Colorado House passes bill banning algorithms blamed for higher rents

Colorado House Passes Bill to Ban Rental Price Algorithms

The Colorado House passed a bill on Wednesday for the second time in a year that aims to prohibit the use of algorithms that have been accused of inflating apartment rents in Denver and nationwide.

House Bill 1004 would prevent the use of algorithmic devices for setting or recommending rental prices or occupancy levels in rental housing. The bill specifically targets RealPage, a software company based in Richardson, Texas, that is facing lawsuits from the U.S. Department of Justice and the state for allegedly enabling price-fixing through its algorithm.

Denver Democratic Reps. Steven Woodrow and Javier Mabrey, the sponsors of the bill, stated that the legislation aims to promote competition among housing providers to lower prices instead of colluding to keep rents high.

According to a report from the outgoing Biden administration, 45% of renters in the Denver area lived in apartments using rent-setting software, resulting in them paying over $1,600 more annually compared to other renters. RealPage executives have been quoted in a 2022 ProPublica investigation praising the rent increases facilitated by their algorithm.

RealPage has denied any wrongdoing, with company vice president Mike Semko stating during a committee meeting that the allegations against them were false. The Colorado Apartment Association has also defended the algorithms, arguing that they can be used to lower prices and that rental price-fixing does not occur.

House Republicans criticized the bill, accusing Democrats of targeting landlords and interfering with the housing market. However, Democrats argued that the software was disrupting the free market and hindering landlords from competing and lowering prices.

Despite the bill’s defeat last year, lawmakers are more optimistic about its chances this time around. Senate President James Coleman expressed confidence that the bill would pass, noting that Senate colleagues have had more time to study the issue.

Stay up-to-date with Colorado Politics by signing up for our weekly newsletter, The Spot.