The Controversy Surrounding RealPage’s Software and Rent Increases

Imagine a scenario where large landlords in your city collaborate to raise rents by utilizing detailed, otherwise private information about their competitors’ pricing strategies. This situation is not merely hypothetical; it is already unfolding, as evidenced by a series of lawsuits initiated by tenants and prosecutors across the United States. The plaintiffs contend that a real estate software platform known as RealPage is being employed by apartment owners to artificially inflate rents.

Through its YieldStar product, the Texas-based company allegedly enables landlords to share critical data regarding rental prices and occupancy rates. This information is processed through sophisticated algorithms, which then generate recommendations for what landlords should charge prospective renters. Unfortunately, the suggested figures frequently exceed what would be expected in a truly competitive market.

According to the allegations, in the overwhelming majority of cases, landlords adopt these suggested prices, consequently passing the financial burden onto tenants. The plaintiffs argue that this practice undermines fair market competition and leads to excessive rent increases.

RealPage, which is owned by the private equity firm Thoma Bravo, has firmly denied any wrongdoing, asserting that its software does not promote collusion among landlords. In a statement published on its website in June, the company attributed the nationwide rent increases to a complex interplay of economic and political factors, particularly an acute undersupply of rental housing units.

Jennifer Bowcock, a spokeswoman for RealPage, clarified via email that the lawsuits are rooted in a fundamental misunderstanding of how revenue management software operates. She emphasized that the software is designed to provide a variety of recommendations, including potential rent reductions, not solely increases.