8/15/25 10:57 AM | Pricing Seattle Pricing Algorithm Ordinance: A Detailed Explanation

Ordinance text (bold titles added for readability)

Implications and Commentary

Title

AN ORDINANCE relating to prohibiting algorithmic rent fixing; and adding a new Chapter 7.34 to the Seattle Municipal Code.

Note that this title says it prohibits algorithmic rent “fixing.” It does not prevent algorithmic rent pricing.

Preamble

WHEREAS, in recent years, software using competitive non-public information provided by landlords to suggest and set rent prices and other lease terms has proliferated in rental markets across the nation; and

WHEREAS, the U.S. Department of Justice (DOJ), along with several state attorneys general, filed a civil lawsuit against RealPage, Inc., alleging that RealPage contracts with competing landlords who provide nonpublic competitively sensitive information about rent and other lease terms, which help the software generate recommendations on rental pricing and other terms in violation of antitrust laws; and

WHEREAS, while Washington State was originally part of the multi-state lawsuit filed by DOJ, the Attorney General withdrew the claim and filed a suit in state court instead, alleging violations of the state’s Consumer Protection Act; and

WHEREAS, other jurisdictions across the country, including San Francisco, Portland, Berkeley, San Diego, Philadelphia, Minneapolis, and Colorado, have considered, are considering, or have passed legislation to regulate coordination between landlords or the use of algorithmic software to set rent; and

WHEREAS, the Washington State Legislature considered regulating algorithmic rent fixing and noncompete agreements in Senate Bill 5469 in the 2025 legislative session; and

WHEREAS, this legislation is modeled on the legislation considered by the Washington State Legislature; 

Note the focus on using nonpublic information.

Note the 2nd mention of nonpublic sensitive information. Clearly this is a (the?) primary motivator.

Generic comment with no real implication.

Generic band wagoning rhetorical flourish with no real implication.

Generic band wagoning rhetorical flourish with no real implication.

Generic band wagoning rhetorical flourish with no real implication.

NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. A new Chapter 7.34 is added to the Seattle Municipal Code as follows:

Chapter 7.34 ALGORITHMIC RENT FIXING

Boilerplate

Findings

A. The prevalence of new software programs, often referred to as “algorithmic devices,” has increased over the past several years.

B. These devices allow landlords to indirectly coordinate with each other by sharing non-public, sensitive, and proprietary information to the software program, which then recommends rental rates and occupancy levels.

C. In 2022, an investigation by ProPublica into companies with such software showed that for “one neighborhood in Seattle, ProPublica found, 70 percent of apartments were overseen by just ten property managers, every single one of which used pricing software sold by RealPage.”

D. Use of such software by landlords likely drives up rent and vacancies and may be illegal price-fixing.

E. As of 2019, renters outnumber homeowners in Seattle.

F. Substantial increases in rent are one of the reasons for the increase in the share of renter households who are cost burdened (defined by HUD as spending more than 30 percent of gross income on housing cost), with average monthly rents increasing by 32 percent, after adjusting for inflation, between 2012 and 2022.

G. The Attorney General estimates that about 800,000 leases in Washington were priced using RealPage software between 2017 and 2024.

H. The City has an interest in protecting consumers as well as addressing factors that artificially inflate an already high demand for rental housing.

Largely correct with no material impact.

Yet a third mention of sharing nonpublic information.

Ignores the fact that a) there is more than one software offered by RealPage and b) parameters in software like LRO make for very different results within the same software.

An assertion with no factual basis to support it.

I assume correct but no material impact.

Largely correct but that’s due to market forces and more likely caused by Seattle’s onerous building restrictions, not because of software.

I assume correct but no material impact.

Infers that the software artificially inflates rents when, in reality, it merely responds to the existing supply/demand imbalance.

Definitions

“Coordinate” and “coordinating” mean a service provider’s: (1) collecting historical, anticipated, or contemporary prices, price changes, supply levels, occupancy rates, or lease or rental contract termination and renewal dates of residential dwelling units from two or more landlords, from private databases, or from public databases; and (2) analyzing or processing the information described in (1) through the use of a system or software that utilizes an algorithmic or other automated process to provide recommendations regarding rental prices, lease renewal terms, or occupancy levels to more than one landlord. “Coordinate” and “coordinating” do not include publishing rental price estimates that:

1. Are solely based on publicly available information;

2. Are equally available to all members of the public; and

3. Do not require a contract or agreement to obtain.

“Dwelling unit” has the meaning defined in Section 22.204.050.

“Landlord” means the owner, lessor, or sublessor of the dwelling unit or the property of which it is a part, and in addition means any person designated as representative of the owner, lessor, or sublessor including, but not limited to, an agent, a resident manager, or a designated property manager.

“Person” means any individual, firm, corporation, association, governmental entity, or partnership and its agents or assigns.

“Service provider” means any person that performs a coordinating function.

1. Novel approach to outlaw the use of public databases. This is likely a 1^st Amendment violation though unlikely that anyone will fund a lawsuit to challenge that.
2. Coordination is collecting from two or more landlords AND using that data to provide rent recommendations to more than one landlord—the implication is that software collecting data from one landlord and presenting recommendations to only that landlord is compliant.
3. The exclusions are important but not relevant to pricing and revenue management systems.
   
   Boilerplate with no material impact.

Lessors are landlords, not just owners; and “designated property manager” is explicitly the landlord. This means a fee manager CAN pool data across their portfolio, even if there are different owners.

Boilerplate with no material impact.

Boilerplate with no material impact.

Exclusions

This Chapter 7.34 does not apply to coordinating functions provided in connection with either short-term rentals as defined in Section 6.600.030 or hotels as defined in Section 22.204.090.

Raises an interesting question why these are excluded; is it legal to single out one vertical for prohibition but not others engaging in the same practice?

Violations

A. It is a violation of this Chapter 7.34 for any landlord, in or affecting commerce, to contract with or otherwise exchange anything of value in return for the coordinating services of a service provider.

B. It is a violation of this Chapter 7.34 for any service provider, in or affecting commerce, to provide coordinating services to two or more landlords.

C. It is not a violation of this Chapter 7.34 for a landlord to use a system or software recordkeeping tool absent otherwise prohibited conduct under this Chapter 7.34.

Establishes the prohibition to both purchase and to provide coordination services while still allowing record keeping.

Penalties

The City Attorney may file a civil action in a court of competent jurisdiction for violations of this Chapter 7.34 for civil penalties of up to $7,500 per violation. Each instance of coordinating services for each dwelling unit may be considered a separate violation. The court may award reasonable attorneys’ fees and costs to the City Attorney if the City Attorney is the prevailing party.

Establishes right for City to sue and sets penalties.

Right of private action

Any person injured by a violation of this Chapter 7.34 may bring a civil action in a court of competent jurisdiction against a landlord or other service provider violating this Chapter 7.34 to recover damages up to $7,500 per violation in addition to any actual damages incurred. The court may award reasonable attorneys’ fees and costs to any person injured by a violation of this Chapter 7.34 if that person is the prevailing party.

Remaining boilerplate

Section 2. The provisions of this ordinance are declared to be separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, subsection, or portion of this ordinance, or the invalidity of the application thereof to any person, property, or circumstance, shall not affect the validity of the remainder of this ordinance or the validity of its application to other persons, property, or circumstances.

Section 3. The Council requests that the Seattle Department of Construction and Inspections (SDCI): (1) conduct outreach efforts to educate landlords about the requirements of this ordinance; and (2) transmit to Council, by January 31, 2026, a report describing the results of these outreach efforts and proposing potential ways that SDCI could assist with the implementation of this ordinance.

Section 4. This ordinance shall take effect as provided by Seattle Municipal Code Sections 1.04.020 and 1.04.070.