New Jersey Bans Rent-Setting Algorithms as Gov. Sherrill Signs FAIR Act Into Law

TRENTON — New Jersey has taken a new step to address housing affordability with the signing of legislation aimed at preventing the use of rent-setting algorithms that lawmakers say can contribute to rising rental costs.

Known as the Forbidding the Algorithmic Inflation of Rent (FAIR) Act, the new law prohibits certain software-driven pricing coordination practices that can influence rental prices across the housing market. Supporters of the legislation say the measure is designed to protect renters from technology-enabled practices that can reduce competition among landlords and drive up housing costs.

The bill, A3497, was sponsored by Assembly members Yvonne Lopez, Margie Donlon, Chigozie Onyema, and Katie Brennan.

Under the law, rental property owners and third-party coordinators will be prohibited from sharing sensitive market information or using algorithms to coordinate rent prices. Lawmakers said the legislation targets software platforms that use large amounts of rental market data to recommend pricing strategies that can lead to higher rents across multiple properties.

Assemblywoman Yvonne Lopez, Chair of the Assembly Housing Committee, said the increasing use of rent-setting algorithms has contributed to affordability challenges facing renters throughout the state.

“As these algorithms increase in popularity, they contribute to an increasingly unaffordable housing market, placing undue financial strain on renters and exacerbating the housing crisis in New Jersey,” Lopez said. “We cannot let New Jersey families fall prey to predatory practices – intentional or otherwise – enabled by technology. This bill is a vital tool in stopping corporations from using big data to hike up housing and rental costs.”

Housing affordability remains one of the most significant challenges facing New Jersey residents, with rising rents placing pressure on working families, seniors, and young adults seeking housing.

Assemblywoman Margie Donlon said addressing rental costs must remain a priority for state leaders.

“When we talk about affordability in New Jersey, housing and rental prices often take center stage and it’s important that we do all that we can to reduce the prices of rental properties,” Donlon said. “Preventing the use of coordinated pricing practices is an important step in those efforts, particularly as a way of ensuring a fair and competitive market here in New Jersey.”

Assemblyman Chigozie Onyema said the legislation is intended to ensure technology is not used in ways that disadvantage renters.

“New Jersey residents deserve a housing market that works for them, not against them,” Onyema said. “When technology is used to manipulate the market, it becomes even harder for our residents to find affordable housing. At a time when too many New Jerseyans are struggling, this bill is about putting people before profits.”

Assemblywoman Katie Brennan said algorithm-based rent-setting practices have become increasingly common among large property owners and management companies.

“We're in the middle of a housing crisis, and it's gotten worse because corporate landlords are using algorithms to jack up everyone's rent,” Brennan said. “This type of software recommends identical increases across different properties and neighborhoods, driving up rents and pricing people out of their communities. No one should have to bid against a machine designed to squeeze every last dollar out of them. The FAIR Act bans the use of rent-setting algorithms and gives renters a fair shot at an apartment they can afford.”

Supporters of the legislation say the FAIR Act is part of a broader effort to increase housing affordability and ensure that rental markets remain competitive as technology continues to play a larger role in property management and pricing decisions.

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