SDNY Preliminarily Enjoins New York's Algorithmic Rent-Setting Ban
A federal judge enjoined enforcement of New York GBL § 340-b(3) on landlords setting rents from coordinating-software recommendations, but left the Donnelly Act's software-facilitation ban intact.
On September 29, 2026, Judge Valerie Caproni of the U.S. District Court for the Southern District of New York preliminarily enjoined the New York Attorney General from enforcing Section 3 of N.Y. Gen. Bus. Law § 340-b, the Donnelly Act provision enacted in October 2025 that makes it unlawful for residential landlords to set or adjust rents, renewal terms or occupancy levels based on recommendations from software performing a "coordinating function." RealPage's facial First Amendment challenge succeeded: the court treated algorithmic pricing recommendations as commercial speech subject to Central Hudson, accepted the State's interest in preventing algorithmic collusion as substantial, but found the reasonable-fit showing "bare bones" and identified a less restrictive alternative — limiting the ban to software relying on non-public data from horizontal competitors. Section 2, which bars facilitating no-compete agreements among landlords through coordinating software, was not enjoined. The order is not limited to RealPage, but it is preliminary: as of October 20, 2026 the State had not appealed, the Attorney General moved to reconsider on October 13, 2026, and an initial pretrial conference is set for October 30, 2026. Pricing-software vendors and landlords should audit what data their tools ingest and how it flows into recommendations.