In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws.
Then they got sued by the company that was targeted, and immediately waffled and canceled the ban.
What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest possible rent, because they are (potentially) tethered to it for life (of the tenant).
So if you create an economic system where sellers never will allow prices to go down, why bother banning price fixing -- its practically baked into the housing code.
Under rent control the highest possible rent is set by laws. If you fall behind on the allowed rent increase you’re usually not allowed to catch up to market rate later, such as when your tenant leaves and you put the unit back on the market. So to avoid getting stuck at below market rate with no legal way to catch up, you have to take the maximum allowable rent increase every year. In some situations it’s better to leave a unit empty and wait for someone be willing to rent at the rate than it is to lower rent, because the consequences of lowering rent will stick with the unit for years.
Without rent control, rents can be kept constant, moved up, or moved down without having to consider the consequences for years to come. The ceiling is set by the market rate, but there isn’t a function driving all of the landlords to raise by the annually permissible maximum so they try to discover it instead.
Rent control is instituted in cities that have constrained housing supplies, so the demand is there. Landlords switch to raising rents in unison by the maximum allowable amount every year because that’s the only way to operate.
I live in NYC, which has rent control, and the idea that a landlord would otherwise lower rent is hilarious.
Landlords raise rent by the max allowed because they can. There is no “catch up” because the purpose is to protect renters against huge jumps.
I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent. You can own property to rent out, but in a city with a tremendous shortage of housing, you need to rent it out.
I lived in a building with affordable housing units and management decided they would rather not rent them out at all. Horrible.
> I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent
They would just be taken off the market and then relisted later.
Forcing people to rent their properties and also forcing the price isn’t something I can get behind. People need to be able to choose what they do with their property.
They would. But second order effects ensure that this very act leads to the decline of housing prices. These effects being eliminated by rent control makes it the premier anti-tenant policy.
What second-order effects...? Feels like such an oddly opqaue way to talk about them. And how do you ignore the effect of the fact that rent no longer rises during the life of the tenant, making it lower after a while than it would otherwise be...? (How) is it so obvious that that is dwarfed by the second-order effects of uncontrolled rent that it doesn't even warrant a mention? Because it isn't to me.
> And how do you ignore the effect of the fact that rent no longer rises during the life of the tenant,
Rent control schemes don’t work like this, except in completely broken policies.
Landlords are given an allowance for rent control increases year over year. The point is that they basically have to take the maximum allowed every year to avoid getting stuck.
If rent no longer rises then the profit doesn't rise commensurately with demand, so the money isn't there to build supply.
Rent control crushes supply to the degree that the rent control caps rents below the actual market rate.
If you're lucky enough to get rent controlled housing then you're in good shape. But good luck getting it when things get far enough down the timeline.
Rent fixing is the other side where supply is manipulated to extract the maximum profit. In this case the coordinated rent pricing action behaves like an oligopoly.
If rents can’t rise quickly, then the expected profit of a building goes down, which means prices for land go down, which means it is cheaper to build, which means it balances out.
If the balance is far enough off that everything turns into commercial real estate, that can be solved, too.
Prices are a signal, and price changes are how market participants can determine which way supply and demand curves are moving.
By legislating prices and price changes, the signal is muddied, and market participants cannot take action to match the movements of the supply and demand curves.
Prop 13’s property tax rate increase cap is also price fixing. These kinds of laws are mostly ways to enrich and reward those who got or were born somewhere first, and run counter to the vaunted meritocracy that a so called free market can encourage.
Edit: The most helpful thing the government can do is maximize price transparency, so the smaller entity can be on equal footing with the bigger entity about which way prices are moving. Tenant agreements should be public record, like land sales are, and that would not only help cops with kicking out squatters, but also give renters more power in negotiations.
These side effects of these dynamics are not going to be evident or resolved in the short term. It took decades for prop 13’s (and other effects) to compound and become visible, and it will take decades to undo.
There is no shortcut though, the incentives have to be set right, and there has to be patience for the results to show. Unfortunately, long term benefit at the expense of the short term is a core weakness in democracy.
Every rental unit in the city I live in is rent controlled — the government sets a maximum rental increase per unit per year. This is here in the People’s Republic of … checks notes … Dubai. It works great.
I’d imagine it’s not so simple, especially without a functional legislative branch, but we could really use a “digital bill of rights” that could provide a comprehensive set of baseline protections and standards for things like this, online privacy, data protection, whatever stops Meta/X/et al from being maximally harmful, etc..
> Our work against algorithmic rent-fixing is starting to bear real fruit. Multiple cities have passed laws prohibiting corporate landlords from using rent-fixing software, including San Francisco, San Diego, Seattle, Philadelphia, and Providence, RI. These laws aren’t complex and don’t require unwieldy market definition, you just have to show that the defendant is using nonpublic information in an algorithm to set prices. And they are being enforced, with six different lawsuits now pending.
A bunch of landlords all use the same software to tell them how to price rents. The software continually pushes prices higher and higher. The software requires landlords to use their pricing as a condition of use. Now you have a price-fixing cartel for rent.
Then they got sued by the company that was targeted, and immediately waffled and canceled the ban.
What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest possible rent, because they are (potentially) tethered to it for life (of the tenant).
So if you create an economic system where sellers never will allow prices to go down, why bother banning price fixing -- its practically baked into the housing code.
Without rent control, rents can be kept constant, moved up, or moved down without having to consider the consequences for years to come. The ceiling is set by the market rate, but there isn’t a function driving all of the landlords to raise by the annually permissible maximum so they try to discover it instead.
Rent control is instituted in cities that have constrained housing supplies, so the demand is there. Landlords switch to raising rents in unison by the maximum allowable amount every year because that’s the only way to operate.
Landlords raise rent by the max allowed because they can. There is no “catch up” because the purpose is to protect renters against huge jumps.
I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent. You can own property to rent out, but in a city with a tremendous shortage of housing, you need to rent it out.
I lived in a building with affordable housing units and management decided they would rather not rent them out at all. Horrible.
They would just be taken off the market and then relisted later.
Forcing people to rent their properties and also forcing the price isn’t something I can get behind. People need to be able to choose what they do with their property.
Rent control schemes don’t work like this, except in completely broken policies.
Landlords are given an allowance for rent control increases year over year. The point is that they basically have to take the maximum allowed every year to avoid getting stuck.
Rent control crushes supply to the degree that the rent control caps rents below the actual market rate.
If you're lucky enough to get rent controlled housing then you're in good shape. But good luck getting it when things get far enough down the timeline.
Rent fixing is the other side where supply is manipulated to extract the maximum profit. In this case the coordinated rent pricing action behaves like an oligopoly.
If the balance is far enough off that everything turns into commercial real estate, that can be solved, too.
By legislating prices and price changes, the signal is muddied, and market participants cannot take action to match the movements of the supply and demand curves.
Prop 13’s property tax rate increase cap is also price fixing. These kinds of laws are mostly ways to enrich and reward those who got or were born somewhere first, and run counter to the vaunted meritocracy that a so called free market can encourage.
Edit: The most helpful thing the government can do is maximize price transparency, so the smaller entity can be on equal footing with the bigger entity about which way prices are moving. Tenant agreements should be public record, like land sales are, and that would not only help cops with kicking out squatters, but also give renters more power in negotiations.
I agree that Prop 13 is god awful.
There is no shortcut though, the incentives have to be set right, and there has to be patience for the results to show. Unfortunately, long term benefit at the expense of the short term is a core weakness in democracy.
> Our work against algorithmic rent-fixing is starting to bear real fruit. Multiple cities have passed laws prohibiting corporate landlords from using rent-fixing software, including San Francisco, San Diego, Seattle, Philadelphia, and Providence, RI. These laws aren’t complex and don’t require unwieldy market definition, you just have to show that the defendant is using nonpublic information in an algorithm to set prices. And they are being enforced, with six different lawsuits now pending.