Bill Text: NJ A4916 | 2024-2025 | Regular Session | Introduced
Bill Title: Prohibits use and sale of algorithmic devices for setting rent price or occupancy of residential dwelling units.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-10-17 - Introduced, Referred to Assembly Housing Committee [A4916 Detail]
Download: New_Jersey-2024-A4916-Introduced.html
Sponsored by:
Assemblywoman LUANNE M. PETERPAUL
District 11 (Monmouth)
Assemblywoman MARGIE DONLON, M.D.
District 11 (Monmouth)
SYNOPSIS
Prohibits use and sale of algorithmic devices for setting rent price or occupancy of residential dwelling units.
CURRENT VERSION OF TEXT
As introduced.
An Act prohibiting use and sale of algorithmic devices for setting rent price or occupancy of residential dwelling units and supplementing and amending P.L.1970, c.73.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) a. It shall be unlawful to sell, license, or otherwise provide to a landlord an algorithmic device that sets, recommends, or advises on rents or occupancy rates that may be achieved for residential dwelling units in the State.
b. It shall be unlawful for a landlord to use an algorithmic device when setting rents or occupancy rates for residential dwelling units in the State. Each separate month that a violation exists or continues, and each separate residential dwelling unit for which the landlord uses an algorithmic device, shall constitute a separate and distinct violation.
c. In addition to the penalties established pursuant to section 7 of P.L.1970, c.73 (C.56:9-7), the Attorney General may file a civil action for a violation of subsection a. or b. of this section, or both, for damages, injunctive relief, restitution or return of illegal profits, civil penalties of up to $1000 per violation, or some combination of these penalties. The court shall award reasonable attorney's fees and costs to the Attorney General if the Attorney General is the prevailing party in such a civil action.
2. Section 2 of P.L.1970, c.73 (C.56:9-2) is amended to read as follows:
a. As used in this act, unless the context otherwise requires "person" shall mean any natural person or persons, or any corporation, partnership, company, trust or association of persons.
b. "Trade or commerce" shall include all economic activity involving or relating to any commodity or service.
c. "Commodity" shall mean any kind of real or personal property.
d. "Service" shall mean any activity which is performed in whole or in part for the purpose of financial gain, including but not limited to sale, rental, leasing or licensing for use.
e. "Algorithmic device" shall mean a device, such as a software program, that uses one or more algorithms to perform calculations of non-public competitor data concerning local, statewide, or regional rents or occupancy rates, for the purpose of advising a landlord whether to leave a unit vacant or on the amount of rent that the landlord requires from a tenant. "Algorithmic device" shall include a product or service that incorporates an algorithmic device, but does not include: (1) any report published by a trade association that receives renter data and publishes it in an aggregated and anonymous manner; or (2) a product used for the purpose of establishing rent or income limits in accordance with the affordable housing program guidelines of a government entity.
f. "Non-public competitor data" shall mean information that is not available to the general public, including information about actual rent prices, occupancy rates, lease start and end dates, and other related data, regardless of whether the information is attributable to a specific competitor or anonymized, or whether it is derived from, or otherwise provided by, another person that competes in the same market or a related market.
(cf: P.L.1970, c.73, s.2)
3. This act shall take effect on the first day of the second month next following enactment.
STATEMENT
This bill prohibits the use and sale of algorithmic devices for setting rent price or occupancy of residential dwelling units.
In recent years, a number of new software programs, often referred to as "algorithmic devices," have threatened to destabilize rental housing markets in cities nationwide, including in New Jersey. These programs enable landlords to indirectly coordinate with one another through the sharing of non-public competitively sensitive data in order to artificially inflate rents and vacancy rates for rental housing. Participating landlords provide vast amounts of proprietary data to the programs, which in turn set or provide recommendations for rent and occupancy rates. More and more landlords in the United States now pool their data and pricing decisions using such software. This software has contributed to double-digit rent increases, higher vacancy rates, and higher rates of eviction, and has distorted markets so that rents and vacancy rates have increased in tandem.
Often used by large corporate landlords, the software fuels the consolidation of corporate and private equity ownership of rental housing, at the expense of landlords large and small who compete in the market without use of this software. Landlords using these tools are not appropriately engaging in the market and the companies developing and selling these tools to landlords are contributing to these problems. Numerous antitrust lawsuits have been filed against certain of these companies, including RealPage, Inc. and Yardi Systems, Inc. The lawsuits allege that these companies are enabling and participating in a scheme of unlawful price fixing. These include lawsuits filed by the District of Columbia Attorney General and the Arizona Attorney General and more than 20 federal private class action lawsuits nationwide that have been consolidated in the federal court in the Middle District of Tennessee.
This bill does not restrict the development, sale, or use of software to help landlords manage units based on internal data or with use of publically available data. Nor does it regulate the amount of rent that a landlord may charge.
This bill prohibits the sale, license, and use of an algorithmic device that sets, recommends, or advises on rents or occupancy rates that may be achieved for residential dwelling units in the State. The bill provides that the Attorney General may file a civil action for a violation for damages, injunctive relief, restitution or return of illegal profits, civil penalties of up to $1000 per violation, or some combination. A court is required to award reasonable attorney's fees and costs to the Attorney General if the Attorney General is the prevailing party in such a civil action. The bill defines "algorithmic devices" and "non-public competitor data" for the purposes of the "New Jersey Antitrust Act."
