Criticism of proposed Portland rent-setting software ban buried, sparking complaints
Portland's proposed ordinance to ban the use of algorithms to set residential rents has become a point of contention, particularly due to the omission of critical feedback from city economic development officials. Prosper Portland, the city's economic development agency, provided a scathing critique of the ordinance, warning that the ban could harm the city's real estate market. However, this analysis was not included in the final economic impact statement that was presented to the City Council, which instead highlighted only positive outcomes of the proposed ban. This omission has sparked controversy and raised questions about transparency in the legislative process.
The proposed rent-algorithm ban, championed by Councilor Angelita Morillo and supported by other progressive councilors, aims to prevent what they view as price-fixing among landlords using real estate data services. Critics, including Morillo, argue that the practice of using algorithms to set rents amounts to collusion among landlords, driving up costs for tenants. The ordinance is the first major piece of legislation introduced under Portland’s new City Council, making it a significant test for the new government structure.
As part of the ordinance, an economic impact analysis was included to assess how the proposed ban would affect Portland’s real estate market. This analysis, however, came under scrutiny after it was revealed that critical feedback from Prosper Portland staff was omitted. Prosper staff had raised concerns about potential reputational damage to Portland’s housing market and the possibility of deterring real estate investment due to increased legal risks. These points were deemed too speculative and were ultimately removed from the final impact statement, which Morillo’s office had edited and submitted.
Deputy City Administrator Donnie Oliveira, who oversees Prosper Portland, explained that the omitted points were removed because they lacked sufficient evidence to support them. He argued that the claims about deterring investment and damaging the housing market were based on speculation rather than data. This decision has sparked further debate, as Morillo’s office was not informed about the changes until much later, leading to concerns about the transparency of the process.
In response to the omission, Council President Elana Pirtle-Guiney has called for the full economic analysis to be added to the public record before the City Council’s meeting. She also stressed the need for clearer identification of who authors impact statements in the future, emphasizing that transparency in the legislative process is crucial to maintaining public trust. Pirtle-Guiney’s comments reflect a broader concern about ensuring that all sides of an issue are considered when creating new policies, especially those that could have significant economic consequences.
Morillo’s office has defended the research and the final version of the impact statement, arguing that it was based on thorough research and included ample citations. They pointed to references, such as a federal antitrust lawsuit against a real estate firm, to support the need for regulating rent algorithms. Morillo’s policy adviser, Suzy Deuster, emphasized that they made an effort to provide a transparent analysis, despite the criticism that some points were omitted from the final document.
Ultimately, the controversy over the omitted economic analysis has highlighted the challenges of navigating complex policy issues within a newly structured city government. The incident has prompted calls for clearer processes and better communication between city officials and departments when preparing impact statements for proposed ordinances. As the City Council prepares to consider the ordinance, the focus will likely be on how to balance the need for regulation with the potential economic implications, particularly in a city that is already facing challenges in housing construction and affordability.
