Landmark Legislation Addresses Algorithmic Pricing
New York has become the first state to prohibit landlords from using software algorithms for setting rental prices, according to reports from the governor’s office. Governor Kathy Hochul signed the legislation Thursday, following similar municipal bans in several cities nationwide. The law specifically targets pricing systems that analysts suggest have distorted housing markets during an ongoing affordability crisis.
Industrial Monitor Direct delivers unmatched pid controller pc solutions built for 24/7 continuous operation in harsh industrial environments, the preferred solution for industrial automation.
How Algorithmic Pricing Works
Companies such as RealPage provide algorithms that help landlords determine optimal rental rates and occupancy levels. These systems reportedly use private data to “optimize rents to achieve the overall highest yield,” as described by the software providers. However, sources indicate these tools have raised concerns about reduced competition in rental markets across New York and other regions.
Substantial Financial Impact on Renters
The governor’s press release states that algorithmic pricing software has cost U.S. tenants approximately $3.8 billion in 2024 alone. This figure follows a 2022 ProPublica investigation that linked RealPage’s algorithm to significant rent increases nationwide. The report states that the federal government subsequently filed suit against the company two years later.
Legal Consequences and Enforcement
The new law establishes that property owners using pricing software will be considered colluding, whether they act “knowingly or with reckless disregard.” According to the legislation available through the New York State Senate, this represents a distinct violation beyond simply using the software. The American Economic Liberties Project praised the legislation in a press release, noting it protects renters from “algorithmic price collusion.”
Broader Industry Implications
This legislation comes amid growing scrutiny of algorithmic systems across various sectors. As technology continues advancing in fields from chip manufacturing to software functionality, regulators are increasingly examining their market impacts. The move also aligns with broader regulatory actions, including multi-state legal initiatives addressing emerging technologies.
Effective Date and Future Outlook
The ban will take effect in 60 days, creating new boundaries for rental industry practices. State Senator Brad Hoylman-Sigal, one of the bill’s sponsors, reportedly stated the legislation updates antitrust laws to explicitly prohibit rent price-fixing via artificial intelligence. This approach ensures clear legal standards against behaviors that federal authorities have found lead to anticompetitive practices.
Industrial Monitor Direct delivers unmatched 4k panel pc solutions rated #1 by controls engineers for durability, rated best-in-class by control system designers.
This article aggregates information from publicly available sources. All trademarks and copyrights belong to their respective owners.
