New York Governor Kathy Hochul has signed into law the nation’s first statewide ban on AI-enabled rent price-fixing, prohibiting landlords from using algorithmic pricing software to coordinate rental rates. The law makes New York the first state to issue a full statewide ban on algorithmic rent pricing, following earlier city-level restrictions in Jersey City, Philadelphia, San Francisco, and Seattle.

The new legislation bans the use of price-fixing software by landlords to set rental terms or lease renewals. It explicitly classifies landlords who use shared or connected AI algorithms for pricing as engaging in collusive behavior, even if done “unknowingly or with reckless disregard.”

This means that two or more property owners who rely on the same algorithm to determine rent are, under the law, no longer competing in a free market. The statute treats this as a form of algorithmic collusion, aligning digital coordination with traditional antitrust violations.

Governor Hochul said the measure targets “private data algorithms” that contribute to housing market distortion and harm renters during an ongoing affordability crisis, according to her official press release.

RealPage, one of the leading software providers in this space, offers landlords machine learning algorithms designed to optimize rental pricing, unit occupancy, and lease duration. The company claims the tools help achieve the “overall highest yield, or combination of rent and occupancy, at each property.”

However, critics and regulators argue that such algorithms allow landlords to make pricing decisions informed by shared, nonpublic data, effectively coordinating without explicit communication. A 2022 ProPublica investigation found that RealPage’s algorithms were linked to rent increases across the country, attributing this to the soaring rental prices. Two years later, the U.S. Department of Justice filed an antitrust lawsuit against RealPage.

According to the governor’s office, the use of these AI-enabled pricing models has cost U.S. tenants around $3.8 billion in 2024.

Pat Garofalo, director of state and local policy at the American Economic Liberties Project, praised the bill, calling it vital protection against “algorithmic price collusion.”

State Senator Brad Hoylman-Sigal, one of the bill’s sponsors, said the legislation “will update our antitrust laws to make clear that rent price-fixing via artificial intelligence is against the law.” He added that the measure strengthens New York’s antitrust laws, aligning them with federal efforts to curb anti-competitive AI practices and price-fixing behaviors identified as harmful to consumers.

The law is the first to explicitly categorize AI algorithms as potential collusion agents, creating a framework that could influence regulation in other sectors where automated pricing is common—such as airlines, ride-sharing, and e-commerce.

Legal experts say New York’s legislation signals a growing recognition that AI systems can act as economic intermediaries, coordinating outcomes that violate antitrust principles even without human intent.

Q1: What does the new law ban?
A: It bans landlords from using AI or algorithmic software to determine or coordinate rental prices, classifying it as price collusion under state law.

Q2: Why is this considered AI regulation?
A: Because it targets automated decision-making systems that affect market prices—explicitly regulating AI behavior rather than human conduct.

Q3: Which companies are affected?
A: Providers such as RealPage, and any property management software offering rent optimization algorithms, fall under the ban.

Q4: How much has AI-driven pricing cost renters?
A: According to Governor Hochul, the use of these algorithms cost U.S. tenants roughly $3.8 billion in 2024.

Q5: When does the law take effect?
A: The ban becomes enforceable 60 days after signing.

The New York ban sets a historic precedent in AI governance, marking the first time a state has directly equated algorithmic coordination with traditional price-fixing under antitrust law.

For policymakers, it’s a signal that AI regulation is no longer limited to data privacy or generative content—it now extends into economic fairness and market integrity. For AI developers, it raises critical questions about liability, transparency, and responsible design in automated systems that influence human markets.

If replicated nationally, laws like New York’s could reshape the way AI is used in pricing, logistics, and supply chain optimization, forcing companies to ensure that their AI algorithms operate competitively and ethically.

This moment represents a turning point where AI accountability meets economic regulation—and where software behavior is legally indistinguishable from human intent in the eyes of the law.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant used for research and drafting. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.