Fintech Company RealPage Accused Of Being A Housing Cartel That Drives Up Rental Prices Across The USA
Plaintiffs in a lawsuit say Texas based fintech company RealPage allegedly created a ‘rental cartel.’
The rental cartel enabled landlords across the US to artificially drive up rental prices.
Property management firms nationwide use the software sold by RealPage. The RealPage software suggests prices landlords should charge based on availability and demand in their area.
However, plaintiffs in several states have brought lawsuits against the firm. They allege landlords share private and commercially sensitive data with the platform. Thus, landlords weaponize this information against renters to keep costs as high as possible.
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:
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,
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.
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