Maya Wheeler
A resurrected proposal, based on faulty assumptions, is threatening to make Colorado’s ongoing housing crisis even worse. Rather than focusing on the root problems — outdated zoning laws and construction regulations — a misguided proposal is being floated to ban AI-based rental pricing technologies.
Colorado is no stranger to being a technology hub. In 2021, the state’s tech industry generated more than $76 billion in Gross State Product (GSP) and accounted for 9% of the state’s employment. During the last five years, the sector has added nearly 38,300 net new jobs — more than any other major industry in Colorado. Recognizing the state’s favorable environment, businesses and entrepreneurs have flocked to Colorado to take advantage of the growing opportunities.
Gov. Jared Polis and state leaders have been proactive in recognizing the importance of implementing healthy guardrails for emerging technologies like artificial intelligence (AI) to ensure their responsible use without stifling growth. Recently, Colorado has been at the forefront of efforts to establish consumer protections for AI, positioning the state to be a leader in addressing potential concerns, such as discrimination, in these technologies.
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Unfortunately, some lawmakers are steering this pro-tech momentum in a counterproductive direction. They are considering legislation that would ban AI-driven rent pricing technologies, falsely assuming property managers are using these tools to artificially inflate rental prices. Specifically, the focus has been on RealPage, a real estate software provider that suggests rent prices to property managers based on algorithmic market analysis.
This proposed legislation is based on flawed assumptions. RealPage is used in about 3 million rentals nationwide out of a total of nearly 50 million units — meaning the company’s market presence is far too small to wield any price-controlling influence.
This move is especially concerning because it could undermine Gov. Jared Polis’ broader efforts to address Colorado’s housing crisis. If such legislation passes, it could discourage investors from building more housing by limiting their access to modern, data-driven tools that help them manage their rental properties efficiently. Colorado, like many parts of the country, is grappling with a housing affordability crisis. With a shortage of more than 100,000 homes and apartments, Colorado has the second-worst deficit in the nation, trailing only California. Population growth, combined with outdated zoning laws and restrictive construction regulations, has only worsened the problem.
Rental housing experts, like economist Jay Parsons, have emphasized the gravity of the affordability issue: “There’s obviously a very real affordability crisis among lower-income renter households — for whom there’s a severe deficit of supply.” The affordability crisis is further exacerbated by economic disparities, particularly for Black Coloradans, who experience a poverty rate of 17.8%, more than double that of white Coloradans (8.1%). This disparity makes the unintended consequences of such legislation even more troubling, especially for the Black community. Instead of targeting AI rent pricing tools, lawmakers should focus on addressing the root cause of the problem: the severe housing shortage.
As a former property owner who rented out a house and a condo for several years in Colorado, I have a firsthand understanding of how essential administrative technologies are for property managers to remain competitive. These tools provide valuable insights into market demand and help keep prices aligned with current market conditions. Banning such technologies under the mistaken belief that they cause rent inflation misses the broader picture.
Gov. Polis has proposed common-sense solutions to tackle the state’s housing shortage. It is unfortunate political forces are undermining those efforts by targeting rent pricing software to make a point. Though it’s important to take a responsible approach to emerging technologies, banning data-driven tools that are used to calculate fair market prices only exacerbates the problem. Instead of blaming technology, Colorado lawmakers should focus on revising outdated construction laws and removing unnecessary barriers to development. These changes will enable the creation of more housing units and help address the growing demand for affordable homes.
In 2022, an estimated 264,500 people moved to Colorado. Many of them are from Generation Z or are part of the working-age population, seeking better opportunities in a state with a strong economy and promising job prospects. The influx of people is putting even more pressure on an already strained housing market.
If Colorado hopes to meet the demand for affordable housing that accompanies population growth, while staying competitive with other tech hubs across the country, outlawing AI-driven rent pricing is not the answer. Legislators should focus on increasing housing supply for all residents while continuing to support the growth of the state’s tech economy.
Maya Wheeler is executive director of the Wezesha Dada Center and former executive director of the African Chamber of Commerce in Colorado.
