Liberal out-of-touch craziness strikes once again in San Francisco. Despite it being arguably one of the most tech-friendly cities in the world, the city’s Board of Supervisors has voted to ban a type of algorithmic software landlords can use to analyze supply and demand, and other factors to help them determine rents.
The Board supposedly took this move to help hold down rents but it’s more likely they acted to find a scapegoat to distract from the real problems – counterproductive liberal housing regulations, along with Biden-Harris administration inflationary policies that have pushed the cost of everything higher throughout the economy.
A recent CNBC report on rental costs in U.S. cities ranked San Francisco #2, behind only New York, as the most expensive place in America to rent an apartment, and it’s been expensive for many years, long before any software program came to market. The average monthly rent is $3,139, meaning that renters have to earn $125,545 a year to be able to maintain a comfortable lifestyle.
That’s more than double the overall annual median U.S. salary of $59,000.
San Francisco’s ban is piggybacking on actions proposed by the Biden-Harris administration to control rents. They released a fact sheet detailing their plans to cap rent increases and spend taxpayer money on projects meant to expand housing availability.
As usual, government interference in the private sector, in this case the housing market, will almost inevitably fail to produce meaningful results. The software bans and rent caps are driven more by election year politics than sound housing policy.
The type of software in question in San Francisco simply provides a reality-based picture of the rental market and prevailing economics. It doesn’t determine prices and is hardly part of some underhanded plot to overcharge renters. On the contrary, algorithmic housing software supports increased occupancy, more dealmaking with tenants, and other outcomes that benefit renters.
These nonsensical attacks on software engineers are a blatant attempt to score political points and divert public attention from the inflationary policies of the Administration that have driven up prices for everything consumers buy. The current White House has a well-known history of pursuing baseless claims of misconduct in a wide variety of industries. Housing just happens to be the target of the moment.
Rental housing software has even been the subject of inquiry for the Department of Justice, which has signaled plans to issue a civil lawsuit. The inquiry is considered so speculative in nature to the point that the DOJ appears to be using the case as an exploratory effort to reconfigure the bounds of its authority.
According to former FTC officials, the DOJ’s thought pattern “implies a remarkably low threshold for classifying conduct as concerted action,” which, if successful, would ultimately have a profound chilling effect on our economies that rely on technological tools and efficient operations.
Housing policies in San Francisco and other progressive-run cities are a major driver of high rental costs. Eviction moratoriums, restrictive zoning, and affordable housing requirements, for example, all needlessly decrease rental unit inventories, pushing prices upward.
Algorithms and AI programs that are successfully being used in many industries to match prices of products and services to the amounts consumers are willing to pay, are not the problem – even though that is what the White House would like for you to believe.
The San Francisco Board of Supervisors is wasting its time and the taxpayers’ money on these headline-seeking endeavors. Scapegoating an innovative software product will have absolutely zero impact on rent prices and draw attention away from the lack of supply, anti-business policies, and other self-inflicted blows that are at the root of the problem.
Even in an ultra-liberal haven like San Francisco, voters should expect more common sense from city leaders.
J. Kenneth Blackwell is the former Ohio Secretary of State, Mayor of Cincinnati, and Assistant Secretary of Housing and Urban Development in the Administration of President George H. W. Bush.
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