A last-minute provision in the federal budget reconciliation act will preempt state and local policies on algorithmic rent-setting software.
A provision in the proposed federal budget reconciliation bill, could significantly impact local and state efforts to regulate algorithmic rent-setting software. The bill includes language that would prohibit states and their political subdivisions from enacting or enforcing any laws or regulations concerning artificial intelligence (AI) models, systems, or automated decision systems for a period of ten years. This sweeping preemption would effectively nullify existing and future local ordinances aimed at curbing the use of AI-driven rent-setting tools which have been the subject of multiple lawsuits and federal investigations for alleged price-fixing practices.
From a Memo to the House Energy & Commerce Committees,
Subsection (c) states that no state or political subdivision may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the 10-year period beginning on the date of the enactment of this Act.
The inclusion of this preemption clause follows significant lobbying efforts by industry stakeholders. Cities like San Francisco, Philadelphia, and Minneapolis have already enacted bans on algorithmic rent-setting software, citing concerns over inflated rents and reduced housing availability. Colorado is the only state to have taken action to regulate algorithmic rent-setting software so far, but if enacted, this provision would eliminate a tool for future use to make housing in Maryland more affordable.
Read the House Energy & Commerce Memo.
Read more about the efforts to tackle algorithmic rent-setting software.
