New Jersey Bans Software That Helps Landlords Raise Rents

New Jersey residents will see new limits on how landlords can set rents after Gov. Mikie Sherrill signed a law sponsored by two North Jersey senators on Monday.

Under the law — the Forbidding the Algorithmic Inflation of Rent (FAIR) Act — landlords can't use software that bases rents on algorithms.

The software had allowed major landlords to coordinate the rents in a certain area at once, giving tenants no place to go if they couldn't afford the increase — officials said —and potentially causing violations of antitrust laws.

The act was sponsored by Sen. Brian Stack of Hudson County and Senate Majority Leader M. Teresa Ruiz of Essex County.

Both the U.S. Justice Department and state of New Jersey have been investigating landlords who use the software, with the latter calling 10 corporate landlords in the state a "cartel" last year. READ MORE: 'Cartel' Of 10 Landlords Charge 'Unlivable' Rents, NJ Attorney General Says

A state consumer affairs official called the situation "corporate greed at its worst."

A spokesman for the State Attorney General's Office told Patch on Tuesday that the state is continuing with its 2025 lawsuit against RealPage software and 10 corporate landlords.

"The RealPage lawsuit is ongoing," said spokesman Michael Symons on Tuesday. "The court recently denied a motion to dismiss the case against all of the defendants, allowing most claims to move forward."

'Unlawful To Use An Algorithmic Device'

The new act says it's "unlawful to use an algorithmic device to influence the price and supply of residential rental units."

The bill also says it's a violation of the New Jersey Antitrust Act for a rental property owner or agent to contract with a business that coordinates agreements among rental property owners to restrict competition and increase housing costs.

“Companies that feed data into algorithms for landlords to collude and artificially inflate rents are violating our antitrust laws and squeezing tenants in the process,” said Stack, who represents a county that has some of the highest rents in the nation.

In fact, the towns of Hoboken and Jersey City have already passed ordinances banning use of the software.

“Housing is not a luxury," said Stack, who also serves as mayor of Union City. "It's a necessity, and prohibiting the use of this software by landlords to increase rents will help ensure the market remains fair."

Addresses The Affordability Crisis

Ruiz, a Democrat representing Essex and Hudson counties, said, “Unethical rent-setting algorithms used by landlords are undermining competition and driving up housing costs for New Jersey families who are already struggling to afford groceries, fuel, and child care.”

The law also requires the state Attorney General to establish a complaints portal for alleged violations on the Department of Law and Public Safety website.

The law will take effect next summer, or the first day of the twelfth month following its enactment.

“Housing affordability is one of the defining challenges facing New Jersey,” said Gov. Mikie Sherrill on Monday. “Landlords, who should be competing to provide the best price to renters, are instead colluding to drive prices up through so called ‘algorithmic pricing.’ That stops now."

“Rents in New Jersey are already far too high. But when landlords and tech companies conspire to artificially inflate rents, they make it even more difficult for hardworking New Jerseyans,” said Attorney General Jennifer Davenport. “We are proud to be leading the fight in court against algorithmic collusion."

Kevin Weller, a Jersey City renter whose tenant association filed a $400 million lawsuit against a corporate landlord, and who individually sued software company RealPage in 2023, cheered the passage of the law, but said that it was important for cities to enforce their rent stabilization laws as well.

He said rents have already been set with the help the software.

Under state law, each city can set rent stabilization laws governing how much landlords can increase the rent each year. The laws provide exceptions allowing landlords to raise the rent higher if certain obligations are met.

"Municipalities are part of how algorithmic pricing gets to operate in the first place," Weller said. "This kind of software should never have been able to set rents at a rent-controlled building. It could only do that because nobody was collecting the fines that would have made ignoring rent control expensive...A city that will not enforce its own laws hands landlords the room to run pricing software."

The state also has stabilization laws saying an increase can't be "unconscionable," or shock the conscience. The law leaves it up to tenants and landlords to make the case in court for why an increase is reasonable or unreasonable.

The state also has anti-eviction laws mandating that landlords of larger buildings must keep tenants in place, and renew their lease if the tenants pay the rent on time and stick to the other aspects of their agreements. Read more about the various state and local tenant protections in New Jersey in this story.

READ MORE: 'Cartel' Of 10 Landlords Charge 'Unlivable' Rents, NJ Attorney General Says