A bill to ban landlords from using services that aggregate apartment information to help them set rent prices is back again at the legislature, after failing in last year's legislative session.
Democratic lawmakers are promoting this year's bill as part of a larger package they say will help with the cost of living in Colorado. It’s sponsored by Reps. Javier Mabrey and Steven Woodrow and Sen. Julie Gonzales, the same lawmakers behind the previous version of the bill.
The bill aims to stop what state representatives are calling a form of collusion that has been collectively driving up housing prices.
Lawmakers want landlords to stop working with RealPage and similar companies. RealPage collects internal data from landlords throughout the metro area, including information about vacancies, rents and more, and then shares recommended rental prices with them based on that market data. Critics also allege that the company pushed landlords to use the prices determined by the software.
Realpage is being sued by Colorado’s Attorney General, the Justice Department and seven other states.
“I do just want to take the opportunity to thank Attorney General (Phil) Weiser for fighting in the courts and taking on some of these corporate bad actors. But, we cannot wait for the courts to settle this,” Rep. Mabrey said during the press conference. “We believe a lot of this is already illegal, but we're going to (take a) stand this legislature and say ‘enough is enough' and change the law right now to be absolutely clear.”
However, opponents of the bill dispute the idea that the practice of using rent algorithms amounts to unfair collusion.
Drew Hamrick with the Colorado Apartment Association says that collusion is essentially made up of three parts: direct communication between competitors, communication about future prices and for the competitors involved to be big enough to impact the larger market.
“We know the sponsors and the proponents are sincerely worried that these products somehow lead to price collusion, and so we expected (the bill) to come back,” Hamrick said. “There's been a lot of negative publicity about these products between then and now, and I think that changes the political climate a little bit. We do not share those concerns that these products either raise the cost of rent.”
A study last year found that units priced by RealPage Inc. cost Denver residents about $136 more per month, and that the owners of 45 percent of apartments rented out in the city last year used RealPage. The Council of Economic Advisors conducted the study using data from RealPage and the U.S. Census Bureau’s American Community Survey. It was released under the Biden Administration, but has been removed under the current Trump Administration.
Hamrick says the 45 percent figure just isn’t plausible.
“There's no vendor, no matter how valuable their product is, no matter how cheap it's sold for, that has 40 percent of the rental provider market on anything. If RealPage has more than 15 percent of the market, I'd be shocked,” Hamrick told CPR News. “So the level of importance of their product is greatly overemphasized in this discussion.”
But critics see a bigger footprint. In the past, RealPage and the landlords who use it have been compared to a cartel, replacing the competition that can drive down prices with unstated agreements on what to charge.
“We are ready to do the work to ban these unfair rental algorithms from existing in the state of Colorado,” Sen. Gonzales said during the press conference. “While the important litigation continues to wind its way through the courts, it is another month that Colorado renters — and Denver renters — in particular, will have to continue to suffer under this unfair practice.”
Last year's bill failed over disagreements between the House and Senate about an amendment that would have allowed landlords to keep using these products as long as companies like RealPage also offered a recommendation product to the public.. Looking to its chances this year, Gonzales says she hopes changes in the makeup of theSenate will help it go further this time around.
A number of the Democratic Senators who joined Republicans to oppose last year’s bill have since left the legislature.
RealPage and other opponents of the ban have defended the use of the algorithms, saying that they’re a useful tool that can minimize vacancies, ensuring that landlords don’t leave housing empty by overpricing it.
“Banning the use of non-public information could have negative and unintended consequences for consumers,” RealPage said in a statement to CPR in 2024. Further, removing a housing provider’s ability to use normal technology and tools, and accurate data, to aid its business decision-making will not improve housing affordability or availability.”
On the same day lawmakers were touting the bill, the Apartment Association of Metro Denver announced that rent prices have seen the largest quarterly drop in over 40 years, with an average decrease of $69.
“The reason for that is exactly what you'd expect. There've been a lot of new apartment units built and put on the market over that period of time,” Hamrick said. “Supply is keeping up with demand, which is very, very, very good for consumers.”
The anti-rent setting bill is part of a package Democrats are running to target housing and affordability in the state.
“The results of the last election should be a warning for Democrats,” Mabrey said at the press conference. “We need to return to our roots and center the concerns of working families, and here we are putting a flag in the ground and saying that we are on the side of working people and we will prioritize their livelihoods over these record corporate profits.”
Editor's Note: An earlier version of this story misspelled Sen. Julie Gonzales last name. It has been corrected.
Denverite Editor Andy Kenney contributed to this reporting.
- Colorado AG claims landlords are colluding to raise rents. What does that mean for Denver renters? (Denverite)
- FTC sues Greystar, saying the property manager used hidden fees to swindle renters out of millions
- Some landlords, companies offer incentives to Colorado tenants who pay rent on time
- White House study says rent algorithms raise costs for Denver renters by $136 a month (Denverite)
- Algorithms raising rent? Colorado moves to crack down (Denverite)
