Federal Judge Blocks New York’s First-of-Its-Kind Crackdown on Algorithmic Rent-Setting

A federal judge in Manhattan has blocked New York from enforcing a key part of its first-of-its-kind crackdown on algorithmic rent-setting, giving property management software company RealPage an early victory in its constitutional challenge.

U.S. District Judge Valerie Caproni granted RealPage a preliminary injunctionpreliminary injunctionA preliminary injunction is a temporary court order issued before a case is finally decided that requires a party to take or stop an action while the litigation continues. Federal courts generally consider the likelihood of success, irreparable harm, the balance of equities, and the public interest before granting one.Read more → on September 29, 2026, barring enforcement of a provision that makes it unlawful for landlords to set rents or other lease terms based on recommendations from certain algorithmic pricing tools. She also denied New York Attorney General Letitia James’ request to dismiss the case.

The order targets Section 340-b(3) of New York’s General Business Law, which treats a landlord’s knowing or reckless use of covered software recommendations as an unlawful agreement. Landlords cannot be penalized under that provision while the injunction remains in place. Caproni left untouched a separate section targeting companies that operate or license software used to coordinate rental pricing.

New York enacted the law in October 2025 amid growing scrutiny of software that collects rental information from multiple property owners and recommends rents, lease renewal terms, occupancy levels or other conditions. The measure expanded the state’s Donnelly Act, its antitrust law, to cover algorithm-assisted rental pricing.

RealPage sued James in November 2025, arguing New York had gone too far by restricting pricing recommendations generated from information landlords may lawfully consider.

Caproni agreed that the landlord provision may sweep too broadly because it covers recommendations built from both competitors’ nonpublic information and data already available to the public. A landlord could therefore face liability for relying on software that analyzes rental prices visible in the marketplace.

“Under the rubric of preventing price fixing, the statute prohibits normal commercial conduct just because it is facilitated by software,” Caproni wrote, noting that businesses commonly look at competitors’ prices when deciding what to charge.

She described the decision as “a close call,” finding RealPage only “marginally” likely to show the provision is unconstitutional.

New York defended the measure as an antitrust restriction on coordination among landlords. James’ office argued that RealPage’s challenge could interfere with the state’s ability to regulate conduct that reduces competition.

The ruling comes as RealPage faces broader scrutiny over its rental pricing technology. The company filed its New York lawsuit two days after reaching a settlement with the U.S. Department of Justice that restricts its use of competitors’ nonpublic rental data in pricing recommendations.

Federal antitrust authorities have accused RealPage and major property managers of sharing sensitive rental information and using common pricing technology in ways that reduce competition. RealPage has disputed allegations that its software facilitates unlawful price fixing.

The injunction will remain in place as RealPage’s challenge continues in the Southern District of New York. Caproni’s refusal to dismiss the lawsuit allows the constitutional claims to move forward.