Rhiannon Mulligan was in the depths of house hunting in Sacramento in 2024 when she noticed a trend.
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Along with her partner, Mulligan drove an hour to view a home. The two knew the listing was digitally staged, meaning all the furniture they saw in photos online would not be in the actual home.
What they didn’t expect was that the digitally added furniture would never even fit in the house.
“They had staged it with a dining room, four chairs, a sectional, TV stand — all of this in maybe a 10-by-10 room,” Mulligan, a senior legislative aide for Assemblymember Gail Pellerin, D-Santa Clara, said.
“There’s no way that would fit. If we had known how small that front room was, we wouldn’t have even looked,” said Mulligan.
Mulligan mentioned the ordeal to her boss, who decided that she could do something about it.
In October, legislation requiring advertisements for property sales to disclose any use of artificial intelligence or digital staging and include the original image before modifications were made was signed into law.
Now, Pellerin is looking to extend this law through AB 2025, which would require the same disclosures for ads for rental properties.
The bill has already seen strong support and passed the Assembly in May.
“We’re just trying to provide Californians with more information when they’re looking for housing,” Pellerin said.
“It simply requires that landlords be up front about it, so renters know what they’re looking at before deciding to tour or apply for that unit,” the lawmaker added.
Material changes, such as adding furniture or landscaping that does not exist naturally, would have to be disclosed.
Normal photo touchups, like lighting or orientation adjustments, would not need to be disclosed, Pellerin said.
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Pellerin worked closely with the California Department of Real Estate to ensure that the bill could be properly enforced. Most of the time, according to Pellerin, enforcement comes as a warning to licensees to disclose AI use and post the unaltered image.
“I think by creating a clear standard for all real estate licensees, we make it easier for them to know what is expected of them,” Pellerin said. “It also means that licensees who choose to not use the digital staging don’t feel that they’re being left at a competitive disadvantage.”
So far, California is one of the only states to have introduced legislation regarding AI use in the real estate industry.
In New York, a bill introduced in May would designate misrepresentations in real estate listings as an abusive act, which could lead to the suspension or revocation of real estate licensees for violators. This bill is still working its way through the legislative process.
Both last year’s law and the new bill by Pellerin focus less on punitive measures, said Pellerin, but on helping the real estate industry become more transparent for consumers.
“I think that we’re definitely leading the way in the nation,” Pellerin said. “There’s a lot that can be done with AI, and we just want things to be honest and transparent.”
AB 2025 was referred to the Senate before the summer recess began on July 2. No opposition is on file, according to the bill analysis, and it has so far received broad bipartisan support.
Sen. Tony Strickland, R-Huntington Beach, was one of the few legislators to vote against the bill.
“Consumers deserve honest advertising, and California law already prohibits misleading advertising,” Strickland said.
“My concern with AB 2025 is whether it will actually stop the bad actors who are intentionally breaking the rules,” said Strickland.
“If someone is willing to mislead renters with deceptive, digitally altered photos, it’s hard to believe another disclosure requirement will change their behavior. Instead, this bill is likely to create additional burdens for the many landlords who already follow the law, without providing meaningful new protections for consumers.”
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The California Legislature will return from the recess on Aug. 3.