Jared Polis Angers Renters After Veto of Colorado Rent Algorithm Ban

Colorado Governor Jared Polis vetoed a bill designed to ban rental price-setting software that uses private data and secret algorithms.

The bill passed on party lines with every Democrat legislator in the state voting in favor — but Polis, ostensibly a Democrat himself, didn’t agree.

“If signed today, this bill may have unintended consequences of creating a hostile environment for providers of rental housing and could result in further diminished supply of rental housing based on inadequate data,” Polis said in his May 29 veto letter. “The cost of rent is already too high.”

But rent being too high is exactly why the bill’s sponsors — senators Julie Gonzales and Nick Hinrichsen and representatives Steven Woodrow and Javier Mabrey — pushed for House Bill 25-1004.

In Denver, the Biden Administration estimated that Real Page, one of the most notorious rental algorithm software providers, cost the average renter around $136 per month. The FBI and the U.S. Department of Justice investigated the company last year for breaching antitrust law in the course of collecting data on rents and telling landlords nationwide what they should charge. State Attorney General Phil Weiser has also sued Real Page over its allegedly abusive practices.

The bill attempted to address the issue by prohibiting the sale or distribution of algorithmic devices that will be used by multiple landlords in the same market to set or recommend the amount of rent or level of occupancy for residential properties. Landlords woud have also been banned from using algorithmic devices if they should reasonably know another entity used the same device or that the device uses a scheme to fix rent.

“This is a secretive formula,” Hinrichsen said in a May 30 press conference condemning the veto. “You can no more identify the price fixing in real time with confidence and accuracy than you can identify insider trading.”

All the bill’s sponsors except Mabrey attended the press conference, saying they are frustrated that Polis has constantly touted his efforts to save people money but wouldn’t support HB 1004.

“We've heard time and time again that Coloradans are struggling with the increasing cost of living, and this bill was rooted in working to ensure that all companies are playing by the rules and that hidden algorithms weren't acting in an invisible, collusive manner to drive up rents,” Gonzales said. “It's not just bad math, it's also a failure of our values and a failure to actually respond to what voters have been begging us for.”

Woodrow shared that the makers and sellers of the algorithms most loudly encouraged Polis to veto the bill, including Real Page. Corporate landlords and property management groups were also in opposition.

“At the end of the day, this was a choice between big corporate interests and the most financially insecure neighbors that we have and community members among us, and the governor chose large corporate interests,” Woodrow said. “It's not the first time this veto season, we'll call it, that this has happened. It's an unfortunate trend.”

Polis has vetoed eleven bills this session, including many bills related to regulating big companies. Along with the rent algorithm bill, Polis vetoed a bill related to social media guardrails for youth, a bill related to strengthening labor unions, and a bill that would have made rideshare companies like Uber implement stricter safety measures in response to women being sexually assaulted by rideshare drivers. The governor also vetoed a bill that would have ensured patients received no surprise “balance bills” after seeking ambulance care, a measure that received unanimous approval across the asile.

“When we have a governor who is choosing to side with tech bros instead of working Coloradans, it’s a sad day in the state of Colorado,” Gonzales concluded.

The Community Economic Defense Project was one advocacy group that pushed for the bill. During the press conference, CEDP co-founder Sam Gilman said that with Congressional Republicans putting forward a federal budget proposal that would cut funding for housing vouchers, food assistance, and health care, the situation is about to get much worse in Colorado.

“In this moment of federal retreat, Colorado must step up to protect those most vulnerable to rising costs,” he argued. “Instead, yesterday, Governor Polis vetoed HB 25-1004. …Unfortunately, the veto sends this devastating message that corporate landlords can keep using secret price-fixing algorithms to take extra rent from the people who have the least.”

But Polis didn’t see it that way, writing in his veto letter that while he agrees collusion leading to artificially increasing costs is wrong, the Colorado Antitrust Act already prohibits that activity. He said he is open to working with the bill sponsors to increase resources to enforce the antitrust act in a “non product-specific way.”

“While I prefer to wait for current state and federal investigations to run their course — including those Colorado is a party to — I am potentially open to supporting a bill next year that addresses the goals of HB 25-1004 and makes a distinction between collusive and non-collusive uses of nonpublic competitor data,” Polis added.

However, that distinction was already made in this year’s version of the bill, which was amended to explicitly allow landlords to use publicly available information to compute rents but bans using private information to do so.

“Our sponsors and the team at [United for a New Economy] and CEDP worked tirelessly to ensure that we got that right, and had assurances from so many actors in the industry that the compromises and nuances that were addressed did address all their concerns,” Hinrichsen said. “So to see that brought up with zero specifics and zero proposals for what that might somehow look like, in addition to what was already done, is really disheartening.”

Gonzales put it more bluntly: “If he was open to signing that bill, he should have signed House Bill 1004.”

Woodrow, who's also a lawyer, took issue with Polis’s preference for letting courts sort things out. He pointed out that court cases and litigation often take years to reach fruition, while Coloradans are experiencing housing insecurity now.

The bill sponsors want to make sure those who are struggling know exactly who is to blame.

“If your rent increases over the coming year, remember that Democrats in the legislature passed a bill to end these collusive and hidden practices, but Governor Polis vetoed that bill that would have saved you money on your rent,” Gonzales said.