Prohibits a person or entity from knowingly or with reckless disregard facilitate an agreement between or among two or more residential rental property owners or managers to not compete with respect to residential rental dwelling units, including by operating or licensing a software, data analytics service, or algorithmic device that performs a coordinating function on behalf of or between and among such residential rental property owners or managers.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1417B
SPONSOR: Rosenthal TITLE OF BILL:
An act to amend the general business law, in relation to the use of
algorithmic pricing by a landlord for the purpose of determining the
amount of rent to charge a residential tenant
PURPOSE:
This legislation provides the use of an algorithm or algorithmic device
to adjust rental price levels is unlawful collusion.
SUMMARY OF PROVISIONS:
Section one amends the general business law by adding a new section
340-b. Section two establishes the effective date.
JUSTIFICATION:
A recent investigation conducted by ProPublica found that software
companies are collecting proprietary information from landlords across
the country, including those located in New York State, to help owners
and management companies engage in anticompetitive practices such as the
price fixing of rents.
For example, ProPublica's report found that 10 property managers who
work for companies that oversee 70% of all multifamily apartments in one
Seattle neighborhood used software, or artificial intelligence, to set
the rents across its buildings. What's more, these algorithms recommend
that landlords warehouse units to increase demand and drive up rental
costs in specific markets. The United States Department of Justice has
opened a criminal investigation into software companies that engage in
rental price fixing.
With New York State in the throes of an affordability crisis, it is
critical that we crack down on practices that artificially inflate rents
for tenants across the state. This legislation will strengthen New York
State's antitrust law to prevent companies from employing artificial
intelligence, or algorithms to fix market prices.
LEGISLATIVE HISTORY:
2023-24: A.10020 - Referred to Housing
FISCAL IMPLICATIONS:
Undetermined.
EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it becomes law.
