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What happened, who is involved, and when it takes effect

New York Governor Kathy Hochul signed a law that bans landlords from using software that sets rents in a way that amounts to price fixing. The law takes effect in 60 days. It updates New York state antitrust rules to treat the use of certain pricing software by landlords and property managers as collusion under state law.

This move follows investigative reporting and legal actions that linked companies such as RealPage to higher rents. The U.S. Department of Justice has filed a lawsuit alleging that algorithmic pricing tools helped inflate rents. The new state law aims to protect renters during a period of housing affordability stress.

Quick summary of the new law

The law makes several key changes for rental markets in New York:

• It forbids landlords and property managers from using software that effectively fixes or coordinates rental prices across different buildings.
• Using such software can be treated as collusion, which is illegal under state antitrust statutes.
• The law becomes effective 60 days after the governor signed it, so landlords and vendors have a short window to adjust practices.

Who is covered

The law applies to property owners, landlords, and third party property managers who set rents. It also covers software vendors who provide pricing systems to those parties, since the legal framing treats participating landlords as colluding when they rely on certain algorithmic tools.

Why this matters to ordinary renters

Many renters feel the impact directly when asking prices rise faster than wages and inflation. State lawmakers and tenant advocates say algorithmic pricing tools have contributed to faster rent growth. Estimates in reporting suggest algorithm-driven practices could have boosted rents by billions of dollars nationwide, including an estimate around 3.8 billion dollars in additional rent in 2024.

For renters in New York, the law means there is now a state-level route to challenge or stop landlords who use software to coordinate or standardize rent increases across multiple properties.

Background: RealPage, ProPublica, and the DOJ lawsuit

Investigations by journalists and researchers raised concerns that some property management software recommended rent changes that matched across competing buildings. One company that received attention is RealPage, a large provider of rental pricing tools. Reporting showed patterns that suggested software could push similar prices across competitors, rather than produce independent decisions by each landlord.

The U.S. Department of Justice filed a lawsuit alleging that algorithm-driven pricing helped inflate rents by reducing competition between landlords. The New York law responds to these concerns by creating a specific state-level prohibition.

How algorithmic rent-setting works, in simple terms

Algorithmic pricing tools use data to recommend or automatically set rents. Typical inputs include vacancy rates, local rents, tenant demand, seasonal patterns, and landlord-supplied constraints. The software may run optimization routines that seek to maximize revenue or occupancy for a multi-property client.

Two technical features explain why these tools may reduce competition:

• Shared inputs: If many landlords use the same vendor, their pricing decisions can start to look the same because the vendor uses the same market signals and models for all clients.
• Automated actions: When pricing updates happen automatically and frequently, landlords may not exercise independent judgment. That may reduce price variation that normally comes from competition.

Why algorithmic pricing can lead to anticompetitive results

Economists and lawyers worry that these systems can coordinate outcomes even without an explicit agreement among competitors. Coordination can occur because algorithms respond to the same signals and because vendors may design systems that encourage uniform pricing to reach higher aggregate revenue. When competitors stop acting independently, prices can remain higher than they would under active competition.

Legal implications and how enforcement could work

The law updates New York’s antitrust framework by making the use of certain pricing algorithms actionable as collusion. That gives state attorneys and private parties a clearer basis to sue landlords who use software in ways the law bans.

Potential legal effects include:

• Private lawsuits by tenants or tenant groups seeking damages or injunctive relief.
• State enforcement actions from New York agencies or the state attorney general to stop illegal practices.
• Litigation against software vendors if they are seen as facilitating or encouraging collusion through their products.

Practical consequences for landlords and proptech vendors

Landlords and property management firms that rely on algorithmic pricing will need to review contracts and business processes. Vendors that sold automated pricing tools may have to change product features, disclosures, or terms of service.

Practical compliance steps include:

• Auditing pricing tools to determine whether they recommend coordinated prices across clients.
• Adding human oversight so that pricing decisions reflect independent judgment by each landlord.
• Contract updates with software vendors to limit automated cross-client coordination and to document independent decision making.
• Legal reviews to assess liability risks and to update policies for responding to enforcement inquiries or litigation.

Impact on renters and tenant advocacy

Tenant advocates say the law boosts protections for renters by creating a clearer way to challenge algorithmic price setting. Practical effects for renters may include fewer synchronized rent hikes across multiple properties, and opportunities to pursue legal remedies if they believe their landlord used banned tools.

What renters should watch for:

• Announcements from landlords or management companies about changes to pricing systems.
• Tenant groups or legal clinics offering guidance on possible claims if renters suspect coordinated pricing.
• Enforcement activity from state agencies, which could lead to broader remedies or refunds in some cases.

How this fits with other local bans and wider policy trends

Cities such as Jersey City, Philadelphia, San Francisco, and Seattle have enacted rules or ordinances that restrict algorithmic rent-setting at the local level. New York becomes the first state to create a statewide ban framed under antitrust law. The state action could encourage other states to consider similar measures.

Policy discussions will likely focus on balancing innovation in property technology with the need to preserve competitive markets for housing and to protect affordability.

Next steps and angles to watch for reporters and stakeholders

Key items to monitor in the coming months:

• How quickly landlords and vendors change software and contracts to comply with the new law.
• Statements and legal challenges from property industry groups and software vendors if they choose to contest the law’s application.
• Actions by the New York attorney general or state regulators to enforce the law and any results of enforcement actions.
• Responses from tenant groups and individual renters seeking remedies or refunds where coordinated pricing is suspected.

Key takeaways

• Governor Kathy Hochul signed a law banning AI enabled rent price fixing in New York, with a 60 day waiting period before it takes effect.
• The law treats the use of certain pricing software by landlords as collusion under state antitrust law.
• Investigations and the DOJ lawsuit highlighted how algorithmic tools, including those from RealPage, can push rents upward.
• Landlords, managers, and proptech vendors will need to review practices and add compliance steps, while renters gain a clearer route to challenge coordinated pricing.

FAQ

Does this ban stop all uses of software to set rents

No. The law targets software that results in price fixing or coordination among competitors. Landlords can still use analytics and tools that support independent decision making, provided those tools do not coordinate prices across different owners in a way that amounts to collusion.

Will renters automatically get refunds if their landlord used such software

Not automatically. Affected renters may need to join legal actions or rely on enforcement outcomes to obtain remedies. The new law creates clearer legal grounds for such claims, which could lead to damages or other relief in some cases.

Could this law face legal challenges

Potentially. Property industry groups or software vendors might challenge the law or its interpretation. Watch for litigation that tests how the law applies to different types of pricing tools and vendor arrangements.

Conclusion

New York’s law banning algorithmic rent price fixing is a significant step in how regulators respond to automated tools in housing markets. It names Governor Kathy Hochul, responds to concerns raised about companies such as RealPage and a DOJ lawsuit, and gives renters and state authorities a clearer path to challenge coordinated pricing. Landlords and proptech vendors must act quickly to review systems and policies before the law takes effect. For renters, the new rule creates a stronger basis to question price increases that appear to be the result of coordinated algorithmic decisions.