Judge Pauses New York's Ban on Rent-Setting Algorithms

A federal judge in Manhattan on September 29 temporarily blocked a key part of New York's first-in-the-nation statewide ban on algorithmic rent-setting, handing property software company RealPage a win in its challenge to the law.

What the court decided

RealPage won a preliminary injunction from U.S. District Judge Valerie Caproni blocking Section 340-b(3) of the state's General Business Law, the provision that makes it unlawful for residential landlords to set rents based on recommendations from pricing software that performs a coordinating function, according to Law Commentary. The injunction means the state cannot enforce that provision against landlords while the case continues.

The judge also denied the state's motion to dismiss RealPage's lawsuit, Multifamily Dive reported. RealPage argues the law violates the First Amendment by restricting the communication of pricing recommendations. Caproni found that algorithm-based rent recommendations are a form of commercial speech, and that the provision may sweep too broadly because it covers software built on public data as well as competitors' private data. She described the decision as a close call and found RealPage only marginally likely to succeed.

A separate section of the law, aimed at companies that operate or license rent-coordination software, was not affected by the ruling. The office of Attorney General Letitia James has defended the statute as a legitimate antitrust measure.

Background

Gov. Kathy Hochul signed the law, S.7882, in October 2025, and it took effect in December 2025, according to Multifamily Dive. RealPage sued weeks later. The law grew out of years of allegations, first raised in a 2022 ProPublica investigation, that landlords using RealPage's software were effectively sharing confidential data to push rents higher. RealPage denies its software facilitates price-fixing.

The company reached a settlement with the U.S. Department of Justice in late 2025 that limits how it can use competitors' nonpublic rental data, and landlords in a national class action have agreed to settlements totaling more than $141 million, according to an analysis by law firm Patterson Belknap.

Local bans keep spreading

The New York ruling comes as cities continue to act on their own. Jersey City, Providence, Philadelphia, Minneapolis, San Francisco and Seattle have passed similar measures, according to Multifamily Dive. In Maryland, Rockville's mayor and council unanimously approved a ban this summer, making it the first city in the state to prohibit landlords from using rent-setting software that draws on nonpublic competitor data. The city said the same package limits certain payment-processing and administrative fees, expands relocation assistance and requires more transparency about mandatory fees. It takes effect January 1, 2027, as WTOP also reported.

What it means for renters

• New York tenants lose one enforcement tool for now. While the injunction stands, landlords in the state are not barred by that provision from using algorithmic rent recommendations. General antitrust law, which prohibits price-fixing agreements, still applies.
• Ask how your rent is set. You can ask a landlord or leasing office whether it uses revenue-management software. Answers can help you decide whether to push back on a renewal that seems out of line with nearby listings.
• Compare renewal offers with the market. Algorithmic pricing often shows up as renewal increases that do not match local conditions. Gather listings for similar units to support a counteroffer.
• Watch for class action notices. If you rented from a large management company in recent years, you may be eligible to file a claim in RealPage-related settlements. Read official notices carefully and avoid third parties that charge to file.

The case will continue in federal court, and the final outcome may influence how other states and cities write their own restrictions on rent-pricing software.