Legislators at the federal and state levels continue efforts to protect renters from perceived concerns with algorithm-based revenue management tools and more broadly regulate artificial intelligence (AI)-driven technology, putting more compliance burdens on the housing industry.
Federal Updates
Preventing Algorithmic Facilitation of Rental Housing Cartels Act
On May 30, Representatives Becca Balint (D-Vt.) and Jesús “Chuy” García (D-Ill.-04) introduced the House companion bill to Senator Ron Wyden’s (D-Ore.) Preventing Algorithmic Facilitation of Rental Housing Cartels Act (S.3692). Wyden’s bill, which currently has been referred to the Senate Committee on the Judiciary, seeks to regulate the application of algorithms in the rental housing market.
The new house bill, like its Senate companion, would make it unlawful for housing providers to coordinate pricing, supply levels, or contractual details through an algorithm. In addition, any facilitations or mergers between two or more property owners that may reduce competition would be prohibited and violate anti-trust laws. This bill also invalidates any pre-dispute joint action waivers in its enforcement.
Preventing Algorithmic Collusion Act of 2024
Earlier this year, Senator Klobuchar (D-Minn.) also introduced legislation related to the use of algorithms in rental housing. Her bill, the Preventing Algorithmic Collusion Act of 2024, was introduced in January and has been referred to the Committee on the Judiciary. This legislation prevents the use or distribution of any pricing algorithm that interacts with nonpublic competitor data to determine rental prices. The bill also establishes anti-trust audits, enforces penalties for violations and requires a study from the Federal Trade Commission to assess the impact of pricing algorithms.
State Updates
Colorado Senate Bill (SB 24-205) was signed into law by Governor Polis in May 2024 and represents the first state law aimed at regulating the potential discriminatory effects of algorithms. It includes specific provisions for developers and "deployer[s] of the high-risk system" to avoid algorithmic discrimination in their systems. This bill will have a significant influence on housing providers, particularly in areas such as revenue management, resident screening and other operational systems that utilize algorithms.
Two Rhode Island bills, House Bill 7304 and Senate Bill 2892, represent a growing trend in algorithmic prohibitions. These bills would prohibit the use of algorithms and digital technologies in residential rent-setting. They would enforce anti-trust law violations for any housing provider found to be reducing competition through algorithmic systems. Both bills have been recommended for further study by the respective committees of jurisdiction.
Several other states had proposed taking action on algorithmic systems in rental housing but were not successful in moving proposed legislation forward in their respective legislative sessions. Colorado bill (HB 24-1057), which attempted to prohibit housing providers from using algorithmic services for revenue management purposes, failed to achieve final passage.
New Hampshire bill (HB 1368) aimed to deter the use of revenue management systems by invalidating any eviction filings based on failure to pay rent. Specifically, the bill targets filings where revenue management software was used to set a rent increase. The bill was declared “Inexpedient to Legislate,” ensuring it would not advance through the legislative process.
Another state-level approach that has failed to pass thus far is California bill AB 2930, which would have prohibited certain practices that could have resulted in reduced competition in the rental housing market. However, the second hearing for this bill has been canceled at the request of the author.
The National Apartment Association’s (NAA) Outlook
In an election year, the growing trends in legislation regulating AI-based tech at both federal and state levels highlight the significance of this matter to voters, and the potential impacts on housing providers.
NAA continues its federal advocacy to educate members of Congress and regulators on the legitimate business reasons for using algorithm-based or AI technology throughout the leasing process and tenancy. These tools offer benefits to housing providers and residents alike, driving optimization and modernization of historic practices forward and maximizing operational efficiency. These efficiencies directly benefit residents and rental communities.
NAA thanks its affiliate partners for their tireless advocacy efforts to protect the industry from overregulation. NAA continues its work to support its affiliates’ state and local advocacy through research, insights and advocacy campaign grants through NAA’s Housing Affordability Program.
For more information on AI-related housing policy, contact Joe Riter, NAA’s Senior Manager of Public Policy.