AI Frontier Institute

Establishes "Forbidding the Algorithmic Inflation of Rent (FAIR) Act."

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New Jersey Assembly Bill A3497 (First Reprint), known as the 'Forbidding the Algorithmic Inflation of Rent (FAIR) Act,' establishes new prohibitions on the use of algorithmic pricing software in the residential rental market, supplementing the existing New Jersey Antitrust Act (P.L.1970, c.73). The Legislature finds in Section 2 that New Jersey faces an affordable housing crisis, with median rent for three-bedroom apartments rising 35 percent from 2021 to 2024, and more than 50 percent of renters deemed 'rent burdened.' The bill identifies property management software that collects landlords' competitively sensitive information and uses algorithms to set or recommend rental prices as a mechanism for collusion. Section 3 defines key terms including 'algorithmic device,' 'coordinating function,' 'coordinator,' 'competitively sensitive information,' and 'parallel pricing coordination.' Notably, a 'coordinator' is defined as any person operating algorithmic revenue management software or an algorithmic device that performs a coordinating function for any rental property owner. Section 4 makes it unlawful under the New Jersey Antitrust Act for: rental property owners to use the services of a coordinator; coordinators to facilitate anticompetitive agreements among landlords; two or more persons to engage in or facilitate parallel pricing coordination; and any person to perform a coordinating function. Section 5 preserves the full enforcement mechanisms of the existing Antitrust Act. Section 6 prohibits municipalities from enacting conflicting ordinances. Section 7 requires the Attorney General to establish a public complaint portal on the Department of Law and Public Safety website. Section 8 authorizes the Attorney General to adopt implementing regulations. Section 9 sets an effective date of the first day of the twelfth month after enactment.

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