Colorado lawmakers eye crackdown on rent-setting algorithms
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Colorado Democratic lawmakers plan to revive an effort to take down rent-setting algorithms in the upcoming legislative session after a similar bill died last year.
By the numbers: Renters in metro Denver spent an extra $136 a month in 2023 because of pricing algorithms used by landlords, the second-steepest hike among major metros nationwide.
- That's according to an analysis first shared with Axios from the White House Council of Economic Advisers, which found the figure for renters across the country totaled $3.8 billion.
Why it matters: As Coloradans struggle to afford housing, the report puts some hard numbers to accusations that have piled up against RealPage, a company whose software helps big landlords and property managers set prices, Axios' Emily Peck reports.
- Last August, Colorado joined the U.S. Department of Justice in suing the Texas-based company, alleging its pricing algorithm enables landlords to collectively increase rents.
Driving the news: This week, that lawsuit was expanded to add six of the nation's largest landlords — Greystar, LivCor, Camden, Cushman, Willow Bridge and Cortland — for allegedly coordinating in the rent-inflation scheme.
- The named companies manage at least 28% of all multifamily housing units in both metro Denver and Colorado Springs, a new Washington Post analysis found.
- Although the DOJ announced it had settled with Cortland, Colorado Attorney General Phil Weiser said the state isn't ready to back down on that company yet.
What they're saying: If landlords are engaging in "harmful" practices that raise rents, "they must be held to account," Weiser said in a statement Tuesday.
The other side: In an initial statement last month, RealPage spokesperson Jennifer Bowcock told Axios the Biden administration should "stop scapegoating" the company's technology for "housing policy failures" and refrain from stifling economic innovation.
- In an updated statement Wednesday, Bowcock criticized the White House CEA for failing to contact RealPage about the report, calling their analysis "riddled with flawed assumptions."
- "Their conclusions are based on the erroneous assumption that all property managers are setting coordinated rents, but that is not how RealPage's revenue management software (RMS) works," she said.
- The company has filed a motion seeking to dismiss the DOJ's claims in the antitrust suit.
What to watch: Denver state Sen. Robert Rodriguez, the chamber's majority leader, expects a smoother path this year as fellow Democratic lawmakers renew their push to regulate rent-setting software.
- "There's been a lot of lawsuits against these algorithms manipulating markets, and I think that probably gives a little bit more appetite for this to be addressed," he said this week.
Editor's note: This story has been updated with a detailed response from RealPage.