The San Diego housing market just made history. In June 2025, the city passed a law that stops landlords and property managers from using certain AI rent-setting tools. The rule is called the Anti-Competitive Automated Rent Price-Fixing Prohibition Ordinance, and it’s shaking up how owners decide what to charge for rental properties.
If you own a property in San Diego, this new ordinance affects how you set rents, choose software, and manage your rental terms. Here’s what it means and how to stay compliant while keeping your business strong.
Key Takeaways
- San Diego’s ordinance bans AI rent-setting tools that use nonpublic competitor data.
- Landlords and property managers must review their software and stay compliant.
- Using rent-setting algorithms that compare confidential data can lead to legal trouble.
- Hiring a licensed property management company is a smart way to manage pricing and follow new laws.
- The movement against algorithmic rent and price fixing is spreading across California and the country.
Why San Diego Passed This Law
The city said it acted to protect renters and stop unfair rent hikes. For years, AI-powered tools and other rent-setting software promised to help property owners maximize profit and take the guesswork out of pricing. These systems use algorithms that collect information from multiple landlords, analyze rental rates, and then recommend rental prices.
That sounds helpful, but here’s the problem. Many of these AI rent-setting tools rely on nonpublic competitor data such as private lease details or internal occupancy levels that only landlords and managers can see. When that data is shared across companies, it can make the housing market less competitive.
Now, San Diego’s ordinance bans the sale and use of those algorithmic rent tools inside the city. You can read the official text on the City of San Diego’s website.
What the Ordinance Actually Does
The law makes it illegal to use, sell, or license any rent-setting algorithms that rely on nonpublic competitor data to advise or recommend rental rates.
It applies to all rental properties within San Diego, no matter the property type or size. The goal is to stop software systems that secretly share pricing data between additional landlords and use that information to set rental terms or predict rental prices.
The city says landlords can still use software that relies only on public data like online listings, market reports, or their own property records. But if your tool shares private competitor data, it likely violates the ordinance.
In short, any AI rent-setting tools that use private, shared data to influence how you set rents are now banned in San Diego.
Why Landlords Should Pay Attention
If you use revenue management software such as RealPage, Yardi, or another pricing system, it’s time to take a closer look. These AI tools were designed to help determine rental prices, but if they use nonpublic data, they may now put you at legal risk.
Even if you didn’t build the tool yourself, you’re responsible for how it’s used on your rental properties. The ordinance allows tenants to sue landlords who violate the rule. You could also face penalties from the city for using banned rent-setting software.
San Francisco, Berkeley, and Minneapolis are already looking at similar policies. California lawmakers have proposed a state bill to expand these rules statewide, and eight states across the country are studying how to regulate AI rent-setting tools.
According to Axios San Diego, this local ban could shape national policy on AI rent-setting and housing laws.
This means the new law in San Diego could become a model for future state laws and local ordinances on AI rent and housing costs.
How to Stay Compliant
If you’re a landlord or property manager, the first step is to understand what your systems are doing.
- Audit your software. Ask your vendor how it sets rent recommendations. If they say it uses nonpublic competitor data, stop using it immediately.
- Review your contracts. Many management agreements or software subscriptions allow data sharing with other landlords. Look for clauses about competitor data or occupancy levels.
- Document your process. Keep written notes or spreadsheets showing how you determine rental prices and what public sources you rely on.
- Train your team. Make sure your leasing staff and assistants understand San Diego’s ordinance and how to comply with it.
If you’re unsure, talk to a real estate attorney or a trusted property management company in California. A licensed property manager can handle rent pricing, market research, and rental terms while ensuring your business stays legal.
The Smarter Alternative: Hire a Property Management Company
Instead of juggling new laws, AI systems, and data rules, you can hire professionals who already understand compliance.
A property management company can:
- Monitor local housing market trends and rental rates
- Use public data and proven methods to set rents fairly
- Handle tenant communication and renewals
- Keep you updated on new state laws and city ordinances
- Help you ensure compliance with all AI and rent-fixing regulations
When you work with experts, you reduce the risk of mistakes and avoid problems with nonpublic data or AI tools. You also save time and protect your business reputation.
The Bigger Picture
The housing market is changing fast. AI is transforming how landlords price, lease, and manage rental properties, but laws like San Diego’s ordinance remind everyone that not all AI tools are fair.
By banning rent-setting software that depends on nonpublic competitor data, the city hopes to protect tenants and prevent algorithmic price fixing that can reduce competition.
If other cities follow, landlords across the country may soon need to rethink how they set rental terms and determine prices. The Department of Justice investigations are ongoing, and the outcome could shape future rules for the entire real estate industry.
Frequently Asked Questions
1. Can I still use sites like Zillow or Apartments.com to set my rents?
Yes. The ban only covers AI tools that use nonpublic competitor data, not public market websites. You can still rely on open listings to guide your pricing.
2. What if I accidentally use banned rent-setting software?
You could still face penalties even if it was unintentional. Stop using the tool right away and document how you set your rental prices. It’s best to consult a property manager to stay safe.
3. Does this law affect small landlords too?
Yes. The ordinance applies to all rental properties in San Diego, no matter the size. Small landlords can stay compliant by using public data or hiring a property management company for help.
Staying Smart (and Legal) in San Diego’s New Rental Landscape
San Diego’s ban on AI rent-setting tools is changing the rules for everyone in real estate. The city is taking a stand against hidden data sharing and unfair pricing systems.
If you are a landlord, focus on transparency and fair pricing. Use public data, hire professionals, and follow the ordinance closely. AI-powered tools can help with some parts of your business, but when it comes to rent, human judgment is still your best option.
Working with experienced property managers gives you peace of mind. You stay compliant, protect your income, and keep your rental properties profitable without worrying about violating new laws.
At Realty Management Group, our team understands San Diego’s ordinance, state laws, and the fast-changing housing market. We rely on market research and real-time data, not risky algorithms, to help landlords set rents, attract tenants, and grow their portfolios the right way.
Let our experts handle the details so you can focus on what matters most: your investment.
Contact Realty Management Group today to learn how we can help you stay compliant and maximize your rental income safely.
Additional Resources:
- Tenant Retention Strategies for Multifamily Properties in San Diego
- How Tech Growth in San Diego is Influencing Rental Demand
- 10 Best High Schools in San Diego in 2025: Top Public & Charter Schools
