The majority of property managers use the software for pricing guidance and instruction.

Now legal pressures are mounting against RealPage.

Who and What Is RealPage?

RealPage run by University of Michigan alumni Dana Jones. Jones labels herself on social media as a “growth minded CEO.” 

The mother-of-two took the top position in the company in 2021. She succeeded billionaire founder Steve Winn. Winn sold the company that year for $10.2 billion to private equity firm Thoma Bravo.

Since 2021, state AGs and local prosecutors have brought civil action against RealPage. In addition, the Department of Justice has opened a criminal investigation into its software and several of their customers.

RealPage was founded in 1998 and is headquartered in Richardson. The company analyzes data supplied by landlords on apartment pricing and leasing. The company’s AI software then recommends rental unit pricing in a specific area.

It can instruct them when they should raise rent and by how much. It can also estimate the optimum prices for new properties entering the rental market.

RealPage promotes on it’s website:

“AI Revenue Management delivers data-driven AI machine learning insights for balancing supply and demand at your property and provides recommendations that optimize performance.”

The firm also notes that its pricing methodology allows landlords to outpace the market in good times and bad.

Arizona AG Kris Mayes suggested in a complaint that ‘”outpace” is code for charging prices higher than market value.

In other words, Mayes calls it, “price fixing, and it is illegal.”

RealPage also boasts that the use of its tools can yield returns that exceed the market by 2% to 5%.

Last month, North Carolina Attorney General Josh Stein announced the state was launching its own probe into RealPage,

“Companies cannot collude to illegally raise rents on tenants. My investigation into RealPage will shed light on whether this company’s operations violate the law and raise rental costs for residents.”

RealPage has denied any wrongdoing. The company is claiming instead that the use of revenue management software is well-established in various industries.

RealPage’s Mysterious Algorithm

In 2022, ProPublica published a series of stories about RealPage’s use of algorithms that helped landlords financially squeeze on tenants.

It found that the use of RealPage’s pricing software was far-reaching in some markets.

In one Seattle ZIP code, 70% of rental properties were controlled by 10 property managers. All of them used RealPage’s software in at least some of its buildings.