Senators call on Justice Department to review Richardson-based RealPage’s role in rent hikes
Four U.S. senators are calling on the U.S. Department of Justice to investigate the role of apartment price-setting software RealPage in rent inflation nationwide.
In a letter dated March 2, Democratic senators Elizabeth Warren, Bernie Sanders, Tina Smith and Ed Markey urged the DOJ to review RealPage and its proprietary rent-setting algorithm.
The letter follows an investigation by nonprofit news site ProPublica into the Richardson-based company, which sells software to suggest prices for available units. ProPublica’s investigation found RealPage’s algorithm — which analyzes data from clients and competitors — was behind unprecedented rent hikes at many apartment complexes.
As a result of the investigation, renters filed a class action lawsuit against RealPage and nine large property managers, alleging the software allows landlords to coordinate rent pricing, ProPublica reported. The lawsuit was filed in U.S. District Court in San Diego less than a week after the investigation was published Oct. 15.
The companies named in the lawsuit are: Greystar Real Estate Partners, Lincoln Property Co, FPI Management, Mid-America Apartment Communities, Avenue5 Residential, LLC, Equity Residential, Essex Property Trust, Thrive Communities Management and Security Properties.
Four of the nine companies own more than 60 apartment complexes in and around Fort Worth, like Greystar Real Estate Partners, which owns Encore Panther Island.
The Department of Justice’s Antitrust Division opened an investigation into the company’s possible collusion with landlords in November 2022.
The senators also opened an investigation at this time, but “RealPage did not provide all of the requested information,” they wrote in the March letter.
From the available information, their investigation found that use of RealPage’s algorithm is most frequently used in regions with the highest rent increases and the greatest proportion of corporate apartment buyers.
“As institutional investors’ housing portfolios have grown, so too has their power to set rents as competition in certain housing markets dwindles,” the letter read.
The letter comes two months after President Joe Biden’s White House issued “The White House Blueprint for a Renters Bill of Rights.”
