NLIHC Joins Sign-On Letter Opposing Preemption of State Artificial Intelligence Laws in Budget Reconciliation Bill, Citing Need for Renter Protections from Discriminatory AI Practices

By Libby O’Neill, NLIHC Senior Policy Analyst 

NLIHC joined a sign-on letter to the United States Senate opposing a provision in the reconciliation bill that would preempt state and local laws governing artificial intelligence (AI) or withhold critical federal broadband funding for jurisdictions that enact such laws. The provision would restrict states and localities from addressing the harm caused by AI, and block potential solutions. Housing advocates have been raising concerns over the use of AI in rent price setting and tenant screening, and how it furthers discriminatory practices and housing inequities.  

The use of AI has broad implications for consumers. In housing, AI is used regularly for tenant screening, rent-setting, and building surveillance. Research shows that the use of AI can worsen discriminatory practices because of racial disparities in the data used to generate AI algorithms. For example, a study by TechEquity Collaborative found that when landlords used AI screening tools, Black and Latino renters were almost half as likely to have their rental applications accepted than white respondents. Seventeen states have introduced bans on AI rent-setting software after RealPage used AI to enable competitor landlords to coordinate artificial and illegal rent hikes. In May 2024, HUD’s Office of Fair Housing and Equal Opportunity (FHEO) issued guidance aimed at protecting rental housing applicants from discriminatory tenant screening practices that could violate the “Fair Housing Act” (See Memo, 5/6/2024). 

“Housing inequities are not new; what is new is how AI brings speed, scale, and secrecy to harmful practices. Tenants, already bearing the brunt of the entrenched cost of living crisis, cannot be sacrificed to unregulated technology with demonstrated patterns of discriminatory uses,” the letter states. State and local jurisdictions must be able to respond to unfair AI practices to protect consumers from discrimination.  

The letter urges Senators to remove this provision from the reconciliation bill and oppose other attempts to move this policy forward.  

Read the sign-on letter here: http://bit.ly/447XVJG