New Legislation, Signed by Governor Hochul, Will Protect Renters and Help Restore Fair Competition in Housing

Albany, NY — The American Economic Liberties Project today applauded Governor Kathy Hochul for signing S7882/A1417, landmark legislation that bans the use and sale of algorithmic rent-setting software in New York’s housing market. The new law makes New York the first state in the nation to explicitly prohibit landlords and software firms from using algorithms to collude on rent prices, a practice that has driven up housing costs and reduced competition across the country.

“We’re thrilled to see Governor Hochul sign common-sense legislation to protect New York renters from the algorithmic price collusion that has played a major role in driving today’s housing crisis,” says Pat Garofalo, Director of State and Local Policy at the American Economic Liberties Project. “Algorithmic rent-setting allows corporations to rig prices while hiding behind opaque data and spreadsheets — hiking costs, restricting supply, and pushing New Yorkers out of their homes. With this law, New York leads a growing movement of other courageous state and municipal champions taking on this dangerous practice, making clear that fixing rent prices behind an algorithm is just as illegal as fixing prices in a smoke-filled room. It’s a massive victory for renters and should serve as a roadmap for the rest of the country. We call on all other state leaders to ensure renters enjoy the same protection.”

Passed with bipartisan support in June, the law, sponsored by Senator Brad Hoylman-Sigal and Assemblymember Linda Rosenthal, ensures that rent decisions in New York will once again be based on market competition, not opaque data-sharing systems designed to maximize profits at tenants’ expense.

Algorithmic rent-setting tools collect sensitive rental data from multiple landlords and use it to recommend “optimized” rent prices across a market. Studies and investigations have found that property managers follow these algorithmic recommendations the vast majority of the time, resulting in double-digit rent increases and reduced housing availability.

This comes as the Department of Justice has continued to signal that algorithmic price coordination may violate antitrust law. The Federal Trade Commission has joined these efforts by filing statements of interest and warning that algorithms designed to “optimize” prices across competitors can have the same collusive effect as a traditional cartel.

New York’s new law builds on growing state and local efforts, including bans in about a dozen municipalities including San Francisco, Seattle, Philadelphia, and Jersey City, to curb the use of algorithmic pricing systems that distort fair competition in housing markets.

Learn more about the campaign end rental-price fixing here.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.