Legislature sends FAIR Act to Gov. Sherrill, advancing ban on algorithmic rent-setting software

Supporters say bill would curb anti-competitive rent-setting practices that drive up housing costs

The New Jersey Assembly approved the FAIR Act on Tuesday, a measure that would prohibit landlords from using algorithmic rent-setting software to coordinate rental prices, sending the legislation to Gov. Mikie Sherrill for her consideration.

The legislation, A3497/S451, known as the Forbidding the Algorithmic Inflation of Rent (FAIR) Act, cleared the Senate on June 18. If signed into law, the measure would prohibit landlords and third-party software companies from using nonpublic competitor information to coordinate rental pricing, a practice supporters say has contributed to rising rents and reduced competition in the housing market.

The bill would also require the attorney general to establish an online system for renters to report suspected violations.

Targeting algorithmic pricing

The legislation is aimed at companies that market rent-setting software to landlords. Those platforms analyze large amounts of proprietary rental data to recommend prices and occupancy strategies.

Supporters argue the software allows landlords to effectively coordinate rent increases without directly communicating, undermining competition and making housing less affordable.

“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,” said Assemblywoman Yvonne Lopez, D-Middlesex, chair of the Assembly Housing Committee. “We cannot let New Jersey families fall prey to predatory practices — intentional or otherwise — enabled by technology. This bill would be a vital tool in stopping corporations from using big data to hike up housing and rental costs.”

The legislation cites rental housing industry data showing median rent for a three-bedroom apartment in New Jersey increased 35% between 2021 and 2024, while the median rent for a studio apartment in Hoboken increased 61% over the same period.

“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,” said Assemblywoman Margie Donlon, D-Monmouth. “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, D-Essex and Union, said the bill is intended to ensure technology is not used to manipulate the rental market.

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

Background

The legislation follows a growing national debate over algorithmic rent-setting software, including ongoing antitrust lawsuits brought by the U.S. Department of Justice and several states against software provider RealPage. Critics contend the software enables landlords to coordinate rents in ways that reduce competition, while the company has denied those allegations.

As previously reported by Dylan Jovanovic for The Jersey Vindicator, housing advocates say New Jersey’s severe housing shortage remains the primary driver of high rents. They argue the FAIR Act is intended to restore competition to the rental market and may help slow rent increases, but that it is not a substitute for building substantially more housing.

The state currently faces a shortage of more than 200,000 homes affordable to extremely low-income households, according to the Fair Share Housing Center.

Housing advocates applaud passage

The Fair Share Housing Center, one of the bill’s strongest supporters, called the legislation an important step toward protecting renters.

“This is not only an issue of fairness and transparency — it’s a civil rights issue,” said Al-Tariq Witcher, managing director of external affairs at the Fair Share Housing Center. “Algorithmic rent-setting software can reinforce longstanding housing inequities and make it even harder for historically marginalized communities to access affordable homes. When landlords use these tools to coordinate rent increases, it doesn’t just distort the market — it puts stable housing even further out of reach for working families. We’re grateful to the sponsors and both houses for passing this legislation and urge Governor Sherrill to quickly sign it into law.”

Advocates seek additional housing reforms

The housing organization also renewed calls for lawmakers to continue pursuing affordability measures beyond the FAIR Act.

They called on legislators to support A3481, which would increase eviction-filing fees to discourage frivolous eviction actions and create a dedicated funding source for homelessness prevention services. The Assembly approved that measure Monday, but it still awaits Senate action.

The group also praised portions of the newly approved state budget, including dedicated funding for the First-Time and First-Generation Homeownership Program, which will increase from $40 million to $45 million annually, and a new $35 million homelessness fund.

Fair Share Housing criticized lawmakers for leaving much of the Affordable Housing Trust Fund unavailable for new affordable housing development. According to the group, only about $36 million is expected to be available for affordable housing production in fiscal year 2027, despite the trust fund typically receiving well over $100 million annually from a dedicated portion of the state’s realty transfer fee.

“New Jersey’s progress on affordable housing must be matched with appropriate investment,” Witcher said. “New Jersey should not be forced to choose between helping families afford housing today and building the homes that will make housing more affordable tomorrow.”

The organization also urged lawmakers to approve legislation later this year to encourage redevelopment of underutilized office parks and commercial properties into mixed-use communities with affordable housing and to make it easier for faith-based organizations and nonprofit institutions to develop affordable homes on their properties.

“New Jersey’s new affordable housing law has created a framework for producing more homes than ever before, but we need the Affordable Housing Trust Fund to maximize its impact,” Witcher said. “The vast majority of New Jersey’s municipalities have stepped up the plate and enacted plans to create their fair share of affordable homes. But the work is far from finished. We look forward to working with Governor Sherrill and legislative leaders to fully fund affordable housing production and advance the reforms needed to ensure every New Jersey family has access to a safe, stable home.”