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HomeMy WebLinkAboutOrdinance 19-O-26, Preventing Algorithmic Rent Fixing in the Rental Housing Market (1) (2) (1) 04/21/2026 19-O-26 AN ORDINANCE Creating Title 5, Chapter 3, Section 13, “Preventing Algorithmic Rent Fixing in the Rental Housing Market” WHEREAS, the City of Evanston is a home rule municipality under the Illinois Constitution of 1970; and WHEREAS, in Evanston as well as across the country, landlords are using software algorithms and other information exchanges between competitors to impact rents, artificially constrain supply, and further exacerbate the housing crisis; and WHEREAS, corporations sell software or access to information exchanges that promise to boost landlord profits by (1) collecting sensitive data from landlords across regional housing markets and (2) processing sensitive data and public data to recommend rent increases and create artificial scarcity by leaving a certain percentage of housing units vacant that drive up monthly rental rates; and WHEREAS, this problem is exacerbated by a trend toward consolidation in local rental housing markets, as more units are controlled by large, institutional landlords and property managers; and WHEREAS, access to affordable housing and fair and transparent housing prices is a critical issue for the residents of Evanston; and WHEREAS, 13,863 Evanston households, 44% of all Evanston households, are renters; and Page 1 of 6 WHEREAS, the median annual income of Evanston renter households is $60,613, and 68% of Evanston renter households who earn less than $75,000 per year are housing cost-burdened, spending at least 30% of their income on housing costs; and WHEREAS, 49% of all Evanston renter households are housing cost burdened; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EVANSTON, COOK COUNTY, ILLINOIS: SECTION 1. Title 5, Chapter 3, Section 13, “Preventing Algorithmic Rent Fixing in the Rental Housing Market” is hereby created as follows: 1. DEFINITIONS For the purpose of this Section: ALGORITHMIC DEVICE A device that uses one or more algorithms to perform calculations of data, including nonpublic competitor data and data concerning local or statewide rent amounts being charged to tenants by real estate lessors, for the purpose of providing recommendations to a real estate lessor concerning the amount of rent that the real estate lessor may consider charging a tenant. It includes a product that incorporates an algorithmic device but does not include: (1) any report published periodically, but no more frequently than monthly, by a trade association that receives renter data and publishes it in an aggregated and anonymous manner; (2) a product used for the purpose of establishing rent or income limits in accordance with the affordable housing program guidelines of the City of Evanston, the State of Illinois, or the federal government; or (3) a product or process that provides or uses, or the provision or use of, information for the purpose of (i) conducting market research for project financing or (ii) conducting an appraisal. 19-O-26 Page 2 of 6 NONPUBLIC COMPETITOR DATA Information that is not widely available or easily accessible to the public, including information about actual rent prices, occupancy rates, lease start and end dates, and similar data, regardless of whether the data are attributable to a specific competitor or anonymized, and that is derived from or otherwise provided by another person that competes in the same market as a person, or a related market. PERSON Any natural person, corporation, partnership, limited liability company, firm, or association. PREDISPUTE ARBITRATION AGREEMENT An agreement to arbitrate a dispute that has not yet arisen at the time of the making of the agreement. PREDISPUTE JOINT-ACTION WAIVER An agreement, whether or not part of a predispute arbitration agreement, that would prohibit, or waive the right of, one of the parties to the agreement to participate in a joint, class, or collective action in a judicial, arbitral, administrative, or other forum, concerning a dispute that has not yet arisen at the time of the making of the agreement. PRICE COORDINATION Engaging in both of the following acts: (a) collecting nonpublic competitor information concerning prices, price changes, supply levels, occupancy rates, or lease or rental contract termination and renewal dates of residential rental units from two or more real estate lessors, whether or not monetary or other valuable consideration is paid to acquire or collect such information; and (b) recommending or suggesting rental prices, fees, rental terms, or occupancy levels to a real estate lessor based on such information, including when such recommendation involves the analysis or processing of information using a computational or algorithmic system, software, or process. Price coordination does not include providing information for the purposes of (1) producing any report published periodically, but no more frequently than monthly, by a trade association that receives renter data and publishes it in an aggregated and anonymous manner; (2) establishing rent or income limits in accordance with the affordable housing program guidelines of the City of 19-O-26 Page 3 of 6 Evanston, the State of Illinois, or the federal government; or (3) conducting market research for project financing or conducting an appraisal. REAL ESTATE LESSOR Any individual, corporation, partnership, association, joint-stock company, trust, or unincorporated organization that owns real property and leases such property or any portion thereof in the form of a residential dwelling unit. RESIDENTIAL DWELLING UNIT Any house, apartment, accessory unit, or other primarily residential unit, including independent or assisted living units that are rented or owned. This does not include detention or correctional facilities, or inpatient medical care or licensed long-term care facilities that are occupied by bed rather than by unit. RENTAL PRICING The total amount of rent, including concessions, fees, and any other rental term or condition, that a residential tenant is required to pay under a rental agreement. 2. UNLAWFUL CONDUCT. (a) No person shall enter into an agreement with any other person to not compete with respect to rental pricing, fees, or any other rental term for residential dwelling units in the City, including but not limited to an agreement for services related to an algorithmic device. (b) No person shall engage in price coordination for residential dwelling units in the City, including through the sale, licensure, or provision of any service or product that involves price coordination of residential dwelling units, and including but not limited to a service related to an algorithmic device. (c) No person shall facilitate an agreement between two or more persons to not compete with respect to rental pricing, fees, or any other rental term for residential dwelling units in the City, including but not limited to an agreement for services related to an algorithmic device. (d) No person shall use, subscribe to, or contract or pay for, the services of another person if such services involve price coordination or otherwise encourage or facilitate an agreement with other persons to not compete with respect to any rental term for residential dwelling units in the City, including but not limited to services related to an algorithmic device. 3. APPLICABILITY. 19-O-26 Page 4 of 6 (a) This Section shall apply to any agreement that is executed on or after the effective date of this Ordinance. 4. ENFORCEMENT. (a) Public Enforcement. (1) Any person who does not comply with the provisions of this Section shall be fined five hundred dollars ($500.00) for each violation. Noncompliance fines shall be paid into the Affordable Housing Fund. (2) The City may file a civil action for violations of this Section, if it is deemed necessary by the City Manager or designee, for damages, injunctive relief, restitution or return of illegal profits, and/or civil penalties of up to five hundred dollars ($500) per violation. The court shall award reasonable attorney’s fees and costs to the City if the City is the prevailing party in such a civil action. Any civil penalties imposed shall be paid into the Affordable Housing Fund. (b) Private Right of Action. A tenant may file a civil action for violations of this Section for damages, injunctive relief, restitution or return of illegal profits, and/or civil penalties of up to five hundred dollars ($500) per violation. The court shall award reasonable attorney’s fees and costs to the tenant if the tenant is the prevailing party in such a civil action. A lease provision that limits a prevailing tenant from obtaining attorneys’ fees shall not be enforceable against a tenant’s claim for attorneys’ fees that arises under this Section. (c) Violations. Each separate day that a violation exists or continues, and each separate residential dwelling unit that is the subject of a violation, shall constitute a separate and distinct violation. (d) Invalidity of pre-dispute arbitration agreements and joint-action waivers. At the election of the person alleging conduct constituting a violation of this Section, or the named representative of a class or a collective action alleging such conduct, no pre-dispute arbitration agreement or pre-dispute joint-action waiver shall be valid or enforceable with respect to a case which relates to a violation of this Section. (e) Statute of limitations. A claim for a violation of this Section must be filed in court within four years of the date when a reasonably diligent person should have discovered that such violation occurred. 5. RELATIONSHIP TO OTHER LAWS. (a) This Section is intended to supplement any other remedies available under the laws of the City of Evanston, Cook County, the State of Illinois, or the United States. Remedies available under this Section are in addition to, and not instead of, any other available remedies. 19-O-26 Page 5 of 6 SECTION 2: All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 3: If any provision of this Ordinance or application thereof to any person or circumstance is held unconstitutional or otherwise invalid, such invalidity shall not affect other provisions or applications of this Ordinance that can be given effect without the invalid application or provision, and each invalid application of this Ordinance is severable. SECTION 4: This Ordinance shall be in full force and effect beginning thirty (30) days after passage. SECTION 5: The findings and recitals contained herein are declared to be prima facie evidence of the law of the City and shall be received in evidence as provided by the Illinois Compiled Statutes and the courts of the State of Illinois. Introduced: _________________, 2026 Adopted: ___________________, 2026 Approved: __________________________, 2026 _______________________________ Daniel Biss, Mayor Attest: _______________________________ Stephanie Mendoza, City Clerk Approved as to form: ______________________________ Alexandra B. Ruggie, Corporation Counsel 19-O-26 Page 6 of 6 April 21 June 8