LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

ASSEMBLY, No. 3497

STATE OF NEW JERSEY

222nd LEGISLATURE

 

DATED: MAY 26, 2026

 

 

SUMMARY

 

Synopsis:

Prohibits certain coordination among residential rental property owners who restrict competition with respect to residential dwelling units.

Type of Impact:

Annual State revenue and expenditure increases.

Agencies Affected:

Department of Law and Public Safety; the Judiciary; Department of Community Affairs; municipalities.

 

 

Office of Legislative Services Estimate

Annual Fiscal Impact

 

 

State Expenditure Increase

Indeterminate

 

State Revenue Increase

Indeterminate

 

 

·         The Office of Legislative Services (OLS) finds that annual State expenditures would increase under the bill from the cost of investigations, civil enforcement actions, and potential litigation undertaken by the Office of the Attorney General.  The magnitude of these costs, as well as any associated court costs, is indeterminate and would depend on the volume of complaints received and whether litigation ensues.

·         The bill would also generate an indeterminate amount of one-time costs for the Department of Law and Public Safety and the Department of Community Affairs to undertake the required public education program.

·         The State would receive an indeterminate amount of revenue annually from fees and fines imposed on residential rental property owners who violate the provisions of the bill.

 

 

BILL DESCRIPTION

 

      This bill aims to address the State's affordable housing crisis by prohibiting certain anti-competitive coordination among residential rental property owners.  Specifically, it makes it unlawful for landlords to use software or data analytics services that collect nonpublic rental information from multiple property owners and use algorithms to recommend pricing.  The bill also prohibits consciously parallel pricing coordination, meaning tacit or express agreements between two or more unrelated landlords to raise, lower, or manipulate rental prices.  These prohibitions would be enforced as violations of the existing New Jersey Antitrust Act.  The bill establishes a relaxed pleading standard for civil complaints, allowing plaintiffs to establish a plausible violation without having to rule out the possibility of independent action by landlords.

      The bill’s provisions would not apply to the actions of a rental property owner related exclusively to multiple properties owned by the same property owner. Additionally, the actions of a third-party property manager taken in accordance with a rental contract is not deemed to constitute consciously parallel pricing coordination.  Municipalities would also be prohibited from adopting ordinances that supersede this act.

      The Department of Law and Public Safety and the Department of Community Affairs are jointly required to develop and carry out a public education program, including dedicated website content, informing residents about the law's provisions and how to report suspected violations.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS finds that annual State expenditures would increase under the bill from the cost of investigations, civil enforcement actions, and potential litigation undertaken by the Office of the Attorney General.  The magnitude of these costs, as well as any associated court costs, is indeterminate and would depend on the volume of complaints received and whether litigation ensues.  An analysis of a similar bill (AB 325) in California, which went into effect January 1, 2026, found that it could result in an unknown but potentially significant amount of costs to the courts, but that the fiscal impact would depend on many unknowns, including the number of cases filed and the factors unique to each case.  Likewise, costs to the California Department of Justice could not be estimated but it was noted that the level of costs would depend on whether the Attorney General pursued any enforcement actions and the level of additional staffing that would be required to handle the related workload.  In New Jersey, the bill would also generate an indeterminate amount of one-time costs for the Department of Law and Public Safety and the Department of Community Affairs to undertake the required public education program.

      The OLS finds that the State would receive an indeterminate amount of revenue annually from fees and fines imposed on residential rental property owners who violate the provisions of the bill. The OLS lacks the informational basis for estimating the extent of these annual revenue collections.  The OLS also notes the bill could result in a decrease in local revenue for a municipality which has enacted, or otherwise would enact, an ordinance superseding this bill that imposed a monetary penalty for violations of the ordinance.  The OLS cannot determine how many municipalities have enacted or would enact such an ordinance in the absence of the bill nor the amount of forgone revenue that otherwise would be collected from fees and fines imposed on residential rental property owners violating the ordinance. 

Section:

Local Government

Analyst:

Grace Ahlin

Associate Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).