It’s good politics to fight against the inevitable.
This story made me roll my eyes a little bit. San Francisco – which is the global heart of the AI industry – has just banned AI software from the rent-setting process.
San Francisco, one of the priciest US housing markets and a global centre of artificial intelligence, is set to become the nation’s first city to ban algorithmic software used to recommend rents.
Such AI housing tools enable price fixing by large corporate landlords, Aaron Peskin, president of San Francisco’s Board of Supervisors, said this week. The board voted unanimously to block the products this week.
The San Francisco ban, which will go before the board for final approval on September 3, opens a new front in a long-running controversy over the role of software in setting rents as an affordability crisis worsens in many American cities.
Mr Peskin said he introduced the ordinance after observing that residential rents were going up during and after the pandemic even as people moved out of the city and downtown office vacancies climbed.
“This collusive price-fixing, price-gouging software will be determined to be illegal,” said Peskin, who’s running for mayor of San Francisco. “Meanwhile, we are leading the nation in saying ‘can’t do it here’.”
I mean seriously. You have one of the best documented housing shortages in the entire world, and you’re blaming rising rents on AI?
I mean, it’s good politics. AI is freaking everybody out, so it’s plausible in people’s (simple) minds that it’s behind the lift in rents. AI is taking our jobs. It’s interfering in our elections. It’s lifting our rents.
You could ride that ticket all the way into the Mayor’s office.
But if the problem is collusion, then before there was AI, there were telephone calls.
“Hey Chuck, what are you planning to set rents at this quarter?”
“Hi Chad, I was thinking $900 a month, what about you?”
(Everyone in America is called either Chuck or Chad.)
Collusion will happen, and we should try to stop it happening, but I don’t think this is a software issue.
They key issue is the shortage of housing, and unless you address that, you’re never dealing with the real problem.
Someone should tell the Australian Greens that too.
They welcomed the new housing minister with more calls for rent freeze.
In a letter to the incoming minister shared with this masthead, Chandler-Mather argued that O’Neil now oversaw one of the most expensive and overheated housing and rental markets in the world and that “all the Albanese Labor government has done is tinker around the edges”.
Chandler-Mather again called for negative gearing and the capital gains discount to be phased out, a two-year national rent freeze and a suite of other Greens policies to be implemented.
But the current suite of Greens policies directly makes the housing shortage worse. On the demand side, they fight limits to bring immigration back to more normal levels. And on the supply side, they oppose the densification of the inner cities.
Now, there might be good arguments for both of those policies. Maybe they align with your values.
But together they make the housing shortage worse, and a rental freeze doesn’t address the underlying problem.
(And to the extent that it disincentives more housing, could actually make it worse.)
But that’s politics for you. Crocodile tears for the symptoms, nothing for the causes.
DB