Crackdowns on algorithmic rent-setting software are set to remain in place after the Senate struck down a provision in the proposed federal budget reconciliation bill that would have banned state and local regulations on artificial intelligence for the next decade.
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The Senate passed the massive budget bill Tuesday morning, hours after a 99-1 vote to remove the 10-year moratorium on AI regulation.
The vote followed weeks of pushback from states and consumer groups, which argued the ban would be a gift to an industry looking to avoid accountability, The Associated Press reported. The provision would have nullified algorithmic rent-setting software bans passed by states as well as cities such as San Francisco, Philadelphia, Minneapolis and San Diego.
Critics also warned that the ban was too broad and could prevent states from protecting children online and shielding the public from deepfakes.
The One Big Beautiful Bill initially included language preventing states or cities from enforcing any law “regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the 10-year period.”
In response to criticism, lawmakers attempted to link the proposal to federal funding related to broadband internet and AI infrastructure, as well as cutting the 10 years to five and exempting some existing laws on the matter.
But Republican Sen. Marsha Blackburn of Tennessee and Democratic Sen. Maria Cantwell of Washington partnered late Monday to introduce an amendment to remove the entire proposal. Only Republican Sen. Thom Tillis of North Carolina voted against the amendment.
Among the highest-profile algorithmic rent-setting systems is the one owned by Texas-based proptech firm RealPage, which has faced a flood of more than 30 class-action lawsuits over alleged price-fixing in the last few years as well as an ongoing antitrust case from the Department of Justice.
The real estate software company and the commercial real estate firms that use its platform have faced considerable legal and political scrutiny since a 2022 ProPublica investigation accused it of inflating rents through its platform.
RealPage didn't immediately respond to a request for comment on the removal of the AI provision.
The AI-friendly language was added to the proposed legislation after intense lobbying from trade groups like the National Multifamily Housing Council.
Proponents of the AI provision argue a patchwork of technology regulations from states could undercut the U.S. in its race with China for AI supremacy.
President Donald Trump earlier this year called for an acceleration of research and development as well as dismantling regulatory barriers to maintain America’s technological edge over the rest of the world. Those efforts won corporate support from firms like Microsoft and OpenAI, which have called on the administration to sweep away state laws that could jeopardize that development.
CRE followed suit. According to its first-quarter lobbying report, NMHC worked to have AI-related issues added to the agenda, notably pushing for “federal policies affecting usage of data, artificial intelligence, software, and other emerging technologies used in real estate operations, development, or finance.”
“The Senate’s overwhelming rejection of this Big Tech power grab underscores the massive bipartisan opposition to letting AI companies run amok,” Max Tegmark, president of the nonprofit Future of Life Institute, told Time.
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