Bill banning rent-setting algorithms passes through Colorado legislature

DENVER — With supply surging, Denver metro rents have dropped to a three-year low.

Comparing the first quarters of 2024 and 2025, the average rent has fallen from $1,875 per month to $1,819 per month, according to the Apartment Association of Metro Denver.

Apartment Association of Metro Denver

Zachary Neumann’s nonprofit, Community Economic Defense Project, helps families facing eviction. He thinks rent should be falling even more, given metro vacancy rates are at roughly 7%, a 16-year high.

“What that says to me is that prices are sticky, and it suggests that the way landlords are pricing does not actually reflect vacancy rates,” he told Denver7 last month. “Instead, there might even be an attempt to keep prices high, despite the fact that vacancy is going up and up and up.”

Denver7 took that concern to the Colorado Apartment Association (CAA), which argues that with inflation ballooning in recent years, this rent drop is significant.

“It’s truly astounding that rents today are lower than they were three years ago,” said Drew Hamrick, senior vice president of government affairs for CAA. “I mean, there's no other market segment out there like that.”

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Last week, Colorado lawmakers passed a bill meant to further protect renters.

House Bill 25-1004 would ban landlords from using artificial intelligence algorithms to set rent prices. That practice cost Denver renters an extra $136 per month in 2023, according to a report released by the Biden White House in December.

“We need to hold landlords accountable and not allow them to engage in collusion and price fixing,” said Neumann.

At one point, CAA supported HB25-1004, but now believes the final version is too broad.

“No one disagrees that any communication platform shouldn't be used for price collusion,” said Hamrick. “That's easy. But when you start defining what price collusion is, that's when it gets technical.”

The bill bans two or more landlords from using the same algorithm and entering into a price-fixing “scheme,” but the bill doesn't define what exactly represents a “scheme.”

“To prohibit the use of non-public data in these [algorithmic] programs can work,” said Hamrick.”To prohibit the use of any data in these programs doesn't work.”

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CAA said the algorithms are a critical tool to measure the rental market and aren't about setting the highest price, but a competitive one.

“Free markets only work if people can get current, accurate, up-to-date information with what the market’s doing,” Hamrick said. “Otherwise, people price by trial and error, and in the rental market, if you guess too high, then your unit sits there."

“Vacancy rates don't do anybody any good,” he added. ”We don't make any money on empty units, and empty units don't house Coloradans. So it's bad all the way around when people make a pricing mistake.”

It's unclear whether Gov. Jared Polis will now sign the bill into law. His office told Denver7 Tuesday, “Governor Polis looks forward to reviewing the final version of the bill as passed.”

Last year, Colorado joined seven states and the Department of Justice in a lawsuit against RealPage, a company accused of sharing non-public information with landlords as part of a pricing scheme.

RealPage has denied any wrongdoing, calling it an “inaccurate and distorted narrative.” It argues its software makes for a “healthier and more efficient rental housing ecosystem.”

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