NEWARK, N.J. — New Jersey Governor Mikie Sherrill signed the FAIR Act (Forbidding the Algorithmic Inflation of Rent Act) on July 20 at Military Park in Newark. The law limits the use of algorithms and specialized software to determine residential rental prices. With its passage, New Jersey became the fourth U.S. state to regulate this practice.
Why was the law introduced?
In recent years, large landlords have increasingly relied on software that collects confidential market data, including rental prices, apartment vacancy rates, and other information, to recommend how much rent should be charged in order to maximize profits.
The concern arises when multiple large property owners use the same system. Instead of competing by offering lower rents, the software may recommend similar or higher rental prices based on shared market data. According to lawmakers, this practice can reduce market competition and contribute to rising housing costs.
“Landlords who should be competing to offer tenants the best prices are instead coordinating rent increases through so-called algorithmic pricing. That ends now,” Governor Sherrill said.
What does this mean for residents?
For renters, the new law provides greater protection against coordinated rent increases. Landlords can still raise rent, but they may no longer use algorithms that analyze confidential competitor data to coordinate pricing.
It is important to note that the law does not impose rent control and does not freeze rental prices. If housing demand remains high and the supply of available apartments stays limited, rents can still increase. The goal of the FAIR Act is to ensure that rental prices are driven by genuine market competition rather than software-generated recommendations that encourage coordinated pricing.
When does the law take effect?
The law will not take effect immediately. It is scheduled to become effective in the summer of 2027.
Will rents go down right away?
Probably not.
Housing experts say the FAIR Act alone is unlikely to solve New Jersey’s affordability challenges because the state’s biggest issue remains the shortage of available housing.
However, the law could help prevent artificial rent inflation driven by algorithmic pricing and make the rental market more transparent and competitive.
For many New Jersey renters, the FAIR Act represents an important step toward a fairer housing market. Still, long-term improvements in housing affordability will likely require building more housing units and increasing the overall supply of available homes.
Sources: NJ.gov, ROI-NJ, NJBIZ, Gothamist, The Jersey Vindicator