New York Governor Kathy Hochul has enacted a groundbreaking law that prohibits landlords from using price-fixing software to determine rental rates, marking the first statewide ban of its kind in the U.S. This decision comes on the heels of various city-level bans seen in locations such as Jersey City, Philadelphia, San Francisco, and Seattle.
The legislation, signed on Thursday, specifically targets algorithms provided by companies like RealPage that assist landlords in setting rental prices based on data-driven insights. This software not only suggests optimal rental rates but can also recommend the ideal number of occupants for a unit and terms for lease renewals. Hochul highlighted that the use of these algorithms has contributed to significant distortions in the housing market, exacerbating the ongoing housing supply and affordability crisis.
Under the new law, property owners who continue to rely on such software will be viewed as colluding, thereby limiting competition in the rental market. This designation means that landlords who use algorithms to set prices could be subject to violations for doing so, even if they act without malicious intent.
According to Hochul’s administration, the use of price-fixing software has cost American tenants roughly $3.8 billion in 2024. A prior investigation by ProPublica had previously linked the algorithms from RealPage to inflated rental prices across the nation, prompting a federal lawsuit against the company by the U.S. government two years later.
Supporters of the bill argue that it protects renters from what is deemed “algorithmic price collusion.” Pat Garofalo, director of state and local policy at the American Economic Liberties Project, expressed approval of the legislation, while State Senator Brad Hoylman-Sigal noted that it modernizes antitrust laws to specifically outlaw rent-setting practices involving artificial intelligence that can encourage anti-competitive behavior.
The law will become effective in 60 days.
