Here is what we know so far:
President Biden signed an executive order titled “Executive Order on Ensuring the Ethical Development and Use of Artificial Intelligence,” on October 30, 2023, that is the most comprehensive AI legislation ever enacted in the United States. The order aims to protect Americans from the potential risks of AI systems while also promoting the development and use of responsible AI.
The new legislation has several items that are specifically of note to anyone in the real estate industry.
One item is the requirement for developers of the most powerful AI systems to share their safety test results and other critical information with the U.S. government. This could include AI systems used for tasks such as real estate appraisal, underwriting, and fraud detection. By sharing this information with the government, developers can help to identify and mitigate potential risks from these systems.
Another item of note is the directive for federal agencies to root out bias in the design and use of new technologies, including AI. This could impact the way that federal agencies such as the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) use AI in their programs and operations. For example, HUD could use its authority to enforce fair housing laws to ensure that AI systems used by real estate lenders and appraisers are not biased against certain groups of people.
The order also protects the public from algorithmic discrimination. This could impact the way that businesses and organizations in the real estate industry use AI to make decisions about things like who to approve for a mortgage or who to rent to. For example, the order could prohibit real estate companies from using AI systems that discriminate against people based on their race, gender, or other protected characteristics.
Finally, the order promotes research and development of AI technologies that are safe, equitable, and accountable. This could benefit the real estate industry by leading to the development of new AI tools and solutions that can help businesses and organizations to operate more efficiently and effectively, while also protecting the rights of consumers.
Overall, the new AI legislation has the potential to have a significant impact on the real estate industry. It is important for businesses and organizations in the industry to be aware of the requirements of the legislation and to take steps to ensure that their use of AI is compliant.
Here are some specific examples of how the legislation could impact real estate professionals:
- A real estate agent who uses AI-powered software to generate leads may need to take steps to ensure that the software is not biased against certain groups of people.
- A real estate lender who uses AI to underwrite loans may need to share information about their AI system with the government.
- A property manager who uses AI to screen tenants may need to take steps to mitigate bias in their AI system.
It is important to note that the new legislation is still in its early stages, and it is not yet clear how it will be implemented. However, businesses and organizations in the real estate industry should begin to prepare for the potential impact of the legislation on their operations.
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