Washington is one of eight states to join the U.S. Department of Justice in an antitrust lawsuit filed Friday against RealPage Inc., arguing the company’s software has enabled landlords to coordinate in inflating apartment rent prices.
The suit says the company contracts with competing landlords who share “granular rental data,” including information on prices in executed leases, renewals, and inquiries and applications from prospective renters. RealPage feeds this information into its algorithmic pricing software, which produces recommendations for rent prices and other lease terms.
It adds up to a price-fixing scheme, the lawsuit argues.
“RealPage replaces competition with coordination. It substitutes unity for rivalry. It subverts competition and the competitive process. It does so openly and directly—and American renters are left paying the price,” says the complaint, filed in U.S. District Court in North Carolina.
“Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law,” said U.S. Attorney General Merrick Garland.
The lawsuit also argues that RealPage has monopolized the commercial revenue management software that landlords use to price apartments, controlling about 80% of the market.
The Texas-based company rejected the allegations and said it would defend itself.
“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the DOJ has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” Jennifer Bowcock, a spokeswoman for the company, said in a statement.
“RealPage’s revenue management software is purposely built to be legally compliant,” she added.
An estimated 800,000 leases in Washington have been priced using RealPage revenue management software since 2017, according to the state attorney general’s office. The state agency began investigating RealPage last year following reporting by ProPublica about how the company’s software could contribute to rising rents.
“RealPage colluded to fix prices and keep rents rising in order to boost profits,” Washington State Attorney General Bob Ferguson said in a statement.
The Attorneys General of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon and Tennessee also signed onto the lawsuit.
RealPage offers three revenue management systems to landlords – YieldStar, AI Revenue Management, and Lease Rent Options. The lawsuit says that the company has access to confidential information on more than 16 million rental units across the country.
“Training a machine to break the law is still breaking the law,” said Deputy U.S. Attorney General Lisa Monaco. “Today’s action makes clear that we will use all our legal tools to ensure accountability for technology-fueled anticompetitive conduct.”
— By Bill Lucia, Washington State Standard
Washington State Standard is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Washington State Standard maintains editorial independence. Contact Editor Bill Lucia for questions: info@washingtonstatestandard.com. Follow Washington State Standard on Facebook and X.
Reasons for rent increases here, rising taxes, rising insurance costs, rising labor and maintenance costs, rising utilities costs, rising legal costs because of renter protections and a ever growing amount of rules and regulations. It has become difficult for the average mom and pop so add a property management company to the cost. In today’s world you need a lot of capital to make a go so you have seen a rise in corporate ownership reducing competition add government getting involved with rental property programs and corporate overlords is about all you have left. But the problem is a computer program? Ridiculous.
Have rented at Brackett Apartment Homes 8 years and signed on for another year. My 2 bedroom apartment is now well over $1000 more than when I moved her 22 August 2016. Am retired with very limited funds., now in my mid 80s.
Real Page has been sending me the next month’s rent rate. I pay in person, rare at this development which has 686 units in 24 buildings.
I will pay rent this week, before September 1st.
My rent increase since August 1st is about $350.
There is no room for relief.
I recognize the financial strain caused by rising rents. Unfortunately, landlords are unable to shoulder the significant increases in taxes, insurance, utilities, gasoline, repair expenses, and other costs associated with overall inflation on their own.
Brian, your comments are correct. It seems there is a perception that landlords are greedy and unfair. However, landlords costs are reply rising as you point out, and they need to maintain reserves to use for maintenance and repairs. Renters can’t expect their landlords to rent at a loss. So unless some sort of governmental subsidy is available to keep rents below cost, landlords have no choice but to pass through the cost increases they are experiencing.
The ironic (and hypocritical) part is that this governor-wannabe AG condones similar tactics when its the government doing it.
As an example, the property taxes (that directly impact rent raises) use similar style databases to calculate the tax increases, which are not small. Pure speculative processes that are OK if to increase taxes, but bad if others use.
I’m curious whether rent or price control by the government worked anywhere.
Wow, talk about price fixing. Shameful.
Renters in Edmonds (especially) beware because your rents will soon be going much higher yet, if contemplated property tax increases that our city government will have to ask us to vote for, (for both fire service and digging us out of the deficit hole that bad management has caused) actually pass. These property tax hikes will be passed on to you even if you rent. The owner of a 1 million $ property will be paying anywhere from $700 to $2000 more a year in property taxes and they are not going to eat that increase just because you rent from them. They will raise your rent, so don’t vote yes just because you think us property owners will be stuck with the bill. Your landlords will raise your rent. Government rent subsidies just put more burden on actual property owners and tax payers so that is really a false solution to the high rent problem too. The law of supply and demand is pretty brutal and basically unbreakable. It’s all about fear and greed and it always will be.