RealPage Says Rental Pricing Tech Is Misunderstood, but Landlords Aren’t So Sure

Yardi Systems, another US property management company, is also facing a class action suit regarding antitrust violations for artificially inflating rent prices. The company has said it did “nothing illegal,” as it does not mandate rent prices through its software or make “collusive pricing decisions.”

Typical rental costs in Phoenix have increased by more than about $500 a month from April 2020 to 2024, and by around $400 in Washington, DC, in the same period, according to Zillow.

Renters have also filed numerous class action suits against RealPage and property owners that have been consolidated. Some landlords named in those settled claims earlier this year. The court threw out a lawsuit regarding price fixing for student housing but has said the class action from renters can go forward. Attorneys representing some of the plaintiffs in the class action did not respond to requests to comment.

RealPage laid off about 4 percent of staff in June. “RealPage is hyper-focused on innovation and accelerating its business growth in 2024 and beyond, and as a result has made the decision to eliminate a small number of roles within the company,” Jennifer Bowcock, a spokesperson for the company, says. The layoffs were not connected to the antitrust lawsuit, she says. Thoma Bravo, the owner of RealPage, did not respond to a request for comment for this story.

As of 2020, RealPage said it was collecting data on some 16 million rental units across the US. There are 44 million renter households in the US, and nearly 22 million rental units are owned by for-profit businesses. RealPage grew when it acquired Lease Rent Options (LRO) in 2017, after clearing antitrust scrutiny by the Justice Department. The DOJ did not comment on questions from WIRED about its reported investigation into RealPage or its approval of RealPage’s acquisition of Lease Rent Options in 2017.

When asked about the latest in the probe, RealPage referred to a portion of its recent lengthy statement, which said: “The DOJ extensively reviewed LRO and YieldStar in 2017, without objecting to, much less challenging, any feature of the products.” RealPage also says that its “products are fundamentally the same today” as they were when the acquisition received approval.

In June, The New York Times asked assistant US attorney general Jonathan Kanter, the Justice Department’s top antitrust official, if he would view an AI tool communicating pricing information as the same as humans colluding, with the question referencing the reported RealPage investigation. Kanter replied: “I often say that if your dog bites somebody, you’re responsible for your dog biting somebody. If your AI fixes prices, you’re just as responsible.”

The Justice Department also last year filed a statement of interest in the RealPage combined class action lawsuit, as the case could become a precedent setter in algorithmic pricing. The statement mirrored Kanter’s argument that the method of price setting doesn’t matter, and algorithms are just the latest evolution in information gathering and sharing.

“In-person handshakes gave way to phone and fax, and later to email. Algorithms are the new frontier,” the Justice Department argued in a statement of interest it filed in the class action lawsuit against RealPage and landlords. “And, given the amount of information an algorithm can access and digest, this new frontier poses an even greater anti-competitive threat than the last.”