Last week, the Department of Justice and eight other states sued software company RealPage for its alleged efforts to decrease competition among landlords and collude on prices in the rental housing market. The legal complaint filed includes shocking new details that confirm what many have suspected: RealPage’s algorithm has fueled high rent prices. You can read the full complaint here.
Groundwork Collaborative’s Executive Director Lindsay Owens released the following statement in reaction to the complaint:
“RealPage has been inflating rents by effectively stifling competition throughout the country. The lawsuit shows their efforts were flagrant, far-reaching, and deliberate. If RealPage is not stopped, it will soon be in more markets, driving up rent for more families.
“It’s time to shut it down.”
Email press@groundworkcollaborative.org to speak with one of Groundwork’s experts about algorithmic pricing.
KEY DETAILS ABOUT REALPAGE
- RealPage’s tactics were not restricted to software. They held in-person meetings where users of the software, corporate landlords in most cases, heard lectures about the need to “push up new and renewal pricing.”
- While pricing recommendations by RealPage were not binding, any rejection of a recommendation was escalated to an employee within RealPage. Afterwards, a “pricing advisor” would reach out to property managers and landlords to push them to take the recommendation.
- A team of RealPage staff place tens of thousands of calls every week to landlords across the country to gather nonpublic information on rent prices, occupancy rates, lease terms, and more.
- RealPage software includes an “auto accept” feature so its recommendations for property managers are not ignored or rejected.
- RealPage uses a price floor for rentals using nonpublic information so none of their users drive prices down.
- Maurice Stucke, a law professor at the University of Tennessee, estimates that 30 to 60 percent of multifamily-building units are priced using RealPage in more than 40 housing markets across the country.
