On June 24, 2025, the Seattle City Council unanimously passed a law banning algorithmic software like RealPage claiming the software enables property owners to price fix and drives up housing costs.
The law potentially infringes on property owners’ property rights, and stifles economic innovation. The constitutions Takings Clause prohibits the government from taking private property for public use without just compensation. By banning tools like RealPage, which property owners use to make informed pricing decisions and to avoid overpricing rents, Seattle is effectively restricting how property owners can determine a properties market rental rate. RealPage aggregates market data, both public and proprietary, to recommend rent prices, a practice no different from pricing software used in other industries, from airlines to retail. Renters have similar software to compare prices – should Seattle ban these apps too? Prohibiting the use of RealPage diminishes a property owners’ ability to operate their businesses efficiently, effectively devaluing their property without compensation. This regulatory overreach mirrors a “taking” by limiting the economic potential of rental properties.
The ban also may violate the Fourteenth Amendment’s Due Process Clause. The vague language of the ordinance, which prohibits any software that uses algorithms to recommend rent prices to multiple property owners, fails to provide clear guidance on what constitutes a violation. Property owners are left guessing whether basic market analysis tools or even publicly available data platforms could trigger penalties of up to $7,500 per violation. This lack of clarity creates a chilling effect, discouraging innovation and punishing lawful business practices without due process. The U.S. Supreme Court has consistently struck down vague regulations that fail to give fair notice, and Seattle’s law is ripe for such a challenge.
The legislation also treads on First Amendment protections. RealPage’s software facilitates the exchange of information, much of which is publicly available, such as rental listings. By banning the use of this data in algorithmic pricing, the city is restricting commercial speech and the right of businesses to share and use market information. The Supreme Court has protected commercial speech under the First Amendment, particularly when it involves truthful, non-misleading information. RealPage’s platform, which property owners voluntarily use and are free to reject, does not inherently deceive or harm consumers. Suppressing this information exchange undermines free-market competition, which benefits renters through transparent pricing.
Critics of RealPage argue it enables collusion, citing lawsuits from the Washington Attorney General and the U.S. Department of Justice. However, these claims lack evidence that RealPage forces property owners to adopt its recommendations. As RealPage Vice President Mike Semko noted in a recent Seattle Times article, the software provides market analysis with suggested prices, which property owners often decline. Between 2017 and 2024, only 40-50% of property owners adopted prices within 1% of RealPage’s suggestions, according to the Biden DOJ. This suggests competition, not collusion, as property owners independently set rents based on market conditions, supply, and demand.
Seattle’s housing crisis stems not from pricing software but from restrictive zoning, permitting delays, and regulatory burdens that stifle new construction. Banning RealPage does little to address these root causes while punishing property owners for using tools that enhance efficiency.
The Washington Policy Center has long advocated for market-driven solutions, such as streamlining permitting and reducing taxes on development, to increase housing supply and affordability.
Seattle’s ban on RealPage distracts from real solutions to the housing crisis and sets a dangerous precedent for government interference in private markets. Policymakers must prioritize constitutional protections and market innovation over performative regulations that fail to deliver meaningful relief for renters.
