Please find below the latest legislative updates from our legal counsel, Paul Cohen, regarding Bill 240823 on Price Fixing.
“Recently, Councilmember O’Rourke introduced legislation which seeks to prohibit housing providers and other industry practitioners from lawfully utilizing artificial intelligence (AI) and algorithm-based tools in their day-to-day business operations to help determine rental pricing and occupancy levels. This legislation comes on the heels of an antitrust lawsuit filed against RealPage, a real estate software company, alleging that its algorithmic pricing software allowed landlords to illegally fix rental prices.
The legislation as it was originally written, prohibited the collection of both public and non-public data concerning prices, price changes, supply levels, occupancy rates, or lease or rental contract termination and renewal dates of residential rental units from two or more real estate lessors and then recommending or suggesting rental prices, fees, rental terms, or occupancy levels to a real estate lessor based on such information.
In response to this proposed legislation, Hapco Philadelphia joined with Building Industry Association of Philadelphia, Pennsylvania Apartment Association, Commercial Real Estate Development Association, Building Owners and Managers Association, Greater Philadelphia Association of Realtors and the Chamber of Commerce for Greater Philadelphia to fight this legislation. As a result of our collective efforts, we were able to obtain amendments to the bill as follows:
1. Instead of the legislation applying to public and private data, it now only applies to “non-public competitor information,” which is defined as: “Information that is not available to the general public, including information about actual rent prices, occupancy rates, lease start and end dates, and similar data, regardless whether the information is attributable to a specific competitor or anonymized, and regardless of whether it is derived from or otherwise provided by another person that competes in the same market or a related market.”
2. Specifically excluded from the ordinance is: “any report that provides existing rental data in an aggregated manner but does not recommend rent prices, fees, or occupancy rates or other rental contract terms for future leases.’
3. Also excluded from the ordinance is “providing information for the purpose of conducting market research for project financing or for the purpose of conducting an appraisal.”
While we had hoped to kill the bill altogether as it is just another law against Owners and their right to lawfully conduct business, we realized that was not going to happen as this was Councilmember O’Neil’s first bill and he was committed to getting it passed. As such, we were forced to settle for the above. The bill, as amended, passed the Committee and now moves on to City Council, where it is sure to pass. Finally, while the bill as written stated that it would go into effect immediately, we were able to delay its implementation for 90 days.“