Key facts
- New Jersey has banned algorithmic rent pricing with the signing of the FAIR Act.
- The law targets software that pools landlord data to set prices, preventing coordinated rent increases.
- New Jersey is the fourth state to enact such restrictions, following New York, California, and Connecticut.
- The FAIR Act takes effect on July 1, 2027.
- The legislation was spurred by class-action lawsuits and antitrust investigations into companies like RealPage.
New Jersey Governor Mikie Sherrill has signed the Forbidding the Algorithmic Inflation of Rent (FAIR) Act into law, prohibiting the use of software that facilitates coordinated rent pricing among landlords. This move positions New Jersey as the fourth state to implement such regulations, joining New York, California, and Connecticut.
The FAIR Act specifically targets software that aggregates nonpublic, competitively sensitive data, such as rent levels and occupancy rates, from multiple property owners to recommend pricing. Proponents argue this prevents landlords from colluding to inflate rents artificially, thereby addressing a contributing factor to the state's housing crisis.
The legislation's impetus stems from a series of class-action lawsuits and antitrust investigations. Notably, RealPage, a prominent provider of such software, has faced legal challenges, including a lawsuit from the U.S. Justice Department and settlements with major landlords like Greystar. New Jersey's Attorney General Matthew Platkin also filed an antitrust suit against RealPage and several large landlords.
The law, which takes effect on July 1, 2027, provides landlords with approximately one year to comply. It does not impose rent caps or mandate price reductions but aims to ensure genuine competition in rental pricing. The state's attorney general will establish a portal for renters to report suspected violations.
This legislative action follows Governor Sherrill's recent signing of New Jersey's $60.7 billion fiscal 2027 budget, which included measures to enhance housing affordability, such as increased funding for homeownership programs and a new homelessness fund. Additionally, the administration has been working to streamline housing development through initiatives like the Housing Governing Council and the NJ HOMES program.