As Lawsuits Mount, Colorado Moves To Outlaw Rent-Setting Algorithms

Colorado lawmakers are advancing legislation that would ban the use of algorithmic rent-setting software by landlords — a first-of-its-kind statewide prohibition aimed at curbing what some see as tech-enabled price coordination in the housing market.

House Bill 25-1004 would make it a violation of Colorado’s antitrust laws for landlords or software providers to use algorithmic devices that rely on shared or nonpublic data to recommend or set rental prices. The bill’s sponsors argue that such technology can distort competition by enabling de facto collusion among large landlords.

“We absolutely want companies and individuals to be able to do robust market analysis, economic forecasts, compile comparables in an efficient manner,” said Sen. Nick Hinrichsen, one of the bill’s sponsors. 

But, he said, the rights and well-being of renters deserve to be protected.

The bill passed the House in March and cleared a Senate committee, setting it up for a floor vote, potentially within days. Hinrichsen said the language has been fine-tuned to improve its chances with both the Senate and pro-business Democratic Gov. Jared Polis.

A similar bill failed in the Colorado Senate during the 2024 legislative session. California is also considering a statewide bill.

While algorithmic pricing isn’t new, it’s come under intense legal and political scrutiny since a 2022 ProPublica investigation accused RealPage, a Texas-based proptech firm, of inflating rents through its software platform.

Lawsuits are flying between the Department of Justice, corporations and municipalities, and a growing list of cities — including San Francisco, Philadelphia and Berkeley, California — have enacted or proposed local bans. 

RealPage is currently suing the city of Berkeley on First Amendment grounds, and an attorney for the company alluded to the possibility of more lawsuits at a press conference earlier this month. 

San Diego Council member Sean Elo-Rivera, who authored a similar measure in his city, called the software “a thin veil for what is obviously collusion and price fixing,” in an Axios article.

“There’s a lot of talk about how this protects renters,” Hinrichsen said. “It’s critical to protecting small and medium-size landlords and property managers as well, because they’re not the ones who have access to these tools.”

Renters may have a temporary reprieve. Rents in Denver’s urban core dropped 3% last year driven by a wave of new apartment deliveries. But with the construction pipeline slowing, some experts say the market could flip back toward constrained supply and rising rents by 2026.

There is little evidence that bills regulating these algorithms will make a difference in rent prices since the regulatory movement is in its infancy. Backers, including ProPublica and Hinrichsen, point to a White House study showing algorithmic pricing boosts rent by about $70 each month.

Legal observers say the bill strikes at the heart of a murky issue: when tech becomes a proxy for coordinated pricing.

Informed sellers and buyers make better decisions, Jerrold Bregman, a real estate attorney and partner at BG Law, told Bisnow. If each unit is priced correctly, “equilibrium will be met,” he said. 

But transparency is critical, and collusion is already illegal, he said. The bill is well-intentioned, he stressed, but also a smart political move.

“Politics can’t be ignored,” Bregman said. “I think there’s some political currency to be gained to be seen as attacking big business and trying to rein in predatory activity.”