Rant: Algorithms inflate our rental costs; it's past time for a stop to this manipulation.
In the heart of the housing crisis in New York City, a proposed bill (S.7882/A.1417) is making waves in the Legislature. This measure, if passed, would be the first of its kind in the nation to outlaw the use of price-fixing algorithms in the rental housing market.
The bill is aimed at ensuring fairness and transparency in the rental housing market. It seeks to prevent residential housing managers from using software to collude on rental prices, a practice that has been found to lead to anticompetitive practices and price fixing.
The software in question is designed to maximize profits for landlords. It considers market data and private pricing information provided by real estate companies to recommend rents for landlords. Tenants in New York City have reported notable increases in their rents and abnormally long apartment vacancy periods due to the use of this technology by their landlords.
The bill comes in response to a 2022 ProPublica investigation that uncovered the use of such software by landlords in New York City. The investigation revealed that these algorithms are used to set rental prices, bypassing direct negotiations with tenants. Critics argue that this practice is anti-capitalistic and robs residents of their ability to advocate for themselves.
If passed, the bill would update New York's antitrust laws by prohibiting landlords and property managers from setting rents or determining changes to rents based on algorithm-driven recommendations which take into account private pricing information. It would also prohibit companies from knowingly operating platforms that facilitate collusive algorithmic rent-setting, or from doing so with reckless disregard.
The U.S. Department of Justice and several states have already taken action against this practice. In 2023, they filed a lawsuit against RealPage, the largest company behind rental price-setting software, and six major landlords who have utilized it. The lawsuit alleges that these companies used algorithmic pricing schemes that harmed renters by sharing sensitive information about rental prices and using algorithms to coordinate to keep the price of rent high.
As of August 2025, this legislation remains under consideration and has not been enacted into law yet. The final legislative outcome is not yet confirmed, but the bill's active status under legislative review indicates a growing trend among states to regulate algorithmic pricing to protect consumers. Similar legislative efforts can be seen in California SB 259, which addresses discriminatory pricing based on mobile phone data.
In conclusion, the proposed bill in New York State aims to outlaw the use of price-fixing algorithms in the rental housing market. If passed, it would make clear that rent price-fixing via artificial intelligence is against the law and set clear boundaries against harmful practices in the rental housing market. This could potentially provide much-needed relief to hard-working New Yorkers struggling with rising rents.
- The proposed bill S.7882/A.1417, if enacted, would be the first legislation in the nation to ban the use of price-fixing algorithms in the rental housing market, aiming to ensure fairness and transparency.
- The bill targets rental housing managers who use software to collude on rental prices, a practice that allegedly leads to anticompetitive activities and price fixing, as reported by tenants in New York City.
- The legislation aims to update New York's antitrust laws, prohibiting landlords and property managers from setting rents or determining changes to rents based on algorithm-driven recommendations that take into account private pricing information.
- The bill's active status under legislative review indicates a growing trend among states to regulate algorithmic pricing to protect consumers. Similar legislative efforts, like California SB 259, address discriminatory pricing based on mobile phone data.
