Landlords nationwide will face new limits on rent-pricing software under a federal settlement with RealPage Inc., according to the U.S. Department of Justice.
The agreement, announced Monday, follows a yearlong antitrust lawsuit filed during the Biden administration accusing the Texas-based company of using confidential data to help property managers keep rents as high as possible.
A judge must still approve the settlement, which does not require RealPage to pay damages or admit wrongdoing.
RealPage produces software that gives landlords daily recommendations on how to price available apartments.
While clients are not required to follow the suggested rates, critics say the program’s access to large amounts of nonpublic rent information effectively allowed landlords to track each other’s pricing and adjust rent upward in step.
“RealPage was replacing competition with coordination, and renters paid the price,” DOJ antitrust chief Gail Slater said, adding that the settlement avoids a lengthy and expensive trial.
Under the proposed terms, RealPage will no longer be allowed to use real-time confidential data when generating recommendations.
Any nonpublic information used to train its pricing algorithm must be at least a year old. Slater said this should give renters a more competitive housing market.
“What does this mean for you and your family? It means more real competition in local housing markets. It means rents set by the market, not by a secret algorithm,” Slater said in a video statement.
RealPage attorney Stephen Weissman said the company supports the settlement and pushed back on how the software has been characterized.
“There has been a great deal of misinformation about how RealPage’s software works and the value it provides for both housing providers and renters,” Weissman said.
He argued that the company’s use of aggregated and anonymized nonpublic data — often rent figures lower than advertised prices — helped create “lower rents, less vacancies, and more procompetitive effects.”
The RealPage case has prompted widespread scrutiny across the rental housing industry.
In recent months, more than two dozen property management companies have reached separate settlements over their use of the software.
Among them is Greystar, the nation’s largest landlord, which agreed to pay $50 million in a class-action lawsuit and another $7 million in a case brought by nine states.
States and cities have also begun taking independent action.
California and New York recently enacted laws targeting rent-setting software, and cities such as Philadelphia and Seattle have passed their own ordinances restricting the practice.
Ten states — California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee and Washington — had joined the DOJ’s antitrust lawsuit.
Those states were not part of Monday’s settlement.
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