Gov. Sherrill signs law restricting algorithmic rent-setting to curb housing costs in New Jersey
NEW JERSEY — Gov. Mikie Sherrill on Monday signed legislation aimed at preventing the use of algorithmic rent-setting software that state officials say can artificially inflate housing costs and reduce competition among landlords.
The Forbidding the Algorithmic Inflation of Rent (FAIR) Act makes New Jersey the fourth state to explicitly regulate the use of rent-setting algorithms, according to the governor’s office.
The law prohibits landlords from using algorithmic rent-setting systems to coordinate rental prices or occupancy levels, a practice state officials say can drive up rents through landlord collusion rather than market competition.
“Housing affordability is one of the defining challenges facing New Jersey, and we’re using every tool available to bring costs down,” Sherrill said. “Landlords, who should be competing to provide the best price to renters, are instead colluding to drive prices up through so called ‘algorithmic pricing.’ That stops now. As we continue our whole-of-government approach to addressing our housing crisis, this legislation is another important step toward making our state more affordable.”
Attorney General Jennifer Davenport said the new law complements the state’s legal efforts to challenge algorithmic pricing practices.
“Rents in New Jersey are already far too high. But when landlords and tech companies conspire to artificially inflate rents, they make it even more difficult for hardworking New Jerseyans to find housing they can afford. That’s why I’m grateful to Governor Sherrill and the Legislature for their leadership in protecting New Jersey renters from rising housing costs through the FAIR Act,” Davenport said. “We are proud to be leading the fight in court against algorithmic collusion by landlords and tech companies. Today’s legislation provides a much-needed systemic solution for the problem, granting renters important protections that will expand housing opportunity in our state.”
Assemblywoman Lopez, D-Middlesex, chair of the Assembly Housing Committee, said the legislation addresses the growing use of technology in determining rental prices.
“As these algorithms increase in popularity, they contribute to an increasingly unaffordable housing market, placing undue financial strain on renters and exacerbating the housing crisis in New Jersey,” Lopez said. “We cannot let New Jersey families fall prey to predatory practices – intentional or otherwise – enabled by technology. This bill is a vital tool in stopping corporations from using big data to hike up housing and rental costs.”
Ana Maria Hill, vice president and New Jersey state director for 32BJ SEIU, said the measure gives renters additional protections.
“This bill gives families the power to end illegal rent increases that tear apart communities,” Hill said. “By prohibiting the use of rent-setting algorithms that can drive up housing costs, the FAIR Act takes an important step toward making housing more affordable for families. Crucially, it empowers renters to help identify and challenge unlawful practices through clear avenues for reporting violations and seeking relief. We look forward to working alongside tenants and the Attorney General’s Office to ensure we stand up to law-breaking landlords. We would like to thank Governor Mikie Sherrill for delivering for New Jersey renters and following through on a key campaign issue.”
State officials said algorithmic rent-setting software has come under increasing scrutiny nationwide over concerns that it allows landlords to coordinate rent increases, contributing to higher housing costs in already constrained rental markets.
“Companies that feed data into algorithms for landlords to collude and artificially inflate rents are violating our antitrust laws and squeezing tenants in the process. These are not your neighborhood landlord—they are large corporations making money hand over fist and forcing people out of their communities,” said Sen. Brian Stack, D-Hudson. “Housing is not a luxury; it’s a necessity, and prohibiting the use of this software by landlords to increase rents will help ensure the market remains fair, competitive, and within reach for New Jersey families.”
“Unethical rent-setting algorithms used by landlords are undermining competition and driving up housing costs for New Jersey families who are already struggling to afford groceries, fuel, and child care,” said Senate Majority Leader M. Teresa Ruiz, D-Essex/Hudson. “In some cases, renters have been found to pay hundreds of dollars more each year because of artificial price markups. Banning this software will help level the playing field, protect consumers, and make housing more affordable.”
The FAIR Act is part of the Sherrill administration’s broader affordability agenda, which includes expanding housing production, promoting transit-oriented development and increasing affordable housing opportunities across New Jersey.
