a) Legislative Findings

i) The Legislature finds all of the following:

1) [State] is in the midst of an affordable housing crisis, with data showing that more than [percentage of renters in State] are housing cost burdened.

2) Recently, algorithmic pricing software has disrupted rental housing markets in cities nationwide. Such software has led to double-digit rent increases, higher vacancy rates, and more evictions, distorting markets by causing both rents and vacancy rates to rise simultaneously.

3) The use of such algorithmic products has been the subject of national lawsuits that allege such products pose a heightened risk of anticompetitive conduct, price fixing, and collusion, all of which allegedly result in higher rents for residential tenants.

4) A fair market is a critical American principle that ensures a thriving economy and a fair housing market supports landlords and renters alike.

ii) Therefore, the Legislature declares that any form of anticompetitive price fixing in the housing market is a violation of the [State’s unfair or deceptive trade practices law] and constitutes an unfair method of competition. As such, the State’s Attorney General, District Attorneys, and City Attorneys have the obligation to pursue such unfair and anticompetitive practices.

b) Prohibition on the Use of Algorithmic Devices or Products for the Purpose of Setting Rent

i) The  use of an algorithmic device in setting the amount of rent to be charged to a tenant for the occupancy of a residential premises, including determining any change in the amount of rent to be charged for the renewed occupancy of a residential premises, shall be prohibited as an unfair or deceptive trade practice, as described in [State Deceptive Trade Practices Law]. 

ii) A rental property owner, or any agent, representative, or subcontractor thereof,shall not employ, use, or rely upon, or cause another person to employ, use, or rely upon, a pricing algorithm for residential rent that uses, incorporates, or was trained with nonpublic competitor data;

1) Such practices shall be considered a restraint of trade if such a product is distributed to two or more persons with the intent that the pricing algorithm be used to set or recommend a price in the same market or a related market.,

2) A rental property owner who did not cause the employment, use, or reliance upon of a pricing algorithm shall not be liable under this act for their agent, representative, or subcontractor meeting the requirements of Section ii).

iii) For purposes of this Section:

1) Algorithmic device” means a device commonly known as revenue management software that uses one or more algorithms to perform calculations of non-public competitor data concerning local or statewide rents for the purpose of advising a landlord on the amount of rent that the landlord may obtain for that unit. “Algorithmic device” includes a product that incorporates an algorithmic device, but does not include:

(a) A report that publishes existing rental data in an aggregated manner but does not recommend rents for future leases; or

(b) A product used for the purpose of establishing rent or income limits in accordance with the affordable housing program guidelines of a local government, the state, the federal government, or other political subdivision.

2) “Non-public competitor data” means information that is not available to the general public, including information about actual rent prices, occupancy rates, lease state and end dates, and similar data, regardless of whether the information is attributable to a specific competitor or anonymized, and regardless of whether it is derived from or otherwise provided by another person that competes in the same  market or a related market.

3) “Rent” means the total amount of rent, including concessions and fees, that a residential tenant is required to pay pursuant to a rental agreement.

iv) Enforcement

1) The [State Housing Agency and Department of Consumer Protection] shall investigate alleged violations of this Section. The [State Housing Agency and State and local Departments of Consumer Protection] may refer the matters resulting from such investigations to the [State Attorney’s General Office] or may bring an administrative action against the rental property owner, or any agent, representative, or subcontractor thereof.

2) The Attorney General or the District Attorneys or City Attorney in the jurisdiction in which the rental unit is located may also investigate and shall enforce this Section by filing a civil  action in the name of the State, county, or city or as parens patriae on behalf of persons residing in the state, including seeking an injunction to enjoin a violation of this Section.

3) For enforcement of this Section by the Attorney General, District Attorney, or City Attorney, a violation of this Section is an unfair, abusive, or deceptive trade practice within the meaning of [existing law on deceptive trade practices] and subject to the enforcement and penalty provisions contained in [existing state law on enforcement of violations of existing deceptive trade practices law]. 

4) The Attorney General, District Attorney, or City Attorney may additionally seek remedies for persons aggrieved by the violation, including injunctive relief and such other equitable relief, as appropriate, and damages in either the amount of the aggrieved individuals actual damages or in the alternative, if the Attorney General, District Attorney, or City Attorney elects before judgment is rendered, statutory damages of $1,000 per violation.

5) The Attorney General, District Attorney, or City Attorney may be awarded reasonable attorney’s fees and costs if the Attorney General, District Attorney, or City Attorney is the prevailing party in such an action.

6) Private Right of Action

(a) An aggrieved tenant may file a civil action for violations of this Section, for injunctive relief, money damages, or civil penalties of up to $1,000 per violation, or any combination of those remedies. The court shall award reasonable attorney’s fees and costs to the tenant if the tenant is the prevailing party in such a civil action. A lease provision that limits a prevailing tenant from obtaining attorney’s fees shall not be enforceable against a tenant’s claim for attorney’s fees that arises under this subsection.

7) When calculating violations, each prohibited action under this Section is counted as a separate violation for every month it occurs or continues. Additionally, violations are counted separately for each affected residential rental unit in the State, meaning each unit for which prohibited conduct directly influences the price or terms on which it is advertised, offered, rented, or leased.

c) Update State Deceptive Trade Practices Law

i) [Existing State law on deceptive trade practices] A person engages in a deceptive trade practice when, in the course of the person’s business, vocation, or occupation, the person:

1) Violates Section a)i)-iii) concerning the use of an algorithmic device to determine the amount of rent to charge a tenant for the occupancy of a residential premises.

d) Algorithmic Tenant Screening Tools

i) The  use of an algorithmic tenant screening tool to provide a binding decision  on whether to approve or deny a tenant’s rental application for a residential premises is prohibited.

ii) A rental property owner, or any agent, representative, or subcontractor thereof, landlord or property manager shall not employ, use, or rely upon, or cause another person to employ, use, or rely upon,  an algorithmic tenant screening tool to provide a binding decision on whether to approve or deny a tenant’s rental application for a residential premises.

1) A rental property owner, or any agent, representative, or subcontractor thereof may use a algorithmic tenant screening tools as part of their tenant screening process, allowing a rental property owner, or any agent, representative, or subcontractor thereof, to consider the score or ranking an algorithmic tenant screening tool provides an applicant. The algorithmic tenant screening tool’s score or ranking must only be a single, not sole, factor in the rental property owner’s, or any agent, representative, or subcontractor thereof’s, consideration of application for tenancy. 

iii) Nothing in this section shall prohibit a rental property owner’s, or any agent representative, or subcontractor thereof’s,’s use of credit report information as allowed under [relevant State law], the Fair Housing Act, and the Fair Credit Reporting Act.

iv) A tenant applicant may request the results of an algorithmic tenant screening tool utilized by a rental property owner, or any agent, representative, or subcontractor thereof, to assess their application. A rental property owner, or any agent, representative, or subcontractor thereof, must provide a tenant applicant with the results of an algorithmic tenant screening tools analysis, and other screening tools employed, of that tenant upon such a request.

v) For purposes of this section:

1) “Algorithmic tenant screening tool” means a software program that uses one or more algorithms to analyze data about potential tenants’ background, including but not limited to nonpublic data such as credit reports, criminal history, employment verification, among other information to generate a score or ranking for a specific applicant. An ‘algorithmic tenant screening tool” may further recommend whether tenants’ applications should be denied or approved.

vi) Enforcement

1) The [State Housing Agency and Department of Consumer Protection] shall investigate alleged violations of this Section. The [State Housing Agency and State and local Departments of Consumer Protection] may refer the matters resulting from such investigations to the [State Attorney’s General Office] or may bring an administrative action against the rental property owner, or any agent, representative, or subcontractor thereof.

2) The Attorney General or the District Attorney, or City Attorney in the jurisdiction in which the rental unit is located may also investigate and shall enforce this Section by filing a civil action in the name of the State, county, or city or as parens patriae on behalf of persons residing in the state, including seeking an injunction to enjoin a violation of this Section.

3) The Attorney General, District Attorney, or City Attorney may file an action in any court of competent jurisdiction against any person or persons alleged to have violated this Section, seeking relief under this Section, including remedies for persons aggrieved by the violation.

4) Remedies. In any action filed pursuant to this Section, a court may order the following:

(a) Injunctive relief and such other equitable relief, as appropriate.

(b) Damages.

(c) The Attorney General, District Attorney, or City Attorney when seeking remedies for persons aggrieved by the violation, damages in either the amount of the aggrieved individuals actual damages or in the alternative, if the Attorney General, District Attorney, or City Attorney elects before judgment is rendered, statutory damages of $1,000 per violation.

5) The Attorney General, District Attorney, or City Attorney may be awarded reasonable attorney’s fees and costs if the Attorney General, District Attorney, or City Attorney is the prevailing party in such an action.

6) When calculating violations, each prohibited action under this Section is counted as a separate violation for every month it occurs or continues. Additionally, violations are counted separately for each affected residential rental unit in the State, meaning each unit for which prohibit conduct directly influences the price or terms on which it is advertised, offered, rented, or leased.

e) SEVERABILITY: The provisions of this Act are severable. If any provision of this Act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.