(Another Chance to) Keep Calm on Pricing Algorithm Bans

Last month, Montgomery County, Maryland became the latest local government to implement a supposed “ban” on algorithmic pricing for rental housing.  In short order, I saw one industry consultant offer companies “help” with complying with the ban while a customer of REBA Rent reached out for our analysis of how this would affect their use of REBA Rent in that county. 

As with all the other state and local “bans” over the past two years, this new law is much more bark than bite…at least when it comes to software like REBA Rent that was already purposefully designed to comply with the more than a century of prior antitrust laws and practices. 

County Council Bill 8-26 goes down the well-trodden path of 1) a provocative and misleading title (“…Prohibition Against…Rent-Setting Algorithms) and 2) an equally provocative and misleading introduction (“An Act to prohibit the use of algorithmic devices to establish rents or rental terms in the County”). 

Game over for legacy systems like LRO and Yieldstar (or AIRM) and well-established contemporary systems like REBA Rent, right? 

Not so fast… 

Like my very first post on the first local “ban,” we must “keep calm, and read the second section!” 

As with every other state and local ordinance on the subject, the next section legally defines “algorithm” in a much more restrictive way that any natural use of the English language would. It specifically defines the banned algorithmic devices as any device that “uses non-public competitor data concerning historical or contemporaneous rents, rent changes, supply levels, occupancy rates, or lease or rental contract termination and renewal dates.” 

In other words, this new law doesn’t really change the practices established through the spate of DOJ and state settlements. It doesn’t actually prohibit rent-setting algorithms; it only prohibits those which use non-public competitor data. And even the systems that had been using non-public data stopped doing so quarters ago. 

So, there you have it. Just another performative act by politicians more interested in optics than actually solving the housing affordability challenge. And not anything that changes how any of our customers continue to serve their residents with pride and distinction.