Lawmakers move to alleviate rent burdens tied to tech algorithms
A Senate committee advanced a bill Thursday that would offer protections to renters in the state, including stopping landlords from charging tenants higher rent based on software algorithms.
New Jersey is in the midst of a rent crisis, according to legislative sponsors. S451 would make determining rental prices by using profit-maximizing algorithms a violation of the New Jersey Antitrust Act. Some landlords use these algorithmic systems to fix rental prices to help them “outperform the market” by 2 to 5%.
The median rate for a three-bedroom apartment has increased by 35 percent from 2021 to 2024. A studio in urban locations, including Hoboken, has risen to 61 percent. These renters are considered “rent-burdened,” according to bill sponsors Senators Teresa Ruiz, a Newark Democrat, and Brian Stack, a Union City Democrat.
“It’s so important to address this matter because it’s pricing people out,” Stack said. “I know that Senator Ruiz has seen the same, and that’s why we came together to just stop this.”
Stack said that the takeaway is that landlords can rent however they’d like without using algorithmic tools to decide for them, keeping affordability in mind for renters.
While several testified in favor of the bill, New Jersey Realtors spoke in opposition.
“NJ Realtors is concerned about the unintended consequences the legislation might have on our members and is continuing to work with the bill sponsors to work out a resolution,” said Catherine Best, the organization’s director of government affairs.
Best says that the organization is concerned that the routine use of data required for everyday operations could unintentionally place real estate licensees in violation of the bill.
The Community and Urban Affairs Committee moved the bill on a 3-2 vote, along party lines. Senators Carmen Amato Jr., a Berkeley Township Republican, and Holly Schepisi, a River Vale Republican, voted against the bill.
Also Thursday, the committee unanimously passed S1759 and S1821. Both bills were sponsored by Senator Troy Singleton, the Palmyra Democrat who chairs the committee.
“These bills take meaningful steps to protect vulnerable tenants, crack down on unfair practices, and deliver direct tax relief to renters who are struggling to keep up. Making rent more affordable must be a central part of our broader housing strategy,” said Senate President Nick Scutari, who cosponsored S1759.
The bills would provide some relief to tenants whose rent exceeds 35% of their gross income, as well as increasing to 30% from 18% the amount of rental payments that are tax-deductible.
“Housing affordability is directly tied to economic stability,” said Singleton. “When families are forced to spend more than 35 percent of their income on rent, it impacts their ability to pay for food, healthcare, childcare, transportation, and savings. These proposals recognize that reality and offer targeted, responsible relief.”
This article is written by Brinda Patel, courtesy of theNJ State House News Service
