The Justice Department has sued real estate tech firm RealPage for allegedly allowing landlords to use its software to illegally collude to raise rents for tenants nationwide.
The bombshell lawsuit — filed jointly with eight states: California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington state — alleges that RealPage helped landlords fix prices that jacked up monthly rents for millions of tenants.
The Justice Department points to statements by RealPage executives that it says show they realized they were helping to dampen competition in the rental housing market.
“There is greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down,” one executive said, according to the Justice Department.
The software system, YieldStar, was designed to help property managers and landlords maximize revenue by using advanced algorithms and data analytics to determine optimal rent prices for apartments and other rental units based on factors such as market trends, demand, occupancy rates and competitor pricing.
The Justice Department is alleging that landlords are secretly sharing the information produced by the software in order to set rent prices higher than what they would be in a competitive market.
Jennifer Bowcock, a spokesperson for RealPage, told the New York Times that the company’s software was “purposely built to be legally compliant.”
The Post has sought comment from RealPage.
RealPage is also being accused by the federal government of illegally monopolizing the market for property management software for multi-family dwellings in the US.
“Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law,” Attorney General Merrick Garland said in a statement.
In October 2022, tenants filed a class-action lawsuit against RealPage and several large property management companies that were accused of using the pricing software to drive up rents in violation of federal antitrust laws.
In February this year, two companies that own and operate multifamily residential properties agreed to settle the claims. RealPage has denied any wrongdoing.
RealPage was founded in 1998 by businessman and entrepreneur Steve Winn, who sought to create a platform that would streamline property management processes through the use of software and data analytics.
Winn grew the company before taking it public in 2010, when it was listed on the Nasdaq index. In 2021, Winn sold RealPage to private equity giant Thoma Bravo in an all-cash deal valued at $10.2 billion.
With Post wires
