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.
STATE OF NEW YORK
________________________________________________________________________
1417--B
2025-2026 Regular Sessions
IN ASSEMBLY
January 9, 2025
___________
Introduced by M. of A. ROSENTHAL -- read once and referred to the
Committee on Housing -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- again
reported from said committee with amendments, ordered reprinted as
amended and recommitted to said committee
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
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The general business law is amended by adding a new section
2 340-b to read as follows:
3 § 340-b. Agreements to not compete with respect to residential rental
4 dwelling units. 1. As used in this section, the following terms shall
5 have the following meanings:
6 (a) "Algorithm" means a computational process that uses a set of rules
7 to define a sequence of operations.
8 (b) "Algorithmic device" means any machine, device, computer program
9 or computer software that on its own or with human assistance performs a
10 coordinating function.
11 (c) "Coordinating function" means performing all of the following
12 subfunctions, provided, however, that a product used for the purpose of
13 establishing rent or income limits in accordance with the emergency
14 tenant protection act of nineteen seventy-four, as amended, the rent
15 stabilization law of nineteen sixty-nine, as amended, the city rent and
16 rehabilitation law, the emergency housing rent control law, or an
17 affordable housing program administered by a federal, state, or local
18 government or other political subdivision shall not be considered to be
19 performing a coordinating function:
20 (i) collecting historical or contemporaneous prices, supply levels, or
21 lease or rental contract termination and renewal dates of residential
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04298-03-5
A. 1417--B 2
1 dwelling units from two or more residential rental property owners or
2 managers, provided that at least two such residential rental property
3 owners or managers are not wholly-owned subsidiaries of the same parent
4 entity or otherwise owned or managed by the same residential rental
5 property owner or manager;
6 (ii) analyzing or processing the information described in subparagraph
7 (i) of this paragraph using a system, software, or process that uses
8 computation, including by using that information to train an algorithm;
9 and
10 (iii) recommending rental prices, lease renewal terms, ideal occupancy
11 levels, or other lease terms and conditions to a residential rental
12 property owner or manager.
13 (d) "Residential rental property owner or manager" means any individ-
14 ual or entity that owns or is a beneficial owner of, directly or indi-
15 rectly, in whole or in part, or manages one or more residential rental
16 dwelling units in New York state.
17 2. It shall be an unlawful violation of this article for a person or
18 entity to knowingly or with reckless disregard facilitate an agreement
19 between or among two or more residential rental property owners or
20 managers to not compete with respect to residential rental dwelling
21 units, including by operating or licensing a software, data analytics
22 service, or algorithmic device that performs a coordinating function on
23 behalf of or between and among such residential rental property owners
24 or managers.
25 3. It shall be considered an unlawful agreement in violation of this
26 article for a residential rental property owner or manager to knowingly
27 or with reckless disregard set or adjust rental prices, lease renewal
28 terms, occupancy levels, or other lease terms and conditions in one or
29 more of their residential rental properties based on recommendations
30 from a software, data analytics service, or algorithmic device perform-
31 ing a coordinating function.
32 4. Nothing in this section shall impair or limit the applicability of
33 any other part of this article or any other state law.
34 § 2. This act shall take effect on the sixtieth day after it shall
35 have become a law.
