How New York Is Regulating A.I.

Good morning. It’s Thursday. We’ll look at why New York City has emerged as a modest pioneer in A.I. regulation. We’ll also find out about a property tax exemption for a secret society in Brooklyn that has ties to the Underground Railroad.

Amid the cacophony about artificial intelligence, my colleague Steve Lohr says that New York City has become a pioneer in A.I. regulation.

The city is taking a focused approach to rules on how companies can use A.I. in hiring and promotion decisions — which could have life-changing consequences for job candidates or workers aspiring to rise through the ranks. The rules flesh out a law enacted in 2021 that covers only applicants and employees who live in New York City, but labor experts expect it to influence practices nationally. The city is set to begin enforcing the law on July 5.

Automation accelerated the changing nature of job interviews during the pandemic, with chatbots increasingly conducting interviews and résumé scanners prioritizing applications after going through them for keywords.

The city law says that companies that use A.I. software in hiring must be clear about it, telling job seekers in advance that an automated system will be used. The law also requires companies to have independent auditors test the technology annually for bias in race, ethnicity and gender.

The city’s focused approach represents an important front in A.I. regulation as policymakers wrestle with applying lofty-sounding principles. Robert Holden, a Democrat from Queens who was the chairman of the City Council technology committee when the law was passed, called it “a significant regulatory success toward ensuring that A.I. technology is used ethically and responsibly.”

But it has become a target of criticism from public interest advocates who say it was watered down and from business groups that consider it impractical.

“This was a wasted opportunity,” Albert Fox Cahn, the executive director of the Surveillance Technology Oversight Project, a civil rights and privacy group, told me. “New York had the chance to push back against this dangerous and discriminatory technology, but these new rules don’t go far enough.”

Julia Stoyanovich, an associate professor at New York University and the director of its Center for Responsible A.I., said last month that she was concerned that loopholes in the law could weaken its impact. “But it’s much better than not having a law,” she said. “And until you try to regulate, you won’t learn how.”

The law assesses an “impact ratio,” a calculation of the effect of using the software on a protected group of job candidates. The law does not look at how an algorithm makes decisions, a concept known as “explainability.” “The focus becomes the output of the algorithm, not the working of the algorithm,” said Ashley Casovan, executive director of the Responsible AI Institute, which is developing certifications for the safe use of A.I. applications in the workplace, health care and finance.

Businesses, too, have criticized the law. The Software Alliance — a trade group that includes Microsoft, SAP and Workday — called independent audits of A.I. “not feasible” because the industry has yet to draft standards or organize professional oversight bodies.

Cahn, of the surveillance technology group, raised broader objections.

“We don’t need auditing requirements, we need a ban,” he told me. “This is technology that we don’t have the tools to reliably audit, and I’m fearful these rules give companies the power to give themselves a clean bill of health. With financial audits, we at least agree with a lot of the basics for what constitutes a good audit. No one really agrees on what it takes to audit a lot of these systems.”

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“It’s a lifeline,” said Jacques David, a lawyer with the Legal Aid Society.

He was talking about the city’s decision to grant a property tax exemption to the United Order of Tents, a secret society of Black women that was organized after the Civil War and whose New York headquarters is a striking mansion in Brooklyn. But the group’s membership had dwindled, and the mansion needs work.

“What this honestly means is that the Tents will be able to save the headquarters building,” said David, who represented the nonprofit group in challenging the city’s earlier denial of an exemption. “The organization is identified by this building, and so the organization will be preserved. They’re already undergoing a renaissance. All these things will flourish now.”

He said the group had been assessed about $265,000 in property taxes by the city, which mistakenly considered the house vacant. City Councilman Justin Brannan, the chairman of the Finance Committee, said he stepped in after he heard about the problems.

“I was morally obligated to get involved,” he said. “I could not stand by and allow the City of New York to essentially evict an organization with such deep historical and cultural significance.” The group in Brooklyn, officially the United Order of Tents Eastern District No. 3, bought the mansion in 1945.

When my colleague Dodai Stewart wrote about the Tents last winter, the house had fallen into disrepair, with boarded-up windows, crumbling plaster, peeling paint and troubling water damage. She wrote that the Tents had been fighting real estate tax battles for almost 10 years and risked a tax lien that could have cost them the property. They sold part of their lot to a developer and spent the money on repairs that did not go smoothly.

David said the Tents were now looking to stabilize the building — and begin to apply for program grants. He said it had already received one totaling $100,000 from the African American Cultural Heritage Action Fund run by the National Trust for Historic Preservation.

“Our Bedford-Stuyvesant headquarters has served the community for over 75 years,” Essie Gregory, the president of the Tents, said in a statement, “and with this tax exemption, we will be able to continue our legacy for many more years to come.”

METROPOLITAN diary

$20 bill

Dear Diary:

It was a beautiful, breezy Friday night, beautiful enough that I decided to walk across town after work instead of taking the L.

Waiting to cross Second Avenue, I noticed a woman getting out of a car. Then I saw a $20 bill float through the air into the intersection.

The woman looked stricken. Cars were streaming down Second. The bill danced around taxis and trucks. Did she dare jump into traffic? Was it worth it?

Everyone waiting at the intersection watched the woman and her $20 bill, mesmerized. I wondered what I would do if it were my $20 caught in the wind.