San Francisco Considers Nation’s First Anti-Technology Housing Law

In recent years the federal government has become hyper-focused on litigating and legislating against American tech companies, often to the detriment of consumers. As we noted last week, RealPage Inc. became the latest technology company to find itself on the receiving end of a targeted suit from the Department of Justice (DOJ). As in similar misguided suits, the DOJ is alleging federal antitrust violations and collusion –  marking another attempt to pin blame onto the private sector, deflecting from the administration’s own inflationary actions.

The lawsuit itself goes after the use of commercial revenue software and is a direct attack on artificial intelligence (AI) and algorithms. Beyond the necessity of rational economic policy, the abundance of expert technological tools and software heavily contributes to U.S. dominance in innovation. It is disappointing that the DOJ is trying to undercut this strategic advantage of American industries with a spurious new lawsuit.

 Unfortunately, the attack on the AI rental software industry isn’t isolated to the federal government. This week, the San Francisco Board of Supervisors is slated to consider an ordinance that would ban the use of revenue management software in rental pricing decisions. The measure awaits final approval by the board on September 3^rd. Such a law, originating in the government-interventionist haven of California, increases the likelihood of other such measures in different jurisdictions. It would force American tech companies’ compliance departments to play regulatory whack-a-mole.

The Board should be focused on real solutions to the ongoing housing challenges facing the city. Housing remains one of the highest in the nation because of basic economics. An imbalance between supply and demand is driving prices upwards, as demand increasingly outpaces supply. At the same time, the city imposes some of the most burdensome permitting and regulatory regimes in the nation, which artificially raises the cost of construction of housing and stifles supply.

Instead of vilifying technology for providing rent recommendations, the Board of Supervisors should pursue reforms to zoning, taxes, and land-use policies to boost the development of housing units.

This anti-technology law is also particularly ironic because San Francisco is right down the road from the technological heart of the country in Silicon Valley. As the city seeks to establish itself as a hub for innovation and AI, measures like these certainly undermine that goal. Just last year, Mayor London Breed proclaimed San Francisco “the AI capital of the world,” but her words don’t match the actions of the Board. To stand by her words, she should come out fervently  against this misguided ordinance before it passes.

Policymakers everywhere ought to stand up, warning against any copy-cat measures in other localities. Housing shortages and high rent is not limited to San Francisco. Those localities must be dissuaded from eschewing useful solutions in favor of scapegoating software tools. If more jurisdictions follow the lead of San Francisco, it could create a patchwork of ordinances that could become a compliance nightmare for businesses to keep pace with.

The Council should reject this misguided ordinance and focus on the core, structural problems that cause high rents. Anything else is just window dressing.