Missoula City Council voices opposition to price-fixing rental software
Martin Kidston
(Missoula Current) Saying renters in Missoula were at an economic disadvantage given current prices, the Missoula City Council on Wednesday made an official stand against “anti-competitive” rental practices.
The resolution only discourages the use of “price-fixing algorithmic software,” but its sponsors hope it's enough to prod local property managers and landlords into steering clear of the technology.
“By relying on the shared data to set prices through a common pricing model, landlords effectively engage in price coordination, undermining free-market competition,” said council member Kristen Jordan, one of the measure's sponsors.
While Jordan said it's not possible to see who is using the technology and if anyone in Missoula is, the algorithmic software is widely used by many of the county's largest property management companies.
She said the software generates rental prices using non-public, sensitive data shared among competing landlords who subscribe to the service. A number of states are currently suing one large property manager for violating anti-trust laws.
“This is definitely not targeting our local mom and pop landlords,” Jordan said. “We're looking to make a statement against property management companies that may be engaging in the use of this software. This is a viable approach to show our renters that we support them in finding good faith, competitively priced rental units.”
According to data compiled by the Missoula Organization of Realtors, median monthly rent in the city has nearly doubled since 2010. The latest figures place the median rent at $1,178, slightly higher than the state's median rent of $1,083.
Jordan said the White House Council on Economic Advisers estimates that price-fixing algorithmic software costs renters roughly $70 more each month.
“A competitive rental market is central to affordability,” said Jordan. “To protect renters and promote fair competition, the City of Missoula should follow the lead of other forward-thinking cities and be openly against anti-competitive rental practices.”
Sponsors of the measure cited the city's recent housing assessment, which suggested that 9,000 renters were likely cost burdened in the local market. That means they're paying more than 30% of their income toward housing.
“As technology advances, it should be used to uplift the working class and make sure people don't have to work so hard to survive,” said co-sponsor Daniel Carlino. “The majority of our community is renters and today, the vast majority of these renters are having a hard time finding affordable housing in Missoula.”
All but two members of the City Council's housing committee backed the resolution. Council members Sandra Vasecka and Bob Campbell opposed it, but didn't go on the record as to why.
Mark Anderlik, a local resident, said he and his partner struggled to find an affordable house to rent. But during their search, they encountered one local landlord who included in the property description that she doesn't use price-fixing software.
While the city is limited in what it can do to address the issue outside of a resolution, Anderlik suggested that local property managers and landlords advertise that they don't use price-fixing software.
“I want to support this and maybe suggest that small mom and pop places use this to advertise that they're not using this price-fixing software,” he said. “It would sure help someone to see they're not using price-fixing software. They can use that as an incentive to get tenants.”