Gov. Jared Polis vetoed legislation Thursday that would have banned the use of rent-setting algorithms in Colorado, allowing the continued use of software that investigators have said enables price-fixing and that the Biden White House said costs Denver tenants $1,600 in additional rent each year.
In his veto letter for House Bill 1004, Polis wrote that he had “grave concerns about prohibiting companies using algorithmic pricing software derived from multiple data sources from doing business in Colorado.”
He suggested that the use of rent-setting algorithms, which are currently being challenged in court by Colorado’s attorney general and the U.S. Department of Justice, may already be illegal and that he prefers to wait until the court cases “run their course.”
The vetoed bill essentially targeted RealPage, the software developer of a prominent rent-setting algorithm and the subject of federal and state lawsuits over alleged collusion. The company’s tool allows landlords to plug information like rents and occupancy limits into an algorithm, which returns a recommended rent, according to a 2022 ProPublica investigation.
The investigative outlet quoted company executives celebrating how the software had enabled rent increases above what property managers would have otherwise charged.
Late last year, the Biden White House found that Denver-area renters who lived in apartments that used RealPage’s software paid more than $1,600 more than their peers every year. That was the second-highest price disparity of the 20 major metro areas included in the study.
“Governor Polis had the opportunity to save Coloradans money, but instead aligned himself with tech companies currently facing litigation from the federal government and multiple states,” Sen. Julie Gonzales, one of the sponsors of HB 1004, said in a statement Thursday.
RealPage has denied allegations that it has enabled price-fixing or otherwise broken the law. In a statement Thursday night, spokeswoman Jennifer Bowcock said the company applauded Polis’ “courageous leadership in doing the right thing and vetoing HB25-1004.”
“This is the right outcome for all of us who desire a healthy housing ecosystem that benefits Colorado renters and housing providers alike,” she wrote. “We want to thank Governor Polis and the broad array of supporters of housing affordability who instead advocated for the responsible use of technology and tools like RealPage’s algorithmic pricing software to find fair pricing, ultimately benefiting all Coloradans.”
The Justice Department and Colorado Attorney General Phil Weiser are suing the company and several large landlords for allegedly establishing a cartel-like system to drive up rent prices by sharing confidential information. In his veto letter, Polis said he would support strengthening the state’s anti-trust laws — which RealPage and landlords are accused of breaking — in a “non-product specific way.”
HB 1004’s Democratic sponsors and supporters blasted Polis’ veto Thursday.
Rep. Steven Woodrow, a Denver Democrat who sponsored a similar bill last year, said it was “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.”
“I hope the candidates for governor are prepared to state on record whether they’ll sign this bill when it comes before them,” Woodrow said in a text message. “Voters deserve to know who their elected officials really work for.”
Still, the veto wasn’t unexpected. Polis’s office had signaled skepticism to the bill throughout the session. When asked about his position, the governor’s office would only evasively say that Polis “likes math.”
The bill was a priority of the House Democratic caucus and had been highlighted throughout the session as an example of their efforts to take on the state’s affordability crisis. Sam Gilman, the CEO of the Community Economic Defense Project, which supported the bill, said Polis rejected “the most meaningful legislation we had to lower costs for renters.”
Polis said he may potentially support a more limited bill next year. If sponsors bring the bill again, it will be the third time they’ve sought to ban the algorithms in as many years. A first attempt died last year after a group of moderate Senate Democrats joined with Republicans to neuter the bill at the behest of RealPage’s lobbyist.
The veto, one of four announced Thursday evening, is already Polis’s 11th of the year. The total vetoes in 2025 now surpass his record of 10 in 2023.
It’s also one of several rejections this year that has an explicit pro-tech lean: He previously vetoed a bill to more tightly regulate social media companies and another that would’ve added new safety requirements for Uber and Lyft drivers.
The other three bills vetoed Thursday sought to require that licensed drivers ride in and monitor autonomous commercial vehicles; eliminate copayments for health services in state prisons; and stop surprise bills from ambulance services not covered by passengers’ health insurance.
Polis wrote that House Bill 1122, the requirement for commercial driver’s license holders to ride in autonomous commercial vehicles, would “effectively create a first-in-the-nation prohibition on autonomous commercial vehicle testing and operations.”
He wrote in his veto letter that Colorado had already passed a law in 2017 addressing the nascent technology “which set the gold standard for autonomous vehicle regulation.” That law created a multi-agency oversight process while “establishing a path forward for new technological innovation in Colorado,” Polis wrote.
HB 1122 passed both legislative chambers with large bipartisan majorities.
House Bill 1026 would have repealed $5 copayments charged to inmates in state prisons for health care services sought by the inmates. The bill would have also prohibited the state Department of Corrections from charging fees to inmates who failed to appear for their appointments.
In his veto letter, Polis wrote that “the changes directed by this bill reflect a degree of micromanagement of DOC operations that I cannot support, and are better addressed through internal policy changes.”
Polis wrote that he agreed with the bill’s sponsors that inmates are “ill-positioned to afford copay obligations.”
In concurrence with the veto, he signed an executive order on Thursday requiring the department to reduce the copayment costs and update the list of services for which the department waives the charges. The changes should be finished by Aug. 1, according to the executive order.
The bill passed both chambers on a party-line vote.
House Bill 1088 sought to add transparency requirements for ambulances and set reimbursement rates for out-of-network services. HB 1088 also would have prohibited out-of-network ambulance services from charging individuals for costs that would have otherwise been covered by their insurance.
Polis noted in his veto letter that surprise bills “can be devastating to Coloradans’ personal finances” and that the bill would have helped make sure people didn’t hesitate to call 911.
But Polis vetoed the legislation due to a mix of drafting errors in the bill that made it “unimplementable” and estimated increases to insurance premiums of $2.15 per month per person, he wrote. He urged sponsors to continue to work on the issue.
“I am committed to working with proponents and sponsors to protect Coloradans from surprise bills, but I encourage all parties to work towards a more reasonable reimbursement rate that mitigates premium impacts and nets a better deal for Colorado families,” Polis wrote.
The bill passed both chambers unanimously.
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