FTC Chairman, Colorado Attorney General Set to Crack Down on Corporate Renters

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During a roundtable Friday with Federal Trade Commission Chairwoman Lina Khan, Colorado Attorney General Phil Weiser pledged to work closely with federal investigators to crack down on “abusive and predatory practices” by corporate landlords — a sign that the real estate sector could soon become a bigger focus for the state’s top consumer-protection enforcer.

“We need to get the message out there,” Weiser said. “The goal is that if property owners know there are consequences for not following the law, they’ll be more motivated to follow the law.”

Khan and Weiser met with tenants and attorneys from the Community Economic Defense Project at their North Capitol Hill office in Denver, where tenants shared stories of rising rent, deteriorating living conditions and feeling helpless about who to turn to for help.

“The biggest issue we’ve been hearing about for some time now is potentially abusive practices in the real estate market, especially when it comes to tenants,” Khan said at the event.

In her speech, Khan focused on two areas of greatest concern to the FTC: hidden fees and the computer algorithms that landlords currently use to select tenants and set rent prices.

Tenants have reported an increase in mandatory maintenance fees, which aren’t always listed in leases, allowing landlords to raise them at any time. Some said their landlords are no longer accepting checks or money orders, requiring tenants to pay through phone apps and online portals that charge processing fees just to pay rent. Over the course of a 12-month lease, those fees can add up to hundreds or even thousands of dollars.

Advocates say payment portals pose a particular challenge for low-income and immigrant residents, who are less likely to have a bank that can process online withdrawals without fees.

Khan said she has heard of companies charging fees for basic services like trash pickup that were once included in the rent, calling it a “trick” to prevent tenants from finding out how much they actually owe on their apartments.

Under Khan, the FTC — which enforces federal competition and consumer protection laws — has taken a more assertive stance on antitrust, backing lawsuits against tech giants like Amazon and Google and joining Colorado in opposing the proposed merger of grocery chains Kroger and Albertsons.

Khan’s visit — her second to Colorado since she was appointed by the Biden administration in 2021 — came a day after the grocery chains announced they were putting their merger on hold amid antitrust challenges from Colorado and the FTC, which say it would reduce competition and hurt consumers.

Her aggressive approach at the FTC has won praise from critics of corporate power on both the progressive left and the populist right. But she faces an uncertain political future, no matter which party wins the White House. Most Republicans oppose her, and a major Democratic donor this week called on Vice President Kamala Harris to replace Khan as chair if she is elected president.

The theme of Friday’s event was housing — but Khan said there are also concerns about antitrust violations in the rental market.

Housing data companies RealPage and Yardi have been sued in multiple states by tenants and state attorneys general, who say their software allows competitors to collude to inflate rent prices.

“So when different landlords use the same algorithm to set rents, it can facilitate higher prices in a way that potentially violates antitrust laws,” Khan said. “Collusion via an algorithm is still collusion and should be treated as such.”

Companies and property owners who use their software have denied the accusations.

“RealPage is proud of the role our customers play in providing safe, affordable housing to millions of people,” RealPage CEO Dana Jones said in a statement posted on the company’s website last month. “Despite the noise, we will continue to innovate with confidence and ensure that our solutions continue to benefit both residents and housing providers.”

Several of the landlords named in the lawsuits also manage properties in Colorado. But the state has not taken any action on the matter, and a Democratic-led bill to ban the use of such algorithms to set rent was defeated in the state Senate this year amid opposition from landlord groups. On Friday, Weiser said his office “is open to hearing more information” about potential collusion via the algorithm and promised further scrutiny of landlords’ business practices through a newly created Civil Rights Unit in his office.

Story Type: News