Allegations of price-fixing that could amount to antitrust violations have dogged the software maker since late 2022, when ProPublica published an investigation alleging that RealPage’s software was linked to rising rents in some U.S. cities, the company using private and aggregated data provided by its customers. to offer rental prices. (In response to ProPublica’s report, RealPage said it “uses aggregated market data from various sources in a manner consistent with the law.”)
RealPage’s software is powerful because it anonymizes rental data and can provide landlords and property managers with non-public, public rental data that may be different than what is publicly reported on platforms like real estate marketplace Zillow. The company says it doesn’t set prices because landlords aren’t obligated to accept rents suggested by RealPage’s algorithm. Sometimes it even recommends that landlords reduce the rent, RealPage says. But antitrust authorities have alleged that even sharing private information through an algorithm and using it for price recommendations can be as conspiratorial as behind-the-scenes handshake deals, even if owners don’t end up renting apartments at these prices. The reported antitrust investigation is ongoing.
RealPage’s algorithmic pricing model is one of the first topics to come under scrutiny, perhaps because of its involvement in the housing sector, a necessity that has exploded in price as housing supply languishes . According to Zillow, the typical rent in the United States is just under $2,000, up from about $1,500 in early 2020. “Housing affordability is a national problem created by economic and political forces, not by the use of revenue management software,” explains Realpage. But tenants can’t know whether or not their rates are increasing because of the algorithms.
“It’s almost impossible to know whether you’re just a bystander or a victim,” says Shanti Singh, legislative and communications director for Tenants Together, a coalition of tenant activists based in California. If tenants call a hotline about a rent or fee increase, “we won’t necessarily be able to see or know that their landlord is using RealPage.”
The state of Arizona sued RealPage and nine landlords in February, claiming a conspiracy between the company and landlords led tenants in Phoenix and Tucson to pay “millions of dollars” more in rent. This followed a similar trial in Washington, DC. In the greater capital metropolitan area, more than 90 percent of rental units in large apartment buildings were assessed using RealPage software, according to the Washington, D.C. attorney general.
