New York bans AI-enabled rent price fixing

On Thursday, New York Gov. Kathy Hochul signed into instrumentality legislation banning the usage of price-fixing software by landlords to acceptable rental rates. New York is the archetypal authorities to outlaw algorithmic pricing by landlords, pursuing a fig of city-wide bans successful Jersey City, Philadelphia, San Francisco, and Seattle. 

Software companies such arsenic RealPage connection landlords algorithms that tin acceptable rental prices. The bundle tin besides assistance find the perfect fig of radical to unrecorded successful a portion oregon the presumption of a lease renewal. RealPage says it tin assistance its clients “optimize rents to execute the wide highest yield, oregon operation of rent and occupancy, astatine each property.” But the “private information algorithms” advertised by these bundle companies, Hochul says, origin the “housing marketplace distortion” that harms renters “during a historical lodging proviso and affordability crisis.”

Not lone does the instrumentality outlaw mounting rental presumption with the software, it besides says that immoderate spot owners who usage the bundle volition beryllium considered colluding. In different words, 2 oregon much rental spot owners oregon managers who acceptable rents with an algorithm are, successful practice, choosing to not vie with each other, whether they bash truthful “knowingly oregon with reckless disregard,” the instrumentality says. This is simply a chiseled usurpation from simply utilizing the bundle itself. 

The usage of this bundle has outgo US tenants astir $3.8 cardinal successful 2024, according to Hochul’s property release. A 2022 investigation by ProPublica linked RealPage’s algorithm with soaring rental prices crossed the country. Two years later, the US authorities sued RealPage. 

The measure protects renters from “algorithmic terms collusion,” Pat Garofalo, manager of authorities and section argumentation astatine the American Economic Liberties Project, said successful a press release. One of the bill’s sponsors, State Sen. Brad Hoylman-Sigal, said of the bill: “This authorities volition update our antitrust laws to marque wide that rent price-fixing via artificial quality is against the instrumentality and guarantee determination are boundaries against behaviors that the national authorities has recovered pb to anticompetitive practices and terms fixing.”

The instrumentality goes into effect successful 60 days.