Legislation would prohibit certain software-driven pricing coordination practices that can contribute to soaring housing costs
(TRENTON) – In an effort to prevent rent-setting software from pricing New Jerseyans out of their homes, the General Assembly today passed Bill A3497, better known as the “Forbidding the Algorithmic Inflation of Rent (FAIR) Act.” Sponsored by Assembly members Yvonne Lopez, Margie Donlon, and Chigozie Onyema, the legislation would restrict the use of rental pricing algorithms and the impact that these algorithms may have on the overall rental market.
Bill A3497 targets the use of algorithmic rent-setting software and coordinated pricing practices that limit competition among landlords, driving up housing costs. The bill would make it illegal for rental property owners and third-party coordinators to share sensitive market information or use algorithms to coordinate rent 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,” said Assemblywoman Lopez (D-Middlesex), Chair of the Assembly Housing Committee. “We cannot let New Jersey families fall prey to predatory practices – intentional or otherwise – enabled by technology. This bill would be a vital tool in stopping corporations from using big data to hike up housing and rental costs.”
The legislation cites rental housing industry data showing median rent for a three-bedroom apartment increasing by 35 percent in the State from 2021 through 2024 and a studio in a more urban environment such as Hoboken increasing by 61 percent in the same timeframe.
“When we talk about affordability in New Jersey, housing and rental prices often take center stage and it’s important that we do all that we can to reduce the prices of rental properties,” said Assemblywoman Donlon (D-Monmouth). “Preventing the use of coordinated pricing practices is an important step in those efforts, particularly as a way of ensuring a fair and competitive market here in New Jersey.”
Under this legislation, the Attorney General would be charged with establishing, on the official website of the Department of Law and Public Safety, a location to receive complaints alleging any violation or suspected violation of the bill to help ensure accountability and enforcement of the law.
“New Jersey residents deserve a housing market that works for them, not against them. When technology is used to manipulate the market, it becomes even harder for our residents to find affordable housing,” said Assemblyman Onyema (D-Essex, Union). “At a time when too many New Jerseyans are struggling, this bill is about putting people before profits.”