'A Betrayal': Colorado's Democratic Governor Vetoes Bill Targeting Algorithmic Rent-Setting

Colorado Gov. Jared Polis, a Democrat seen as a potential 2028 presidential contender, used his veto pen on Thursday to block legislation aimed at banning rent-setting algorithms that corporate landlords have used to drive up housing costs across the country.

The bill, known as H.B. 1004, would have prohibited algorithmic software "sold or distributed with the intent that it will be used by two or more landlords in the same market or a related market to set or recommend the amount of rent, level of occupancy, or other commercial term associated with the occupancy of a residential premises."

A report issued late last year by the Biden White House estimated that algorithmic rent-setting cost U.S. renters a combined $3.8 billion in 2023. According to the Biden administration's analysis, Denver tenants have been paying an average of $1,600 more on rent each year because of rent-setting algorithms. The approximate monthly rent for a one-bedroom apartment in the city is $1,600.

Pat Garofalo, director of state and local policy at the American Economic Liberties Project, called Polis' veto "a betrayal" that makes "his priorities clear."

"Governor Polis had a simple choice: stand with working Coloradans or side with corporate landlords using secretive algorithms to allegedly price-fix rents," said Garofalo. "The governor talks a big game about affordability and abundance, but when given the chance to take real action—at no cost to taxpayers—he protected profiteers and let families keep paying a 13th month of rent. It's a betrayal of the values he claims to champion, and Colorado renters won't soon forget it."

"Governor Polis vetoed the most meaningful legislation we had to lower costs for renters."

Sam Gilman, co-founder and president of the Denver-based Community Economic Defense Project, said that the governor's veto "sends the devastating message that corporate landlords can keep using secret price-fixing algorithms to take extra rent from people who have the least."

"At a time when costs keep rising for working people and Republicans in Washington are attacking the social safety net," Gilman added, "Governor Polis vetoed the most meaningful legislation we had to lower costs for renters."

In a letter explaining his veto, Polis voiced agreement with the bill's supporters that "collusion between landlords for purposes of artificially constraining rental supply and increasing costs on renters is wrong." But he warned the bill could have the unintended effect of banning software that helps "efficiently manage residential real estate."

The governor's reasoning did not assuage critics.

"It stood up to corporate power," Gilman said of the legislation. "It promised to bring apartments back online. And it took on economic abuse that steals $1,600 a year from renters."

State Rep. Steven Woodrow (D-2) said it is "unfortunate that someone who claims to care so deeply about saving people money has chosen the interests of large corporate landlords over those of hard-working Coloradans."

State and local legislative efforts to rein in algorithmic rent-setting have gained steam in recent years following an explosive ProPublicastory in 2022 detailing RealPage's sale of "software that uses data analytics to suggest daily prices for open units."

"RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money," the investigative outlet reported. "One of the algorithm's developers told ProPublica that leasing agents had 'too much empathy' compared to computer-generated pricing. Apartment managers can reject the software's suggestions, but as many as 90% are adopted, according to former RealPage employees."

The Denver Postreported Thursday that the vetoed bill "essentially targeted RealPage," which lobbied aggressively against a similar measure that died in the Colorado Legislature last year.

Polis also used his veto authority on Thursday to tank legislation that would have "limited how much ambulance services can charge for transporting patients and required health insurance companies to cover the cost, minus deductibles or copays," The Colorado Sunreported.