Bill Text: NJ A4872 | 2024-2025 | Regular Session | Amended
Bill Title: Prohibits certain coordination among residential rental property owners who restrict competition with respect to residential dwelling units.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced) 2024-10-24 - Reported out of Asm. Comm. with Amendments, and Referred to Assembly Appropriations Committee [A4872 Detail]
Download: New_Jersey-2024-A4872-Amended.html
ASSEMBLY, No. 4872
STATE OF NEW JERSEY
221st LEGISLATURE
INTRODUCED SEPTEMBER 26, 2024
Sponsored by:
Assemblywoman YVONNE LOPEZ
District 19 (Middlesex)
Assemblyman BENJIE E. WIMBERLY
District 35 (Bergen and Passaic)
SYNOPSIS
Prohibits certain coordination among residential rental property owners who restrict competition with respect to residential dwelling units.
CURRENT VERSION OF TEXT
As reported by the Assembly Housing Committee on October 24, 2024, with amendments.
An Act concerning 1certain coordination in residential1 rental property pricing and supplementing P.L.1970, c.73 (C.56:9-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares that:
a. New Jersey is in the midst of an affordable housing crisis, as demonstrated by rental housing industry data showing median rent for a three-bedroom apartment increasing by 35 percent in the State from 2021 through 2024 and a studio in a more urban environment such as Hoboken increasing by 61 percent in the same timeframe.
b. Data from the United States Census Bureau indicates that over 50 percent of renters in New Jersey are deemed "rent burdened," which means an individual spends more than 30 percent of income on rent.
c. Recent national data indicates that landlords of residential rental housing use property management software to collude and raise residential rental housing prices, which may have contributed to recent increases in the State.
d. Landlords engaging with the software supply real-time prices and additional lease information to companies managing the software, who proceed to use algorithms to fix rental prices. As a result, competition decreases and typically rental prices increase.
e. A leading property management software company in the United States hinted at the outcome of using its software by stating on its website that it enables landlords to "outperform the market" by two to five percent, with a company executive publicly stating that the software could be responsible for rent increases of up to 14.5 percent.
f. New Jersey recognizes housing as a basic human need and endeavors to expand access to affordable housing.
2. As used in this act:
"Consciously parallel pricing coordination" means a tacit 1or express1 agreement between two or more rental property owners 1that are not related by a business agreement or contract1 to raise, lower, change, maintain, or manipulate pricing for the purchase or sale of reasonably interchangeable products or services 1unless required to do so in accordance with a rental cost restriction program. Actions of a rental property owner related exclusively to multiple properties controlled by the same property owner shall not be considered consciously parallel pricing coordination1.
"Coordinating function" means 1between two or more property owners1:
(1) collecting 1[historical or contemporaneous prices, supply levels, or lease or rental contract termination and renewal dates of residential dwelling units from two or more rental property owners] nonpublic information1;
(2) analyzing or processing 1[of the information described in paragraph (1) of this definition] nonpublic information1 through use of a system, software, 1algorithm,1 or 1other automated1 process 1[that uses computation, including by using the information to train an algorithm]1; and
(3) recommending rental prices, lease renewal terms, or ideal occupancy levels to a rental property owner.
"Coordinator" means any 1[person who operates a]1 software 1[or] ,1 data analytics service 1, or entity1 that performs a coordinating function for any rental property owner 1[, including a rental property owner performing a coordinating function for their own benefit. "Person" means, unless the context otherwise requires, any natural person or persons, or any corporation, partnership, company, trust, or association of persons] . "Coordinator" shall not include a software, data analytics service, or entity that: (1) generates or uses any report that provides rental data in an aggregated manner and does not recommend rent prices, fees, occupancy rates, or other rental contract terms for future leases; or (2) provides or uses rental data for the purpose of conducting research, statistics, testing, or training for software development. "Coordinator" shall not include a government entity that sets or limits rents or sale prices in accordance with a rental price restriction program.
"Nonpublic information" means information including but not limited to prices, supply levels, security deposits, ideal occupancy levels, lease contract termination, renewal dates of residential dwelling units or any other material lease terms from two or more rental property owners that is less than 365 days old and is not available for use or purchase by the public.
"Rental price restriction program" means a program established to restrict rent on persons of limited means, including but not limited to, the federal Housing Choice Voucher (Section 8) Program, P.L.2004, c.140 (C.52:27D-287.1 et al.), the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), any program administered by the New Jersey Housing and Mortgage Finance Agency, a rent control or rent levelling ordinance, or any other program established to limit rent identified in the rules and regulations adopted pursuant to section 7 or P.L. , c. (C. ) (pending before the Legislature as this bill)1.
"Residential dwelling unit" means any house, apartment, accessory unit, or other unit intended to be used as a primary residence in the State. "Residential dwelling unit" shall not include inpatient medical care, licensed long-term care, or detention or correctional facilities.
3. It shall be unlawful and a violation of the "New Jersey Antitrust Act," P.L.1970, c.73 (C.56:9-1 et seq.) for:
a. a rental property owner, or any agent, representative, or subcontractor thereof, to subscribe to, contract with, or otherwise exchange any form of consideration in return for the use of services of a coordinator;
b. 1the owner of1 a coordinator to facilitate an agreement among rental property owners that restricts competition with respect to residential dwelling units, including by performing a coordinating function; or
c. two or more rental property owners to engage in consciously parallel pricing coordination.
4. Sections 7 through 17 of the "New Jersey Antitrust Act," P.L.1970, c.73 (C.56:9-7 through 56:9-17) shall apply for a violation pursuant to section 3 of this act.
1[5. In a civil action filed pursuant to this act, a complaint:
a. plausibly pleads a violation of section 3 of the "New Jersey Antitrust Act," P.L.1970, c.73 (C.56:9-3), if the complaint contains factual allegations demonstrating that the existence of a contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce is among the realm of plausible possibilities; and
b. need not allege facts tending to exclude the possibility of independent action.]1
15. Nothing in P.L. , c. (C. ) (pending before the Legislature as this bill) shall apply to multiple listing services or their members.1
6. The Department of Law and Public Safety, in conjunction with the Department of Community Affairs, shall develop and undertake a public education program designed to inform the citizens of this State of the provisions of this act. A component of this program shall include information posted on the website of each department dedicated to the provisions of this act and the steps a consumer is to take if the consumer suspects a violation of this act.
7. The Attorney General and the Commissioner of Community Affairs, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations to effectuate the purposes of this act.
8. This act shall take effect on the first day of the fourth month next following the date of enactment.
