Colorado Governor Jared Polis has vetoed a bill that would have made the state the first to prohibit landlords from using rent-setting algorithms, a technology many housing advocates say contributes to rising rental prices nationwide.
The bill targeted RealPage, a real estate software company currently facing a federal lawsuit accusing it of enabling landlords to coordinate and inflate rent prices illegally. Alongside Colorado, eight other states have joined the Department of Justice’s suit. RealPage denies any wrongdoing and has sought to dismiss the case.
Critics argue that RealPage’s software pools confidential data from various property management companies, allowing landlords to align rental rates and limit competition, which would normally help keep prices down. RealPage’s clients include major landlords managing millions of housing units across the country.
Although the Colorado Legislature, dominated by Democrats, passed the bill along party lines, Governor Polis rejected it, stating in his veto letter that any illegal landlord collusion is already prohibited under existing laws.
“Reducing market friction through legitimate means that do not entail collusion is good for both renters and landlords,” Polis wrote. He cautioned against removing tools that help identify vacancies and provide consumers with valuable data for efficiently managing housing availability.
RealPage praised Polis’ veto, with spokesperson Jennifer Bowcock calling it an example of “courageous leadership.” She added that this decision supports a balanced housing ecosystem benefiting both renters and property providers.
However, the veto sparked backlash from housing advocates and consumer rights groups like the American Economic Liberties Project, which has been active in opposing RealPage’s rent-setting software.
“This 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,” said Sam Gilman, leader of a Colorado nonprofit focused on economic justice.
RealPage’s software offers landlords daily pricing suggestions for available apartments, which landlords may choose to follow or not. Critics maintain that because the software accesses extensive confidential data, it effectively helps landlords push rents to the highest possible levels.
While Colorado was the first state to pass legislation targeting rental algorithms, several cities have enacted similar laws in the past year, including Philadelphia, Minneapolis, San Francisco, Berkeley, Jersey City, and Providence.
RealPage has opposed these local measures, even suing Berkeley’s city government, arguing the ordinance violates its free speech rights and stems from a campaign of misinformation about its products.
The company points to a shortage of housing supply as the real cause of high rents and insists that its recommendations often encourage lowering rents, since landlords aim to maximize revenue by keeping units occupied.
Meanwhile, a provision added to a Republican tax bill would prohibit states and local governments from regulating artificial intelligence for ten years. Recently, five Democratic senators asked RealPage if it had any role in pushing for that AI moratorium clause.
RealPage denied involvement but expressed support for “a thoughtful, well-grounded, and consistent regulatory approach to AI” rather than a patchwork of local rules.
