The Portland City Council on Wednesday appeared ready to ban corporate landlords from using algorithmic rent-fixing software, waging a battle playing out across the nation.

Councilors added an amendment specifying the proposed ban would not apply to owners of five or fewer units. The proposal will return before the council for a second reading later this month.

The potential ordinance would apply to “at least 32,000 units in Portland that have been using this algorithmic rent-fixing software,” said Councilor Angelita Morillo, who has championed the legislation.

“We have a responsibility to chip away at that market and make sure that we are doing what we can to make the rent more affordable in Portland,” Morillo said.

Critics charge that software from companies such as RealPage acts collusively to allow large-scale landlords to coordinate rents for thousands of units. The software can recommend rent increases, and prod landlords to bring their rents up if they’re below those charged by competitors. Use of the software has been challenged by lawsuits and local bans in some cities.

Portland’s proposed ordinance would ban “agreement among two or more persons or entities, to set, raise, lower, maintain or stabilize rental prices, fees or occupancy levels for dwelling units with different beneficial owners.”

The law would not apply to publicly subsidized affordable housing.

Rent software has been challenged across the nation. Greystar, the nation’s largest landlord, in August reached a settlement with the Justice Department that bans the company from using any algorithm that generates pricing recommendations using competitors’ data.

RealPage settled a consent judgment with Nevada in September. RealPage did not admit wrongdoing but agreed to pay $200,000 to housing nonprofit groups and to maintain an antitrust compliance program.

Joe Gardner, a lobbyist representing RealPage, said Wednesday that the company’s software had been subjected to a “mix of conspiracy theories and false allegations, none of which had held up in a courtroom.”

Morillo said she had worked with Sen. Ron Wyden’s office in devising Portland’s proposal.

“It’s not going to resolve the entire housing crisis that we have in Portland, but it will address part of the problems that we’re seeing here,” she said.

The proposed ordinance is focused on “competitive, sensitive information being shared through an algorithm,” Morillo said.

The Portland proposal is “carefully crafted to outlaw anticompetitive trade practices,” said Michael Abrams, policy counsel for the American Civil Liberties Union of Oregon.

The potential ordinance would create a private right of action for tenants to sue landlords for price fixing as well as allow the city attorney’s office to issue subpoenas and bring the matter to a code hearing.

Landlords and development groups objected to the proposal, saying it would add to housing providers’ regulatory burden in Portland.

“We cannot continually squeeze available supply with more regulations that make it riskier and more expensive to manage housing,” said Cassidy Bolger, director of development at Killian Pacific and an Oregon Smart Growth board member. “This is a disincentive to producers to provide more supply, and I urge you to reject it.”

Developer Brian Owendoff called the proposal “a solution in search of a problem.”

“Portland landlords are not price-fixing,” he said. “Developers and property owners have long used both public and private data through software and market analysis to understand demand and competitive rents.”

Councilors did not vote on the proposal on Wednesday, but most said they were supportive. Councilors Olivia Clark and Dan Ryan were among those critical of it.

“I believe we are sending the wrong message at a time when we need more housing,” Clark said. “We need more housing investment in the city. I also don’t want to risk incentivizing lawsuits against the city.”

Morillo sought to dispel concerns that the potential ordinance would ban Microsoft software commonly used by mom-and-pop landlords.

“I cannot emphasize enough how this policy does not ban Excel,” she said, drawing laughs in the council chambers. “It bans price-fixing coordination.”

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