Gov. Jared Polis’ support uncertain as ban on software used by landlords to set rents nears finish line

Colorado lawmakers are poised to pass a bill banning the use of algorithms that state and federal officials say are used to artificially hike rents in the Denver metro area.

But the proposal has received a lukewarm reception from Gov. Jared Polis, who will soon decide whether to sign it into law.

Barring a perfunctory procedural vote in the House, House Bill 1004 is on a glide path to Polis’ desk after clearing the Senate on Monday. The bill’s Senate sponsors had temporarily delayed the vote to continue discussions with Polis’ office, Senate leadership said Tuesday morning, but then pushed the bill through as the session winds down.

If passed, the law would become the first of its kind in the country, supporters said. It would prohibit landlords from using algorithms to determine pricing and occupancy levels. Critics have alleged the software is used to keep rents higher than they normally would be.

But Polis’ office has signaled concerns about the bill throughout the session, and supporters have worked with his staff for months to ease the measure’s path. The bill has been amended to ensure it doesn’t impact websites like Zillow, for instance.

Polis’ current position is unclear. In a Monday statement to The Denver Post, Polis spokeswoman Shelby Wieman wouldn’t say if the governor intends to sign the bill once it reaches his desk.

“Governor Polis is committed to reducing housing costs for Coloradans and has taken a number of steps to do that, and he likes math in general and will review this legislation if it reaches his desk,” she said in a statement.

Wieman did not respond to a follow-up question about how Polis’ affinity for math relates to his position on the bill.

The bill’s Democratic sponsors urged Polis to sign the bill. A Biden White House report released late last year found that rent-setting software was prevalent in the Denver area and that the technology cost tenants in properties using it more than $1,600 in additional rent every year on average. That was the second-highest burden on renters of the 20 major metro areas surveyed by White House researchers.

“The governor has said time and time again he really likes math,” said Sen. Julie Gonzales, a Denver Democrat and one of the bill’s sponsors. “I do, too, and the fact that these algorithms have led to an additional $136 a month in rent for renters in the Denver metro area is bad math. And we have the opportunity to do something about it, and he has the opportunity to do something about it by signing (House Bill) 1004 into law.”

Still, Gonzales and Sen. Nick Hinrichsen, a Pueblo Democrat and another sponsor, said they didn’t know if Polis would do so.

Both said they hadn’t had direct conversations with the governor or his staff about any specific objections. Playing to Polis’ support of free markets and saving people money, the two lawmakers accused landlords using algorithms of interfering with the housing market, at the cost of renters.

HB-1004 is lawmakers’ second attempt to ban the algorithms. Last year’s proposal died in the last days of the session when a group of Senate Democrats and the chamber’s Republicans voted to neuter the bill. They did so with the help of a lobbyist hired by RealPage, a software developer that owns a common rent-setting algorithm.

This year, not a single Senate Democrat voted against the bill.

Senate President James Coleman has said lawmakers were more familiar with the problem this year. With good reason: Federal and local officials have accused RealPage of using the algorithms to facilitate price fixing in the rental market, and last summer, Colorado Attorney General Phil Weiser joined a U.S. Department of Justice antitrust lawsuit against the company.

Prosecutors have accused the developer of helping facilitate a cartel-like system among large apartment owners and property managers.

RealPage has denied the allegations and has decried an “inaccurate and distorted narrative” about its software. Apartment industry officials in Colorado have defended the use of algorithms as a means to manage vacancy rates and lower prices.

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