DENVER — A law passed by the state legislature back in 1981 currently bans local communities in the state from enacting rent control measures; but, there is mounting pressure to revisit the law and repeal it, as Coloradans continue to face increasing costs of living.
But is that the solution or will it make matters worse?
We are going 360 on the issue, hearing from a city council representative pushing for rent control, a member of the Colorado Apartment Association who argues it could make our situation even worse, and a journalist from ProPublica whose recent reporting on rent prices has revealed how advances in technology are pushing up our rent prices even faster.
Rising rents
We first met Sarah Gardineer earlier this year. Her lease at her Arvada apartment complex was coming to an end, and she had just gotten the news: Management was demanding an increase in rent of more than 30% if she wanted to stay.
“I didn’t sleep for a week,” Gardineer laughed, recalling the ordeal. “I was feeling like, ‘Oh my gosh, how am I going to pay this?’ When I asked if there was any negotiating ability to lower the increase, I was told no, which was even more frustrating. I felt very helpless.”
To be sure, the increase Gardineer was hit with was a particularly high example—but, her story is one of countless across the Denver metro area as rents have skyrocketed. Average rent is up 12.6% year over year, according to a recent report from the University of Denver’s Daniels College of Business. It increased 5.3% just between the first and second quarters of this year.
“It just feels like I’m being pushed down and can’t really get ahead to make a life for myself,” Gardineer said, summing up the sentiments of many renters who Denver7 heard from.
There is a consistent and growing call from some residents and political leaders in Colorado to institute rent control in communities across Colorado, which would cap the increases landlords and management companies could demand from tenants.
A law passed by the state legislature back in 1981 currently bans local communities in the state from enacting rent control measures; but, there is mounting pressure to revisit the law, and repeal it.
We are going 360 on the issue, hearing from a city council representative pushing for rent control, a member of the Colorado Apartment Association who argues it could make our situation even worse, and a journalist from ProPublica whose recent reporting on rent prices has revealed how advances in technology are pushing up our rent prices even faster.
A push to help our hurting families
Obi Ezeadi ran for the Westminster City Council, he says, because the current status quo isn’t “the way it should be.” From day one on the job, housing in his community has been front and center in his mind. Very early in life, he learned personally how painful housing pressures can be.
“Many times, we didn’t know if we would have a roof over our heads,” Ezeadi said of his childhood. “That insecurity—it’s traumatic. It leaves lasting mental health traumas that don’t usually get unpacked.”
Ezeadi believes families today shouldn’t feel the same burden he's felt, and that’s why he has been outspoken for his support for rent control. Since local governments—like the Westminster City Council he serves on—can’t currently institute rent control, he’s been having conversations with the city’s attorney to see what legal options may be available. And, he’s calling on the state legislature to overturn the rent control ban.
“Speaking with residents throughout the year, [I’ve been] hearing the pain and seeing the tears,” he said. “I would love to see, in terms of restricting rents, limiting the number of times the landlord can raise rent, limiting the amount they can raise rent, [and] setting a cap based on income.”
The argument against rent control measures, fundamentally, is that rents rise due to a short supply of housing. Rent control, therefore, can remove incentives for builders to invest in new housing projects and ultimately make the problem worse. Ezeadi, though, said we must fix our current problems before addressing future concerns.
“Our residents are hurting now,” he said. “So, if this has negative impacts on long-term housing costs, then we can deal with that when we get there. But, the first thing we need to do is deal with the immediate need, and that is they need some relief.”
The other side: Rent control could make our problems worse
Drew Hamrick, a senior vice president with the Colorado Apartment Association, is one of the voices arguing against calls for rent control. If our problem is high demand and rising prices, he argues, the solution must encourage more housing being built.
“Rent control has tragically failed anywhere it’s been tried,” Hamrick said. “It has the unintended of curbing development of new units. You’ve seen that particularly dramatically in Minneapolis [and] Saint Paul, where they recently in 2021 passed a rent control local ordinance. Building permits fell by 80%.
“It also has a huge impact on how free residents are to move around… in a rent control environment, moving to a new place means you’re spending more money than staying in the existing place. You see a drastic drop in people’s mobility.”
Even if housing development increases, however, and it does in fact lead to downward pressure on rent prices, the relief for renters could be years away. The question for those opposed to rent control measures, then, is what can be done to make sure people are not priced out of their homes in the interim.
Hamrick, as a representative for the Colorado Apartment Association, offered a few suggestions.
“The things that can be done to jumpstart housing is to increase development,” he said. “So, you do that with things like tax breaks for affordable housing development; cutting property taxes for new developments is a huge issue; sales taxes, as well. Anything that puts more housing units of any type on the market will bring down the cost of housing for everyone.”
An additional 21st Century pricing pressure
To be sure, the Denver metro certainly has low rental vacancy rates: 4.76%, according to the University of Denver’s Daniels College of Business. What if, though, there’s a 21st century source whispering in the ears of property managers telling them to push rent prices higher, even if it means more empty units?
Heather Vogell, a reporter for ProPublica, came to this surprising conclusion in her extensive report that reveals how one company, RealPage, has developed an algorithm now used by property managers across the country, including Denver.
“What it does is it sucks in sometimes private information from nearby competitors, and factors that into the suggestion that it is making for the rent price,” Vogell explained. “Not just the advertised rents that you’re going to see on apartments.com, but what they have actually set their rent as. That’s information that, historically, a lot of property managers would keep very close to the vest.
“RealPage itself tells companies that use it that it will boost their revenue by 3 to 7%, and so we know that they have been saying they are able to raise the rent, to help these landlords make more money.”
The allegation being made against RealPage is that its service enables what essentially amounts to price fixing through a computer screen. The company is now facing a lawsuit accusing just that. A representative for RealPage told ProPublica the company “strongly denies the allegations, and will vigorously defend against the lawsuit.”
“The big concern here is that this software is affecting competition in these rent markets,” Vogell said. “And these are places where, you know, tenants really really depend on there being competition between landlords to help keep those prices in check.”
Following up with Sarah
As our property managers, landlords, and political leaders debate, renters are facing tough choices. We followed up Sarah Gardineer, five months after we first spoke with her about rising rents. This time, our conversation took place in a new living room, in a duplex down the street from her former apartment.
“We basically had to scramble and find a new home to live in very quickly,” Gardineer explained, saying that she and her partner decided a move would be easier than coming up with an extra $500 per month in rent.
They like their new home, she said, and things have worked out in the end—but not without a lot of stress along the way.
“I mean, it’s really overwhelming. It’s really frustrating. It makes you feel really helpless, especially when you’re trying to figure out how to pay for all the other increases in costs in your daily life, like food and gas,” she said. “If there’s anything that can be done to really alleviate those sorts of feelings, I’m definitely for them.”
