithmic pricing tools and “explore the potential for adopting an ordinance in Boston that prohibits the use of non-public information.” algorithmic Pricing,” the order states.

Gregory Maynard, executive director of the Boston Policy Institute, called the hearing order a “red herring” and said the city and state are dealing with a housing supply problem, not a “landlord collusion problem.”

Maynard, in a statement, took issue with Durkan bringing up how San Francisco passed an ordinance banning algorithmic price fixing. He highlighted how California passed a law this summer forcing the restive city to build more housing.

“With a record like that, San Francisco is the last place city councils should look for housing policy advice,” Maynard said.

“If the City Council is serious about addressing housing costs in Boston,” he added, “it will stop chasing red herrings like algorithmic pricing and corporate ownership and focus on making it easier to build homes.” make.”

The Boston Policy Institute, working with Tufts University's Center for State Policy Analysis, found earlier this year that the city's shrinking business tax base could lead to a budget deficit of more than $1 billion in five years.

Real estate software company RealPage is at the center of an antitrust lawsuit filed by the Justice Department in August. The company is accused of an illegal scheme that allowed landlords to coordinate to increase rental prices.

The lawsuit, filed with eight state attorneys general, alleges that the company violates antitrust laws through its algorithm that landlords use to obtain recommended rental prices for millions of apartments across the country.

In a statement, RealPage said the Justice Department's claims were “baseless and do nothing to make housing more affordable.”

U.S. Senators Ed Markey and Elizabeth Warren and Rep. Seth Moulton, D-Massachusetts, sent a letter in September to 13 of Massachusetts' largest homeowners questioning their use of the software.

Councilor Liz Breadon said her districts of Allston and Brighton could be “disproportionately affected” by the practices because about 80% of residents are renters.

“That’s not how the market is supposed to work,” she said. “This is predatory rent manipulation, and it is unethical and unfair in a real estate market that is one of the most expensive in the country.”

The Associated Press contributed to this report