The Department of Justice has sued real estate technology company RealPage for allowing landlords across the country to use its software to illegally raise rents for their tenants.
The shocking lawsuit, filed jointly by eight states – California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington – alleges that RealPage helped landlords fix prices, inflating monthly rents for millions of tenants.
The Justice Department pointed to comments from RealPage executives that showed the company was aware it was lessening competition in the rental housing market.
“It’s in everyone’s interest to succeed, rather than trying to compete with each other in a way that actually undermines the entire industry,” one executive said, according to the Justice Department.
The software system, called YieldStar, is designed to help property managers and landlords maximize revenue by using advanced algorithms and data analytics to determine optimal rents for apartments and other rental properties based on factors such as market trends, demand, occupancy rates and competitor pricing.
The Justice Department alleges that landlords are secretly sharing information generated by the software in order to set rents higher than the competitive market.
Jennifer Bowcock, a spokesperson for RealPage, said: He told the New York Times The company says its software is “built for compliance purposes.”
The Post has reached out to RealPage for comment.
RealPage also faces federal charges that it illegally monopolized the U.S. market for multifamily property management software.
“Americans should not have to pay higher rent because companies collude with landlords to find new ways 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 major property management companies, alleging that they used pricing software to inflate rents in violation of federal antitrust laws.
The two apartment complex owners and operators agreed to settle the lawsuit in February. RealPage has denied any wrongdoing.
RealPage was founded in 1998 by businessman and entrepreneur Steve Winn, who wanted to build a platform that would use software and data analytics to streamline the property management process.
Wynn grew the company and took it public on the Nasdaq index in 2010. In 2021, Wynn sold RealPage to private equity giant Thoma Bravo for $10.2 billion in an all-cash deal.
With post wire
