New Jersey enacts law against algorithmic rent hikes, effective 2027

New Jersey is set to become the fourth U.S. state to explicitly regulate algorithmic rent increases, following Governor Mikie Sherrill's signing of the FAIR Act on July 20. The legislation, officially known as the Anti-Algorithmic Rent Inflation Act, will take effect on July 1, 2027, and aims to curb the use of software that coordinates rental prices and lease terms.

The FAIR Act prohibits landlords from using these tools to coordinate pricing or occupancy levels, as stated in a release from the governor's office. The core objective is to prevent artificial rent hikes and foster a more competitive housing market. Governor Sherrill emphasized that landlords should compete on price, but noted that some employ "algorithmic price fixing" to inflate values. She positioned the law as a key measure in her administration's strategy to lower housing costs.

Concerns over such platforms have surfaced nationwide, with fears that they enable landlords to collude on rent increases, potentially driving up prices in already tight markets. Assemblywoman Katie Brennan, a sponsor of the bill, highlighted how some programs recommend identical increases across different neighborhoods. She argued that individuals should not have to "compete against a machine" designed solely to maximize profit.

The legislation establishes clear channels for tenants to identify and contest illegal algorithmic practices. Affected individuals can report potential violations and seek redress. Ana Maria Hill, vice president of 32BJ SEIU, stated that the law will empower families to combat illicit rent hikes. Her organization plans to collaborate with tenants and the Attorney General's office to identify non-compliance. Attorney General Jennifer Davenport confirmed her office's involvement in legal actions against algorithmic collusion between property owners and tech companies.