Prohibits landlords from using, or contracting for the use of, algorithmic devices to set the amount of rent to charge a residential tenant; imposes additional disclosure requirements regarding a landlord's collection and use of a tenant's personal information.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10020
SPONSOR: Rosenthal L TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting 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 prohibits landlords from using algorithmic devices to
set the amount of rent to charge a residential tenant and prohibits them
from sharing sensitive personal data of tenants without their consent.
SUMMARY OF PROVISIONS:
Section one amends the general business law by adding a new section 344.
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 investi-
gation 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. This legislation also
protects renters' privacy by preventing landlords from sharing informa-
tion regarding their income, rental history, credit score Section 8
status and other personal information with third party software vendors
without the tenant's consent.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
Undetermined.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it becomes law.
STATE OF NEW YORK
________________________________________________________________________
10020
IN ASSEMBLY
May 1, 2024
___________
Introduced by M. of A. L. ROSENTHAL -- read once and referred to the
Committee on Housing
AN ACT to amend the general business law, in relation to prohibiting the
use of algorithmic pricing by a landlord for the purpose of determin-
ing 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
2 344 to read as follows:
3 § 344. Use of pricing algorithmic in setting rent amount prohibited.
4 1. For the purposes of this section, the following terms shall have the
5 following meanings:
6 (a) "Pricing algorithm" shall mean any computational process, includ-
7 ing a computational process derived from machine learning or other arti-
8 ficial intelligence techniques, that processes data to recommend or set
9 a price or commercial term that is in or affecting interstate or foreign
10 commerce.
11 (b) "Coordinator" shall mean any operator of a software or data
12 analytics service that performs a coordinating function for any land-
13 lord, including a landlord performing a coordinating function for such
14 landlord's own benefit.
15 (c) "Nonpublic competitor data":
16 (i) shall mean nonpublic data that is derived from or otherwise
17 provided by another person that competes in the same market as a person,
18 or a related market; and
19 (ii) does not include information distributed, reported, or otherwise
20 communicated in a way that does not reveal any underlying data from a
21 competitor, such as narrative industry reports, news reports, business
22 commentaries, or generalized industry survey results.
23 (d) "Nonpublic data" shall mean information that is not widely avail-
24 able or easily accessible to the public, including information about
25 actual rent prices, occupancy rates, lease start and end dates, and
26 similar data, regardless of whether such data is attributable to a
27 specific competitor or anonymized.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14977-02-4
A. 10020 2
1 2. (a) In setting the amount of rent to be charged to a tenant for the
2 occupancy of a residential premises, including determining any change in
3 the amount of rent to be charged for the renewed occupancy of a residen-
4 tial premises, a landlord shall not employ, use, or rely upon, or cause
5 another person to employ, use, or rely upon, an algorithmic pricing that
6 uses, incorporates, or was trained with nonpublic competitor data.
7 (b) A coordinator shall not facilitate an agreement among landlords to
8 not compete regarding the renting of residential premises.
9 3. (a) A landlord shall not share a tenant's personal data with any
10 third party without such tenant's written consent.
11 (b) A landlord shall disclose to each tenant:
12 (i) the categories of personal data processed by the landlord and by
13 any processor who processes personal data on behalf of such landlord;
14 (ii) the sources from which personal data is collected;
15 (iii) the purposes for processing personal data;
16 (iv) the landlord's retention period for each category of personal
17 data that such landlord processes or which is processed on such land-
18 lord's behalf, or if that is not possible, the criteria used to deter-
19 mine such retention period; and
20 (v) the identity of each third party to whom the landlord disclosed,
21 shared, transferred, or sold personal data, and for each identified
22 third party:
23 (A) the categories of personal data being shared, disclosed, trans-
24 ferred, or sold to the third party;
25 (B) the purposes for which personal data is being shared, disclosed,
26 transferred, or sold to the third party;
27 (C) the third party's retention period for each category of personal
28 data processed by such third party or processed on such third party's
29 behalf, or if that is not possible, the criteria used to determine such
30 retention period; and
31 (D) whether the third party uses the personal data for targeted adver-
32 tising.
33 4. In addition to any action brought by the attorney general under
34 this article, a tenant injured by a violation of this section may bring
35 an action to recover damages. A court may also award attorneys' fees to
36 a prevailing plaintiff tenant.
37 § 2. This act shall take effect on the ninetieth day after it shall
38 have become a law and shall apply to any rental agreement that is
39 executed on or after the effective date of this act.
