A new law that bars landlords from using software to analyze competitor’ pricing and vacancy data to set rent levels was signed into law Monday by New Jersey Gov. Mikie Sherrill.
State officials said it is part of a push to control housing costs.
The New Jersey Monitor reported that the software is a practice opponents say has allowed landlords who would otherwise compete against each other effectively coordinate rent increases.
The new law also bans landlords from sharing sensitive pricing data that feeds these algorithms, and prohibits price-fixing agreements between landlords.
Sherrill said New Jersey’s rent prices have gotten “out of control,” the Monitor noted.
Law Takes Effect Next Year
“The problem is that these tools put competing landlords on the same team against renters,” Sherrill said before signing the bill in Newark. “Landlords can use these algorithms to coordinate prices, move in lockstep, and push rent higher and higher. It’s collusion by algorithm, and it’s illegal, and it stacks the deck against renters.”
The law passed the state Legislature on June 30 and will go into effect in July 2027. Some municipalities, like Hoboken and Jersey City, already have laws in place to bar landlords from using these programs to set rental prices, the Monitor reported.
Sherrill, a Democrat who took office in January, said the bill won’t “single-handedly fix our housing crisis,” but she said that it will stop some of the “relentless price hikes” that are aggravating the housing market.
The Monitor reported that the law comes about one year after the state Attorney General’s Office filed a lawsuit against Richardson, Texas-based RealPage, a software company that landlords have used to set rent prices, and nearly a dozen of the state’s largest landlords, arguing that they used the software to inflate rents in violation of antitrust and consumer protection laws.
A spokesman for RealPage did not immediately respond to a request for comment on the new law, the Monitor noted.
Ana Maria Hill, the state director for 32BJ SEIU, the largest union of property service workers in the nation, said many of the union’s members struggle to keep up with rent increases and live close to where they work.
Narrowly Worded
“The housing crisis wasn’t created by algorithms, but algorithms are contributing to it,” she said. “Today, we are saying no to them.”
The Monitor reported that Sherrill brushed aside concerns that the law could face legal battles, saying it was worded narrowly to avoid unintended consequences for real estate agents and other businesses not engaging in coordinated pricing.
Sherrill said state officials learned “from some of the court cases in other states so that we could make this more resilient.”
“I think we’ve crafted this incredibly carefully to both fit within the legal system, as well as protect renters from collusion and wrongdoing,” she said.
