Gov. Sherrill signs bill restricting landlords’ use of rent-setting software

Gov. Mikie Sherrill signed legislation Monday restricting landlords’ use of algorithmic software to set rents, a move state officials say is part of a push to rein in housing costs.

The new law bars landlords from using software to analyze competitor’ pricing and vacancy data to set rent levels, a practice opponents argue has let landlords who would otherwise compete against each other effectively coordinate rent increases.

The law also prohibits landlords from sharing sensitive pricing data that feeds these algorithms, and bans price-fixing agreements between landlords.

Sherrill said New Jersey’s rent prices have gotten “out of control.”

“The problem is that these tools put competing landlords on the same team against renters,” Sherrill said before signing the bill in Newark. “Landlords can use these algorithms to coordinate prices, move in lockstep, and push rent higher and higher. It’s collusion by algorithm, and it’s illegal, and it stacks the deck against renters.”

The law, which passed the Legislature on June 30, will go into effect in July 2027. Some municipalities, like Hoboken and Jersey City, already have laws in place to bar landlords from using these programs to set rental prices.

Sherrill, a Democrat who took office in January, said the bill won’t “single-handedly fix our housing crisis” but made a claim that it will stop some of the “relentless price hikes” that are aggravating the housing market.

The new law comes about one year after the state Attorney General’s Office filed a lawsuit against RealPage, a software company that landlords have used to set rent prices, and nearly a dozen of the state’s largest landlords, arguing that they used the software to inflate rents in violation of antitrust and consumer protection laws.

A spokesman for RealPage did not immediately respond to a request for comment on the new law. The lawsuit against the company is ongoing.

Ana Maria Hill, the state director for 32BJ SEIU, the largest union of property service workers in the nation, said many of the union’s members struggle to keep up with rent increases and live close to where they work.

“The housing crisis wasn’t created by algorithms, but algorithms are contributing to it,” she said. “Today, we are saying no to them.”

Sherrill brushed off any concerns that the law could face legal battles, saying it was worded narrowly to avoid unintended consequences for real estate agents and other businesses not engaging in coordinated pricing. She said state officials learned “from some of the court cases in other states so that we could make this more resilient.”

“I think we’ve crafted this incredibly carefully to both fit within the legal system, as well as protect renters from collusion and wrongdoing,” she said.