T
he Jersey City Council has voted unanimously to ban the use of AI-driven rent-setting software by landlords, making it a code violation in the city. This ordinance, introduced by Councilmember James Solomon, is the first of its kind in New Jersey and aims to prevent corporate landlords from artificially inflating rents and constraining supply.

    Solomon sees this move as a "bold stand" against rent collusion, stating that tenants and the city now have the tools to hold landlords accountable for using software like RealPage or Yardi Systems. Enforcement includes the ability for residents to sue landlords or submit complaints to the city over algorithmic rent-setting.

    Detractors argue that the measure fails to address the root of the problem – a lack of new housing supply – and that the language is overly broad, potentially leading to unnecessary penalization for property owners. However, proponents point to the city's documented affordability problem, with rent prices increasing by 50% since 2015.

    The ordinance targets AI-driven tools that aggregate local prices, supply levels, occupancy rates, and lease details to boost profits by selecting the most financially advantageous rental prices or terms. A 2022 investigation found evidence of faster price increases in cities where RealPage's YieldStar software was widely adopted.

    This move comes as New Jersey Attorney General Matthew Platkin filed a lawsuit against 10 large landlords and RealPage over alleged use of software that forced thousands of residents to overpay for rent.