Bill to Prevent Price Gouging on Rent After a Disaster Clears Committee

Legislation aims to address alarming rent hikes after a disaster declaration, such as the Marshall Fire

DENVER, CO – The Senate Local Government & Housing Committee today passed a bill that would protect Coloradans who live in an area affected by a disaster from excessive rent increases 

HB24-1259 would prohibit rental price gouging for two years after a disaster declaration issued by the Governor or the U.S. President, where the disaster reduces the availability of housing. Rent increases would be capped at the percentage of the rent increase for the prior year or 10 percent compared to the unit’s rent immediately before the disaster, whichever is greater.

“After the Marshall Fire, hundreds of Coloradans were displaced and increased demand and insurance money flooding into the market caused area rents to skyrocket," said Cutter. "As climate changes causes an increase in natural disasters, it's critical that we take care of people impacted and build more resilient structures and communities. Allowing price gouging to unrealistically inflate rents hurts communities and impedes the return to normalcy. This bill puts reasonable guardrails in place."

The bill would make it a deceptive trade practice to price gouge when providing rental housing during the two-year period, allowing the Attorney General or a district attorney to pursue enforcement actions, including civil penalties, under the Colorado Consumer Protection Act. Affected tenants would also be able to pursue civil action for violations.

While homeowners insurance policies cover up to two years of rent for people whose homes are uninhabitable, people who were renting prior to a natural disaster don’t have this support. In the year after the devastating Marshall Fire, a report showed many impacted residents saw their rents increase 30 to 50 percent.

The bill now heads to the Senate floor. Follow its progress HERE.