A vote is scheduled for Monday.
Seattle approved a similar ban in July, joining other major cities like San Francisco, Philadelphia and Minneapolis amid mounting concerns and lawsuits alleging that artificial intelligence algorithms are used by groups of landlords to raise rents without fear of being undercut by their competitors.
It would be illegal for the same landlords to sit together in a room, share their prices and agree to all raise their rents by $100; critics argue that those laws are being circumvented by companies like Texas-based RealPage, allowing landlords to collude with a degree of separation.
Software like RealPage's doesn't directly tell Property Manager A what Property Manager B is charging, but instead provides aggregated, anonymous data from all of the nearby clients. That collective data can be used to suggest the highest possible rents that the market can bear, sometimes with much larger increases than property managers would otherwise think to charge.
"As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually," said Andrew Bowen, a RealPage executive, at a 2021 conference. He credited the RealPage software with driving major rental increases.
In some cases, these soaring rents reportedly drive lower occupancy rates — leaving more apartments empty and effectively worsening existing housing shortages — while increasing profits overall for landlords.
"These tools don't simply analyze the market," said Terri Anderson, director of the Spokane office of the Tenants Union of Washington State. "They can effectively shape it by synchronizing rent increases across competing properties ... the result is not competition, but coordination."
In April, Washington state Attorney General Nick Brown filed suit against RealPage and nine landlords, alleging the software was being used to "push rental prices beyond what landlords could otherwise achieve while reducing the risk that other landlords will undercut them with more competitive rates."
The use of this kind of software can be widespread in a given market. In a 2022 report, ProPublica found more than 70% of apartments in Seattle's Belltown neighborhood were overseen by 10 property managers, all of which were using RealPage's pricing software.
It's not immediately clear how widespread the software's use is in Spokane, however, nor is it obvious how a renter would learn whether their landlord was making use of it, Councilman Zack Zappone acknowledged Friday. Jeffrey Roper, who was hired by RealPage in 2004 to improve its software, told ProPublica in 2022 that this type of software was more common in more expensive markets such as Seattle.
The U.S. Department of Justice under the Biden administration launched an antitrust lawsuit last year against RealPage, arguing that "in a free market, these landlords would otherwise be competing independently to attract renters based on pricing, discounts, concessions, lease terms, and other dimensions of apartment leasing."
RealPage has repeatedly denied engaging in or enabling an anticompetitive business practice, arguing its software is "legally compliant" and in fact "enhances competition," noting that property managers can choose not to use their pricing recommendations.
"We remain unwavering in our belief that RealPage's revenue management software benefits both housing providers and residents and that the remaining lawsuits are based on misinformation and baseless allegations," the company wrote in a statement last year.
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