Jersey City landlords are going to have to set rent the old fashioned way.
The Jersey City Council voted unanimously on Wednesday to ban the use of AI-driven, rent-setting software by landlords.
The ordinance, introduced by Councilmember James Solomon, is the first of its kind in the Garden State.
The revised ordinance deems the usage of tools from rental software companies like RealPage or Yardi Systems as a code violation. Supporters of the ordinance argue that these tools enable landlords and property managers to artificially raise rents and limit availability.
Solomon, in a statement provided to The Post, called the move a “bold stand” against rent collusion.
“With the enactment of this pioneering legislation in the state, we are warning corporate landlords: utilizing software like RealPage to orchestrate rent increases is illegal — and now, tenants and the city can hold you accountable,” the statement declared.
According to Solomon, enforcement measures for code violations include residents having the right to sue landlords or file complaints with the city concerning the use of algorithm-based rent adjustments.
Detractors of the new ordinance say the measure fails to address the root of the problem — a lack of new housing supply. Others argue that the language of the bill is overly broad and could lead to unnecessary penalization for property owners, Gothamist reported.
Jersey City has a documented affordability problem. Rent prices in the city have increased by 50% since 2015, according to a 2024 report by the nonprofit Regional Plan Association. The city was the country’s third most expensive city to rent in April, according to Zumper, right after New York City and San Francisco.
Proponents of the new ordinance pin the problem, in part, on landlords’ use of AI-driven tools to raise rents.
These tools, according to the bill, aggregate local prices, supply levels, occupancy rates and lease details. The information allows landlords to boost profits by selecting the most financially advantageous rental prices, lease terms or occupancy levels for their buildings.
A 2022 ProPublica investigation found evidence of faster price increases in cities where RealPage’s YieldStar software was widely adopted by major property management firms.
The ordinance comes on the heels of a similar bill proposed in fall 2024, which is currently stalled in the state Legislature, Gothamist reported.
New Jersey Attorney General Matthew Platkin filed his own lawsuit in April against 10 of New Jersey’s largest landlords and RealPage over the alleged use of software that forced “tens of thousands” New Jersey residents to overpay for rent.
“The defendants in this case unlawfully lined their pockets at the expense of New Jersey renters who struggled to pay the increasingly unlivable price levels imposed by this cartel,” Platkin said in a press release.
RealPage and Yardi could not be reached for comment by press time.
