The ordinance follows a limit on bulk tax lien purchases, passed by Council

The Providence City Council is considering an ordinance amendment to ban algorithmic rental price-fixing software at its May 1 meeting.

Providence’s proposed ban was introduced by City Council President and Ward 13 representative Rachel Miller on March 20. Portland, Oregon, is considering prohibiting rental algorithms (though the legislation has since been pulled back into committee), and Philadelphia and San Francisco have already implemented such bans. These algorithms can be used by landlords to coordinate raising prices, distorting the rental market.

Last summer, the U.S. Justice Department filed suit against RealPage, a software company that offers a rent-setting algorithm. Landlords used RealPage to collude and raise rental prices, affecting millions of rental units, the Department alleges.

“We’ve seen nationwide that algorithms are overriding the market and inflating rent. During COVID, when online tax sales started, we saw investment companies come in and buy property. We are building a Providence for every resident to thrive — which means not being taken advantage of by wealthy corporations and out-of-state private equity,” Miller said in a press release from the Council.

With housing costs soaring and supply not meeting demand, Providence’s housing crisis has taken a fiscal toll on residents. According to Rent.com, rental prices in the city skyrocketed 12.6%, with a median asking rent of $2,145 in 2024 — one of the highest increases in the U.S.

While it is unclear how directly price-colluding algorithms contribute to Providence’s housing crisis, property managers who use RealPage and other algorithms tend to prefer cities where rents already are soaring, according to ProPublica’s 2022 report, which prompted the federal investigation.

The share of property owned by private equity, large real estate companies, and investors is increasing throughout the country, though the extent in Providence specifically is unclear. Certain pockets of Providence are now increasingly owned by out-of-state developers — such as the areas near Providence College, as PPS found when it nominated the 02908 area to its Most Endangered Places list.

City Council passed an ordinance on April 18 to curb bulk purchasing of tax liens, limiting buyers to 10 titles per tax sale. Coupled with the proposed algorithm ban, these changes seek to “address the manipulation of the housing market by bad actors,” according to the City Council press release.

“Given that tax sales typically occur in late May, Miller said the council will pursue additional amendments to prevent the same operator from skirting the new rule by using multiple LLCs,” Providence Business News reported.

Some states, like New York, are considering measures to limit investor ownership of housing to address the housing affordability crisis in the context of the housing crisis and hyper-local real estate monopolies.

“RealPage’s clients include some of the largest property managers in the country. Many favor cities where rent has been rising rapidly, according to a ProPublica analysis of five of the country’s top 10 property managers as of 2020,” ProPublica reported. “All five use RealPage pricing software in at least some buildings, and together they control thousands of apartments in metro areas such as Denver, Nashville, Atlanta, and Seattle, where rents for a typical two-bedroom apartment rose 30% or more between 2014 and 2019.”

The conversation about banning rental algorithms has also resurfaced the debate about rent control, with Workers and Renters commenting on the Council’s recent Instagram post about the algorithm ban that bolder action, such as rent stabilization, may be required to ease Providence’s housing crisis. Mayor Brett Smiley has opposed rent stabilization previously.

“The administration is currently reviewing the proposed Rental Algorithm Ban ordinance,” the mayor’s spokesperson, Josh Estrella, wrote when asked for the Mayor’s thoughts on the ban.

City Council will vote on the algorithm ban at 6 pm on Thursday, May 1.

By Katy Pickens / Planning & Preservation Writer / kpickens@ppsri.org