Denver, CO — The U.S. Justice Department and state prosecutors from Colorado and nine other states have escalated their legal battle against a group of prominent landlords and RealPage, the primary supplier of rental pricing algorithms. The lawsuit alleges that these parties conspired to artificially inflate apartment rents nationwide, utilizing technology that could disadvantage tenants.
Originally lodged last summer, the case has now been broadened to include additional defendants such as Greystar, LivCor, Camden Property Trust, Cushman & Wakefield, Willow Bridge, and Cortland, all of whom operate or own significant rental properties in Colorado. According to state officials, Greystar alone manages around 45,000 units within Colorado.
Colorado Attorney General Phil Weiser, in a statement released after the amended filing, emphasized the urgency of addressing these alleged unfair practices which he claims misuse sensitive competitive information to manipulate rental prices. The objective, Weiser articulated, is to deter these corporate landlords from colluding on rental pricing and to push for a fair resolution that could potentially benefit impacted renters.
Weiser also tempered expectations regarding the timeline for relief or settlement from this litigation, indicating that legal proceedings might extend over several years. This prolonged timeframe means immediate financial relief for renters might not be imminent, despite the pressing nature of the allegations.
Compounding the issue, a recent report from the White House underscores the financial impact of such rent-setting algorithms on tenants, particularly noting that Denver renters paid an additional $136 per month. On a national scale, the excess payment attributed to algorithmic rent-setting practices amounted to approximately $3.8 billion in 2023 alone.
Defenders of these digital tools, such as Drew Hamrick, general counsel with the Colorado Apartment Association, argue that these algorithms actually foster a fair market by providing landlords with accurate, real-time data to base their rental prices on. Hamrick contends that this helps avoid both overpricing and underpricing, which can negatively impact the financial sustainability of housing providers.
Despite such defenses, criticisms persist. A legislative proposal aimed at banning the use of rent-setting algorithms in Colorado was defeated in 2024, following vigorous opposition from the Colorado Apartment Association. Yet, proponents of the ban remain hopeful that future attempts might succeed in legislative sessions to come.
As the allegations and debates continue to unfold, the impacts on both the rental market and individual tenants remain at the forefront of concerns. Legal and legislative outcomes in the near future could hold significant implications for how rental prices are set and regulated across the United States.
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