The DOJ is reportedly investigating rent-setting software company RealPage


The Department of Justice’s Antitrust Division has reportedly opened up an investigation into RealPage, the real estate technology company accused of contributing to higher-than-normal rent prices. According to a report from ProPublica, the DOJ is looking into whether the company’s rent-setting software allows landlords to coordinate and raise rent across the nation.
This comes after last month’s report from ProPublica, which revealed that RealPage’s YieldStar software uses an algorithm to “help landlords push the highest possible rents on tenants.” As noted by ProPublica, YieldStar’s algorithm uses the non-public rental rates gathered from the landlords and property managers that are its clients. YieldStar then repackages that information in an anonymized form to make rental rate recommendations to its users, indirectly giving landlords access to their competitors’ pricing.
The “rate setting software essentially amounts to a cartel to artificially inflate rental rates in multifamily residential buildings”
ProPublica’s report states that the algorithm’s design has “raised questions among real estate and legal experts about whether RealPage has birthed a new kind of cartel that allows the nation’s largest landlords to indirectly coordinate pricing, potentially in violation of federal law.” These experts have also raised concerns with the RealPage user group, an online forum that lets apartment managers who use the service communicate with one another.
Rent prices have increased by 20 percent since early 2020, according to The New York Times. While data from Apartment List indicates that rental prices have decreased slightly over the past couple of months, it’s still up by 5.7 percent year over year, and a report from CNBC indicates that rent prices will continue to trend upward through 2023. RealPage is reportedly aware that its software is helping to drive up rent, ProPublica reports, and it discourages landlords from negotiating with tenants.
In 2017, the DOJ requested more information from RealPage when the company announced its plans to acquire Rainmaker Group, a competing real estate software company that created the rent-setting software, Lease Rent Options (LRO). According to ProPublica, Steve Winn, RealPage’s CEO at the time, said the $300 million acquisition would allow the service to increase the number of units it priced from 1.5 million to 3 million.
Several US lawmakers have already called on federal agencies to look into ProPublica’s findings. Senators Amy Klobuchar (D-MN), Richard Durbin (D-IL), and Cory Booker (D-NJ) wrote a letter to US assistant attorney general Jonathan Kanter, to express their concerns about RealPage, noting that the “rate setting software essentially amounts to a cartel to artificially inflate rental rates in multifamily residential buildings.” Klobuchar later sent out a tweet stating that she’s “asking the DOJ to investigate.”
Meanwhile, 17 representatives, including Jesús García (D-IL), Jan Schakowsky (D-IL), Cori Bush (D-MO), Alexandria Ocasio-Cortez (D-NY), Pramila Jayapal (D-WA), and others followed up with a letter urging the Federal Trade Commission and Department of Justice to investigate RealPage. “Our constituents cannot afford to have anticompetitive — and potentially per se illegal — practices drive up prices for essential goods and services at a time when a full-time, minimum-wage salary does not provide a worker enough money to rent a two-bedroom apartment in any city across this country,” the lawmakers wrote.
Senators Bernie Sanders (D-VT) and Elizabeth Warren (D-MA) also posed a number of questions to RealPage CEO Dana Jones last week, and are giving RealPage until December 1st to respond. Additionally, RealPage is facing a number of class action lawsuits accusing the company of raising rent. The DOJ nor RealPage immediately responded to The Verge’s request for comment.
The Department of Justice’s Antitrust Division has reportedly opened up an investigation into RealPage, the real estate technology company accused of contributing to higher-than-normal rent prices. According to a report from ProPublica, the DOJ is looking into whether the company’s rent-setting software allows landlords to coordinate and raise rent across…
Recent Posts
Archives
- February 2025
- January 2025
- December 2024
- November 2024
- October 2024
- September 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- September 2018
- October 2017
- December 2011
- August 2010