New York Bans AI-Enabled Rent Price Fixing

New York Gov. Kathy Hochul has signed into law legislation banning the use of price-fixing software by landlords to set rental rates. From a report: New York is the first state to outlaw algorithmic pricing by landlords, following a number of city-wide bans in Jersey City, Philadelphia, San Francisco, and Seattle. Software companies such as RealPage offer landlords algorithms that can set rental prices.

The software can also help determine the ideal number of people to live in a unit or the terms of a lease renewal. RealPage says it can help its clients 'optimize rents to achieve the overall highest yield, or combination of rent and occupancy, at each property.' But the 'private data algorithms' advertised by these software companies, Hochul says, cause the 'housing market distortion' that harms renters 'during a historic housing supply and affordability crisis.'

Not only does the law outlaw setting rental terms with the software, it also says that any property owners who use the software will be considered colluding. In other words, two or more rental property owners or managers who set rents with an algorithm are, in practice, choosing to not compete with each other, whether they do so 'knowingly or with reckless disregard,' the law says. This is a distinct violation from simply using the software itself.

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