On Thursday, New York Governor Kathy Hochul took a decisive step in regulating the role of artificial intelligence within the housing market by signing into law a groundbreaking piece of legislation prohibiting landlords from employing software programs designed to fix or manipulate rental prices. With the enactment of this measure, New York emerges as the first state in the nation to impose a comprehensive statewide ban on algorithmic rent-setting tools—an initiative that expands upon a growing movement previously seen at the municipal level in cities such as Jersey City, Philadelphia, San Francisco, and Seattle, all of which have implemented localized restrictions on similar practices.
At the center of this legislative action lies the increasing use of sophisticated software developed by firms like RealPage, whose digital systems provide landlords with algorithmic assistance in determining not only rental pricing structures but also critical parameters such as optimal occupancy levels and the most financially advantageous terms for lease renewals. These programs claim to deploy data-driven insights to help property owners and managers maximize returns, promising to “optimize rents to achieve the highest overall yield, or the most profitable combination of rent and occupancy, for each property.” In theory, such technology is marketed as an efficient tool for market analysis; in practice, however, Governor Hochul contends that these “private data algorithms” are distorting the housing market through artificial price inflation. According to the governor, these tools contribute to widespread “housing market distortion,” exacerbating the struggles of renters amid what she describes as a “historic housing supply and affordability crisis.”
The newly enacted legislation is not limited to the simple prohibition of using software to establish rent levels. It goes further by introducing an explicit legal interpretation of such behavior as a form of collusion among landlords. Under the statute, any two or more property owners or their representatives who rely on algorithmic tools to coordinate or influence rental pricing—even if they do so “knowingly or with reckless disregard”—will be treated as engaging in anti-competitive conduct. In effect, the law equates the reliance on shared algorithmic pricing systems with an intentional decision not to compete independently in the housing marketplace, distinguishing this collective behavior as a separate and more severe violation beyond the mere use of technological resources for rental management.
In her statements accompanying the signing, Governor Hochul pointed to alarming financial consequences for tenants nationwide. According to her office’s release, the use of price-fixing software cost American renters an estimated $3.8 billion in 2024 alone—a figure that vividly illustrates the human and economic toll of opaque, data-driven rent escalation. This legislation also follows a pivotal 2022 investigation by *ProPublica*, which uncovered evidence linking RealPage’s algorithms to surging rental rates across multiple U.S. cities. The investigation’s findings prompted further federal scrutiny, and two years later, the U.S. government initiated a lawsuit against RealPage—a reflection of growing national concern over algorithmic collusion and its implications for market fairness and affordability.
Supporters of the bill have heralded it as a major advancement in protecting tenants from technology-enabled exploitation. Pat Garofalo, director of state and local policy at the American Economic Liberties Project, characterized the measure as a crucial safeguard against what he termed “algorithmic price collusion,” asserting that the legislation reaffirms the principle that competition laws must evolve to meet the challenges posed by artificial intelligence. One of the bill’s key sponsors, State Senator Brad Hoylman-Sigal, echoed this sentiment by emphasizing that the legislation updates New York’s antitrust statutes to explicitly prohibit algorithmic rent price-fixing. He further noted that the law establishes clear boundaries to prevent behaviors that federal authorities have already identified as precursors to anti-competitive practices and price manipulation.
Set to take effect within sixty days of its signing, this statute signals a new era of oversight in the interplay between technology and housing economics. By drawing a clear legal line against the use of algorithmic rent-setting tools, New York not only asserts its leadership in the field of consumer and tenant protection but also sets a precedent that may influence forthcoming policy debates in other states and at the federal level. In doing so, it reaffirms an essential principle of democratic governance: that technological innovation must always operate in service of fairness, transparency, and the broader public good, rather than in ways that deepen inequality or destabilize markets already under strain.
Sourse: https://www.theverge.com/news/801205/new-york-rent-price-fixing-ban-software
