Housing rental terms: algorithmic devices.

Plain English Breakdown

The official source material does not provide information about the effective date of the bill.

Rules on Rental Pricing Algorithms

This law makes it illegal for people or companies to sell or use certain computer programs that set rental prices if they know these programs will be used by multiple landlords in the same area.

What This Bill Does

• Makes it against the rules to sell, license, or provide a program called a 'rental pricing algorithm' to two or more people if you intend or reasonably expect them to use it to set rental terms for residential properties.
• Forbids using such an algorithm to recommend rental terms if you know or should have known that two or more landlords in the same market will follow these recommendations.
• Prohibits setting rental terms based on a recommendation from an algorithm that uses nonpublic competitor data, especially when another person has used this data to set rent prices nearby.
• Allows the Attorney General and local city attorneys or county counsels to sue for violations of these rules.
• Permits anyone harmed by breaking these rules to file their own lawsuit.

Who It Names or Affects

• Landlords who use rental pricing algorithms to set rent terms.
• Companies that sell, license, or provide rental pricing algorithms.
• Tenants affected by unfair rental prices set using such algorithms.

Terms To Know

Rental Pricing Algorithm

A computer program used to suggest or set rent prices for apartments or other residential properties.

Nonpublic Competitor Data

Private information about competitors that is not publicly available, such as their pricing strategies or financial data.

Limits and Unknowns

• The bill does not specify what happens if someone accidentally uses a rental pricing algorithm without knowing it's against the rules.
• It is unclear how this law will be enforced in practice and whether it will effectively prevent unfair rent increases.
• There are no details on penalties for breaking these new laws.

Official Summary Text

SB 52, as amended, Pérez.
Housing rental terms: algorithmic devices.
Existing law governs the hiring of residential dwelling units and requires a landlord to provide specified notice to tenants prior to an increase in rent. Existing law, the Costa-Hawkins Rental Housing Act, prescribes statewide limits on the application of local rent control with regard to certain properties. That act, among other things, authorizes an owner of residential real property to establish the initial and all subsequent rental rates for a dwelling or unit that meets specified criteria, subject to certain limitations.
This bill would make it unlawful for any person to sell, license, or otherwise provide to 2 or more persons a rental pricing algorithm, as defined, with the intent
or reasonable expectation
that it be used by 2 or
more persons, as specified, to set rental terms, as defined, for residential premises.
The bill would make it unlawful for any person
to use a rental pricing algorithm to recommend rental terms for residential premises if the person knew or should have known that the rental pricing algorithm would be used to set rental terms by 2 or more landlords in the same or related market used or if the person coerces any other person to use the rental pricing algorithm to set rental terms for residential premises in the same market or a related market.
The bill would
also
make it unlawful for a person to set or adopt rental terms based on the recommendation of a rental pricing algorithm if the person knows or should know that the rental pricing algorithm processes nonpublic competitor data, as defined, to set rental terms and that the pricing algorithm or the recommendation of the algorithm was used by another person to set or recommend a rental term for residential premises in the same
market or a related
market.
Existing law establishes the Attorney General as the head of the Department of Justice, with charge of all legal matters in which the state is interested, except as specified. Existing law imposes various requirements on the Attorney General related to consumer protection, including, among others, the supervision of charitable trusts and the enforcement of antitrust laws.
This bill would authorize the Attorney General, and the city attorney or county counsel in the jurisdiction in which the rental unit is located, to file a civil action for a violation of the bill, as specified, and would authorize a person who is harmed by a violation of the bill to file a civil action, as specified.

Current Bill Text

Download Bill PDF