Local leaders, housing advocates and consumer protection groups gathered in the Montgomery County Council building in Rockville Tuesday to support legislation aimed at banning rent-setting algorithms that officials say are driving up costs for tenants.
What is a rent-setting algorithm?
A rent-setting algorithm is software used by some landlords and property managers to help determine rental prices. Programs offered by technology companies analyze large amounts of housing data, including rent prices, vacancy rates and market demand to recommend how much a landlord should charge.
Supporters of the software platforms say the technology allows landlords to maximize their operational efficiency, make more informed decision-making about what to charge for rent, and help grow their real estate profits. Critics of the technology argue that the tools can act like a digital form of price coordination because they rely on shared market data from competing landlords. Companies that provide the software have said the programs simply analyze market trends and help property owners respond to supply and demand.
What can be done about it?
Montgomery County Councilmember Will Jawando introduced Bill 8-26 which would prohibit landlords from using software to determine rent prices or lease terms.
“Nearly 40% of our county residents are renters,” Jawando said. “These are people who deserve stable, affordable housing, yet many feel the system is rigged against them.”
In an interview with MCM News after the press conference, Jawando said housing affordability is the top issue residents raise.
“When you have over 400,000 people who rent in this county, keeping them stable in their homes is so important,” he said, citing rising evictions and homelessness.
Councilmember Kristin Mink said renters are struggling despite working multiple jobs. “We are in a housing affordability crisis,” she said.
Councilmember Shebra Evans added that more than 64,000 county households spend over 30% of their income on housing.
Rockville councilmember shares personal perspective
Rockville City Councilmember Izola Shaw cited her personal experience as a renter. “It’s important to me as a councilmember and also as a renter in the building where I live,” she said.
“They practice algorithmic pricing, and within a year a whole floor was displaced with rents increasing as much as 10 to 12 percent.”
Shaw said the lack of rent stabilization in Rockville can make housing costs unpredictable for tenants and added that the city is considering similar measures to address the issue.
Industry groups push back against the legislation
Critics argue the bill targets the wrong problem. Brian Lou of the Apartment and Office Building Association of Metropolitan Washington said that the software helps landlords respond to market conditions.
“I think we have a supply and demand problem here in Montgomery County and across the region,” Lou said after his public testimony Tuesday.
He warned that banning the technology could discourage investment and new housing development.
The debate continues
Supporters say Bill 8-26 would close a regulatory gap by banning the use of algorithmic devices to set rents and establishing enforcement mechanisms within the county.
The council will continue reviewing the legislation following the public hearing.
