Organizers in Bellingham have collected enough signatures for a new initiative to ban algorithmic rental pricing software.
The initiative is aimed at software companies that analyze public and private market data to suggest rental prices to landlords. Critics argue that the tools enable a form of collusion and price-fixing and allow landlords to skirt antitrust laws.
“This is not how we should be using this technology,” said Cleveland Harris, the chair of Community First Whatcom, the group that gathered signatures for the initiative. “It just feels like another way to extract or squeeze out more from folks who are price-burdened already”
Harris said the software can have a ripple effect, prompting landlords who aren’t using it to raise prices to stay competitive. It’s hard to tell exactly how many landlords in Bellingham are using the technology, he added.
“Even if we don’t have a fine tooth of who is using it and how, we know that the fact that it’s being used is having a negative effect on rental prices,” Harris said.
The initiative follows a state bill to ban price-setting software that failed to pass earlier this year. Seattle, Spokane and King County have passed similar laws targeting rental price-setting algorithms.
Rental pricing algorithms cost renters across the country as much as $3.8 billion in 2023, according to a 2024 report from the White House Council of Economic Advisors.
Bellingham City Council members expressed broad support for the idea when discussing the initiative at a meeting this week, though several said they had concerns about some of the initiative’s language. Under the current proposal, landlords who violate the restrictions more than once could face criminal penalties of a $5,000 fine or up to 90 days in jail.
“I'm just not comfortable with having a jail term,” Councilmember Lisa Andersonsaid during the meeting.
Anderson acknowledged that actual jail time for noncompliant landlords would be unlikely. During the meeting, Councilmember Jace Cotton jokingly asked the city’s assistant city attorney if his office was “chomping at the bit to lock up landlords for subscribing to software.”
The assistant city attorney’s answer was “no.”
The Bellingham City Council plans to vote July 27 on whether to send the initiative to voters, pass it into law, or send it to voters along with an alternative version drafted by the city council.
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