Minneapolis City Council passes rent algorithm ban

Listen to this article

An ordinance that would prohibit the use of algorithmic software utilizing nonpublic data to determine rent pricing was passed by the Minneapolis City Council at its Thursday meeting.

The ordinance, which was approved on an 11-2 vote, will be enforced in a complaint-based system and through self-attestation. If a landlord is found to be using such software to set rent on a dwelling unit, tenants would be allowed to take civil action against the landlord, and Regulatory Services could potentially revoke their rental license.

If signed by Mayor Jacob Frey, the ordinance will go into effect March 1, 2026.

The policy was introduced by Council Members Robin Wonsley, Jeremiah Ellison and Jason Chavez. There is currently a bill in the Legislature that would take similar action, and U.S. Sen. Amy Klobuchar has introduced a similar bill in Congress.

Landlords, according to the ordinance, will no longer be able to use an “algorithmic device” that would use nonpublic competitor data around rent prices and occupancy levels in calculations. Ellison, during a discussion Thursday, compared the use of rent-setting algorithms to a group of landlords getting together and deciding what to place rents at, which is illegal. Ellison said the algorithm software this policy targets isn’t being used widely, saying it is better to be preemptive in banning it, until the technology is better understood or regulated.

“Where this technology has become exacerbated, it has wreaked havoc on renters there and we are not at that level of scale yet in Minnesota,” he said.

Council Members Katie Cashman and Linea Palmisano were the two dissenting votes on the ordinance. Cashman, in the Business, Housing and Zoning Committee meeting last week, voiced her opposition, stating that she had constituents reach out to her, urging her to vote against the bill.

Palmisano said she felt that the ordinance would end up hurting small landlords rather than the ones with a national presence and that she doesn’t know if the enforcement mechanism of complaint-based systems and self-attestation would work.

Ellison, in response, said the enforcement of regulations in the city is based on information collected over time.

“Self-attestation might sound like nothing, until a landlord lies,” Ellison said. “Then that lie, once discovered, strengthens a private right to action. That’s not small, that’s not nothing … that’s going to allow us to build on infrastructure and then allow tenants to leverage that infrastructure in order to protect themselves from aggressive rent hikes.”

If a landlord is found in violation of the ordinance, Wonsley said there is a menu of ways Regulatory Services could take recourse, such as writing a citation or moving a landlord to a different property condition tier. Regulatory Services also has the discretion to revoke rental licenses.

Back in January, the Department of Justice initiated a lawsuit against six of the largest landlords in the nation for participating in algorithmic pricing schemes that harmed renters. Five of those landlords operate in the Twin Cities — Greystar, LivCor, Willow Bridge, Cushman & Wakefield and Cortland. Minnesota Attorney General Keith Ellison has joined the lawsuit.

The DOJ lawsuit came about two years after ProPublica published a story examining the use of RealPage, a dominant software provider around rental algorithms.

When reached by Finance & Commerce, the Minnesota Multi Housing Association said it had no comment on the ordinance, citing pending litigation on the issue.

During a press conference after the  council meeting, University of Minnesota Twin Cities sophomore Siya Shelar said algorithmic pricing intensifies the already existent crisis of housing faced by the city and has significant implications on students, many of whom are first-time renters and have limited options due to student housing being concentrated geographically. Shelar is the director of local affairs for the U of M Twin Cities campus undergraduate student government.

“The passage of this ordinance is critical in working to resolving these inequitable rental rates, protecting tenant rights and promoting affordable housing for community members, which includes U of M students,” Shelar said.

The mayor now has one week to sign the ordinance into law or veto it. A spokesperson for Frey said he has not yet made a decision and is still reviewing the council action.

RELATED:

Wonsley to introduce ordinance banning rent-setting software

Minnesota lawmakers take aim again at statewide land use rules