RealPage Sued Again Over Rent Hikes, ‘Illegally Set Prices’

Rental costs are excessive throughout the USA, however the motive could not simply be demand or inflation. In accordance with lawsuits filed throughout the nation, together with one filed most lately in Arizona, a pricing algorithm could also be in charge.

On Wednesday, Arizona Lawyer Basic Kris Mayes filed a lawsuit towards RealPage, a $9 billion software program firm that provides landlords pricing suggestions in 4.5 million housing items throughout the U.S.

Mayes alleged that landlords labored with RealPage and 9 different property administration corporations listed as co-defendants to suppress competitors and basically create a “rental monopoly” in Arizona’s largest cities — inflicting households to see 30% to 76% hire will increase inside six years within the course of.

For context, the common month-to-month hire for a 2-bedroom house was $1,013 overall within the U.S. in January 2017, in accordance with Statista estimates. By November 2023, that common had grown to $1,317, a couple of 30% improve. A 76% hire improve nationwide would have made the common hire $1,782.88.

In accordance with the Arizona Lawyer’s Workplace, RealPage “used its income administration algorithm to illegally set costs” for the community of landlords who used its providers.

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^{Arizona Lawyer Basic Kris Mayes. Picture by Mario Tama/Getty Photos}

“They weren’t competing in any respect,” Mayes said. “They had been colluding with each other. Utilizing this delicate knowledge RealPage directed the rivals on which items to hire, when to hire them, and at what worth. This was not a good market at work, this was a hard and fast market.”

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Mayes is not the primary to voice considerations towards RealPage or to take authorized motion towards the corporate.

Earlier this month, D.C. Lawyer Basic Brian Schwalb also brought a lawsuit towards RealPage for over 50,000 D.C. residences utilizing the corporate’s software program that allegedly charged inflated rents for years.

“Landlords are compelled, beneath the phrases of their settlement with RealPage, to cost what RealPage tells them,” Schwalb told CNBC on the time.

Although RealPage told the outlet that its clients aren’t required to make use of the hire will increase its algorithm recommends, a 2022 investigation by ProPublica revealed that landlords accepted as much as 90% of the algorithm’s ideas.

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Renters in San Diego, California first filed a federal lawsuit towards RealPage in 2022. RealPage’s legal professionals and different defendants said in response on the time that customers weren’t obligated to observe its software program and that the truth that RealPage and different co-defendants took half in on-line teams and associations “doesn’t suggest collusion.”

Since then, over 20 lawsuits on the difficulty from defendants in several cities, together with Seattle, Boston, and New York, were merged into a complaint in a Nashville federal courtroom final 12 months. The most recent filings from Arizona and D.C. join the wave of antitrust complaints RealPage faces throughout the nation.

The rulings on these circumstances might ship ripple results all through the U.S. by affecting how landlords set rents. Multifamily funding advisor Tony Konstant wrote {that a} judgment might set a precedent for what sort of software program is allowed and what is not, and forestall the longer term misuse of know-how that would probably be anticompetitive.