Class Action Suit Claims UDR Violates San Diego Law by Using Algorithmic Devices to Set Rental Prices

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UDR, Inc. has been hit with a proposed class action lawsuit that alleges the rental management company unlawfully uses an “algorithmic device” to set rental prices and occupancy levels for residential rental properties in San Diego.

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Specifically, the 22-page real estate lawsuit claims that UDR has illegally utilized algorithmic devices from RealPage, a data analytics and property management software provider, to set rental prices and determine how many units to rent based on nonpublic competitor data, in violation of San Diego Municipal Code § 98.1103.

According to the complaint, on May 22, 2025, San Diego passed an ordinance amending the city’s Municipal Code to make it unlawful for a landlord to utilize algorithmic devices to calculate residential rental rates or occupancy levels based on nonpublic competitor data such as rental rates, rental rate changes, residential rental property supply levels, occupancy levels, or lease start and end dates. The case notes that the ordinance went into effect on June 21, 2025.

The lawsuit says that UDR has admitted to using RealPage and its algorithmic programs, such as YieldStar, that compile “proprietary” information from landlords and make real-time suggestions on how to price floor plans and units in multifamily rental housing.

The case says that UDR admitted in its answer to litigation against RealPage brought by the District of Columbia that it has used the company’s YieldStar as “one tool among others” to help with its decision-making regarding certain multifamily units.

Algorithmic devices have contributed to inflated rental prices and have made living in San Diego increasingly unaffordable for most families, the lawsuit shares. The Council of Economic Advisers to the Biden Administration estimated that algorithmic pricing increased the average monthly price for San Diego renters by about $99 in 2023, the complaint says.

The filing says that the San Diego ordinance was passed to protect the local rental housing market and tenants from corporate landlords such as UDR.

Additionally, the lawsuit says that economists and regulators agree that using algorithmic devices to set rental rates and occupancy levels can perpetuate social harms that are already pervasive within the housing market, as AI models have been known to produce biased or discriminatory outcomes.

“This is especially so where the RealPage algorithmic software captures niche, granular insights and lease details,” the filing adds.

The UDR class action lawsuit looks to cover all individuals who rented apartments from UDR in San Diego during the relevant time period.

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