A Bill for an Act
Page 1, Line 101Concerning pricing coordination by landlords.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill prohibits:
- A landlord or an agent, a representative, or a subcontractor of a landlord from subscribing to, contracting with, or otherwise exchanging any form of consideration in return for the services of a coordinator;
- A coordinator from facilitating an agreement among landlords that restricts competition with respect to dwelling units, which includes performing a coordinating function; or
- 2 or more landlords from engaging in consciously parallel pricing coordination.
A violation is deemed to be an illegal restraint of trade or commerce and is punishable in accordance with the "Colorado State Antitrust Act of 2023".
The division of housing within the department of local affairs is required to develop and undertake a public education program designed to inform Colorado residents of the provisions of the bill.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. Legislative declaration. (1) The general assembly
Page 2, Line 3finds that:
Page 2, Line 4(a) Agreements or conspiracies between competitors to fix prices
Page 2, Line 5or other commercial terms are illegal under current Colorado law, and
Page 2, Line 6algorithmic devices have made illegal agreements more challenging to
Page 2, Line 7detect; and
Page 2, Line 8(b) In recent years, several lawsuits have been filed alleging that
Page 2, Line 9the use of algorithmic devices by landlords to set prices and other
Page 2, Line 10commercial terms in the residential housing market results in higher rents
Page 2, Line 11and constrained housing supply for residential tenants; and
Page 2, Line 12(c) A recent White House study titled "The Cost of
Page 2, Line 13Anticompetitive Pricing Algorithms in Rental Housing" estimated that in
Page 2, Line 142023, the cost to renters of anticompetitive pricing was $3.8 billion, and
Page 2, Line 15the cost to renters in the Denver metro area was the second highest of any
Page 2, Line 16metro area in the country.
Page 2, Line 17(2) Therefore, the general assembly declares that, with certain
Page 2, Line 18exceptions, the distribution and use of an algorithmic device by a service
Page 2, Line 19provider or landlord to set rents and other certain commercial terms
Page 2, Line 20regarding the occupancy of rental housing is prohibited.
Page 3, Line 1SECTION 2. In Colorado Revised Statutes, add 38-12-703 as
Page 3, Line 2follows:
Page 3, Line 338-12-703. Determination of rent amount - sale, distribution,
Page 3, Line 4and use of algorithmic devices prohibited - illegal restraint of trade
Page 3, Line 5or commerce - definitions. (1) (a) The sale or distribution for
Page 3, Line 6consideration of an algorithmic device is prohibited if:
Page 3, Line 7(I) The algorithmic device is sold or distributed with the
Page 3, Line 8intent that it will be used by two or more landlords in the same
Page 3, Line 9market or a related market to set or recommend the amount of
Page 3, Line 10rent, level of occupancy, or other commercial term associated
Page 3, Line 11with the occupancy of a residential premises; and
Page 3, Line 12(II) The device sets or recommends the amount of rent,
Page 3, Line 13level of occupancy, or other commercial term associated with
Page 3, Line 14the occupancy of a residential premises based on data ora
Page 3, Line 15formulathat is similar for each landlord.
Page 3, Line 16(b) The use of an algorithmic device by a person to set or
Page 3, Line 17recommend the amount of rent, level of occupancy, or other
Page 3, Line 18commercial term associated with the occupancy of a residential
Page 3, Line 19premises is prohibited if:
Page 3, Line 20(I) The person knew or should have known that another
Page 3, Line 21person used the algorithmic device to set or recommend the
Page 3, Line 22amount of rent, level of occupancy, or other commercial term
Page 3, Line 23associated with the occupancy of a residential premises; and
Page 3, Line 24(II) The circumstances suggest that the person adhered to
Page 3, Line 25or participated in a scheme to fix the amount of rent, level of
Page 3, Line 26occupancy, or other commercial term associated with the
Page 3, Line 27occupancy of a residential premises.
Page 4, Line 1(c) A person engaged in the business of providing
Page 4, Line 2algorithmic device services or products that are used to set or
Page 4, Line 3recommend the amount of rent, level of occupancy, or other
Page 4, Line 4commercial term associated with the occupancy of a residential
Page 4, Line 5premises shall not use nonpublic competitor data pertaining to
Page 4, Line 6residential properties in Colorado insetting or recommending
Page 4, Line 7the amount of rent, level of occupancy, or other commercial
Page 4, Line 8term associated with the occupancy of a residential premises for
Page 4, Line 9residential properties in Colorado.
Page 4, Line 10(2) A violation of subsection (1) of this section is an
Page 4, Line 11illegal restraint of trade or commerce in violation of section
Page 4, Line 126-4-104 and is punishable in accordance with the "Colorado
Page 4, Line 13State Antitrust Act of 2023", article 4 of title 6.
Page 4, Line 14(3) Notwithstanding any provision of this section to the
Page 4, Line 15contrary, a person that provides an estimated amount of rent,
Page 4, Line 16level of occupancy, or other commercial term associated with
Page 4, Line 17the occupancy of a residential premises does not use an
Page 4, Line 18algorithmic device to set or recommend the amount of rent,
Page 4, Line 19level of occupancy, or other commercial term associated with
Page 4, Line 20the occupancy of a residential premises as prohibited by
Page 4, Line 21subsection (1)(b) of this section so long as the person:
Page 4, Line 22(a) Develops the estimate using publicly available data;
Page 4, Line 23and
Page 4, Line 24(b) Makes the estimate available to the public at no cost.
Page 4, Line 25(4) Except as described in subsection (2) of this section,
Page 4, Line 26this section shall not be construed to limit or impair the
Page 4, Line 27applicability of any state or federal antitrust law. The
Page 5, Line 1prohibitions described in subsection (1) of this section apply in
Page 5, Line 2addition to, and not in lieu of, any prohibitions described in
Page 5, Line 3applicable state or federal antitrust laws.
Page 5, Line 4(5) As used in this section:
Page 5, Line 5(a) "Algorithmic device" means a device that uses one or
Page 5, Line 6more algorithms to perform calculations of data, including
Page 5, Line 7data concerning local or statewide rent amounts being charged
Page 5, Line 8to tenants by landlords, for the purpose of advising a landlord
Page 5, Line 9concerning the amount of rent, level of occupancy, or other
Page 5, Line 10commercial term associated with rental housing. "Algorithmic
Page 5, Line 11device":
Page 5, Line 12(I) Includes a product that incorporates an algorithmic
Page 5, Line 13device; and
Page 5, Line 14(II) Does not include:
Page 5, Line 15(A) A product that provides information to the public and
Page 5, Line 16not for the purpose of recommending or setting a commercial
Page 5, Line 17term by two or more persons in the same market or a related
Page 5, Line 18market, so long as the information was not trained using
Page 5, Line 19nonpublic competitor data;
Page 5, Line 20(B) A product used for the purpose of establishing rent or
Page 5, Line 21income limits in accordance with the affordable housing
Page 5, Line 22program guidelines of the state, the federal government, a
Page 5, Line 23local government, or other political subdivision; or
Page 5, Line 24(C) A multiple listing service.
Page 5, Line 25(b) "Multiple listing service" means a service available on
Page 5, Line 26equal terms to subscribers that lists properties for rent or sale
Page 5, Line 27but does not set, recommend, or provide nonpublic competitor
Page 6, Line 1data about the rent, level of occupancy, or other commercial
Page 6, Line 2term associated with the occupancy of a residential premises.
Page 6, Line 3(c) "Nonpublic competitor data" means nonpublic data,
Page 6, Line 4including information about actual rent prices, occupancy
Page 6, Line 5rates, lease start and end dates, and similar data, regardless of
Page 6, Line 6whether the data are attributable to a specific competitor or
Page 6, Line 7anonymized, that are derived from or otherwise provided by a
Page 6, Line 8person that competes in the same market, or in a related market,
Page 6, Line 9as another person.
Page 6, Line 10(d) "Nonpublic data" means information that is not widely
Page 6, Line 11available or easily accessible to the public, including
Page 6, Line 12public-facing data made available under terms of service that
Page 6, Line 13prohibit the use of that data.
Page 6, Line 14(e) "Rent" means the total amount of rent, including
Page 6, Line 15concessions and fees, that a residential tenant is required to
Page 6, Line 16pay pursuant to a rental agreement.
Page 6, Line 17SECTION 3. In Colorado Revised Statutes, add 6-4-123 as
Page 6, Line 18follows:
Page 6, Line 196-4-123. Pleading standards.A plaintiff plausibly pleads a
Page 6, Line 20violation of section 6-4-104 if the complaint contains factual
Page 6, Line 21allegations demonstrating that the existence of a contract,
Page 6, Line 22combination in the form of trust or otherwise, or conspiracy in
Page 6, Line 23restraint of trade or commerce is among the realm of plausible
Page 6, Line 24possibilities. A plaintiff need not allege facts tending to
Page 6, Line 25exclude the possibility of independent action.
Page 6, Line 26SECTION 4. Act subject to petition - effective date -
Page 6, Line 27applicability. (1) This act takes effect at 12:01 a.m. on the day following
Page 7, Line 1the expiration of the ninety-day period after final adjournment of the
Page 7, Line 2general assembly; except that, if a referendum petition is filed pursuant
Page 7, Line 3to section 1 (3) of article V of the state constitution against this act or an
Page 7, Line 4item, section, or part of this act within such period, then the act, item,
Page 7, Line 5section, or part will not take effect unless approved by the people at the
Page 7, Line 6general election to be held in November 2026 and, in such case, will take
Page 7, Line 7effect on the date of the official declaration of the vote thereon by the
Page 7, Line 8governor.
Page 7, Line 9(2) This act applies to conduct occurring on or after the applicable
Page 7, Line 10effective date of this act.