In the United States, with the rapid development of artificial intelligence technology, an increasing number of landlords are relying on algorithm software to set rents, which has drawn widespread attention and controversy. Recently, New York State Governor Kathy Hochul signed a new law banning landlords from using AI-driven price manipulation software. New York became the first state to implement this ban; previously, cities such as Jersey City, Philadelphia, San Francisco, and Seattle had also introduced similar measures.
Such algorithm software, for example, services provided by RealPage, help landlords calculate the optimal rent and even assess how many tenants and renewal conditions each unit is suitable for. RealPage claims that its algorithms can help landlords "optimize rent" and maximize property revenue. However, Hochul pointed out that these so-called "private data algorithms" actually cause "distortions in the housing market," placing more pressure on tenants amid the current housing supply and affordability crisis.
The new law not only clearly prohibits landlords from using these software to set rents but also considers property owners who use the software as accomplices. That is, if multiple landlords collectively use the algorithm for pricing, they are considered to be choosing not to compete in the market, constituting an illegal act. According to Hochul's press release, tenants in the United States lost about $3.8 billion due to the use of such software in 2024.
At the same time, a 2022 investigation by ProPublica showed a close relationship between RealPage's algorithm and the sharp rise in rents across the country. Just two years later, the U.S. government filed a lawsuit against RealPage. The bill aims to protect tenants from "algorithmic price collusion." Brad Hoylman-Sigal, another sponsor of the bill and a state senator, stated that this law will update existing antitrust laws, explicitly stating that using artificial intelligence for rent price manipulation is illegal and ensure boundaries are set to prevent anti-competitive behavior. The law will take effect 60 days after its enactment.
Key Points:
- 🏙️ New York State passed a new law prohibiting landlords from using AI algorithms for rent pricing.
- 💰 Using algorithm software led to U.S. tenants losing approximately $3.8 billion in 2024.
- ⚖️ The new law considers landlords using price manipulation software as anti-competitive behavior, setting legal boundaries.
