On June 24, 2025, the Seattle City Council unanimously voted to ban algorithmic software such as RealPage, which they argue contributes to price-fixing among property owners and elevates housing costs.
The legislation raises significant concerns regarding property rights and economic innovation, potentially infringing on the Takings Clause of the Constitution. This clause prohibits the government from appropriating private property for public use without just compensation.
By prohibiting tools like RealPage, which help property owners make data-driven pricing decisions and prevent excessive rent, Seattle effectively restricts the methods property owners can use to determine market rental rates.
RealPage compiles both public and proprietary market data to suggest rental prices, a practice comparable to pricing systems utilized in various industries, such as airlines and retail.
With rental comparison apps also available to renters, critics question whether Seattle should consider banning those tools as well. The city’s ban, by diminishing property owners’ ability to operate efficiently, effectively undermines the value of their assets without compensating them for this regulatory interference.
The ordinance may further violate the Fourteenth Amendment’s Due Process Clause due to its vague language, which outlaws any software deploying algorithms for rent price recommendations across multiple owners.
This ambiguity fails to provide clear definitions of violations, leaving property owners uncertain if basic market tools or publicly accessible data platforms might subject them to significant penalties, potentially reaching up to $7,500 for non-compliance.
Such vagueness may create a chilling effect, deterring innovation and punishing lawful practices without clear due process guidelines. Historically, the U.S. Supreme Court has struck down vague regulations that lack fair notice, indicating that Seattle’s law may be vulnerable to legal challenges.
Additionally, the ban appears to interfere with First Amendment rights. RealPage facilitates the sharing of information, much of which is readily available to the public, including rental listings. By restricting access to this data for algorithmic pricing, the city may be infringing on commercial speech rights and limiting businesses’ abilities to share and utilize market information effectively.
The Supreme Court has consistently upheld protections for commercial speech under the First Amendment, especially when the information is truthful and non-misleading.
RealPage’s platform, which property owners can choose to utilize or ignore, does not inherently deceive consumers or cause harm. By stifling the exchange of information, the ban may impede market competition—ultimately disadvantaging renters by creating less transparency in pricing.
While critics have highlighted potential collusion facilitated by RealPage, legal action taken by the Washington Attorney General and the U.S. Department of Justice lacks satisfactory evidence of any coercive practices by the software.
Notably, RealPage Vice President Mike Semko remarked in a recent Seattle Times article that the software provides market analysis with suggested rent prices, which property owners frequently opt not to adopt. The Biden DOJ reported that between 2017 and 2024, merely 40-50% of property owners set rents within 1% of RealPage’s suggestions, a statistic indicative of competition rather than collusion.
Seattle’s ongoing housing crisis is rooted more in regulatory barriers like restrictive zoning and permitting delays than in pricing software like RealPage. The city’s decision to ban this technology does little to resolve these core issues, while inadvertently penalizing property owners who seek to enhance operational efficiency with available tools.
The Washington Policy Center has advocated for market-driven approaches to address these challenges, focusing on measures such as streamlined permitting and reduced development taxes to bolster housing supply and affordability.
Critics argue that Seattle’s ban on RealPage misdirects attention away from tangible solutions for the housing crisis and establishes a troubling precedent for government involvement in private market practices.
To effectively remedy the housing situation, policymakers should prioritize constitutional rights and foster innovation in the housing market instead of resorting to surface-level regulations that fail to provide significant support for renters.
image source from：washingtonpolicy
