DOJ Sues RealPage for Alleged Rent Collusion Scheme
The U.S. Department of Justice (DOJ) filed a lawsuit against RealPage on Friday following a two-year investigation that uncovered a rent collusion scheme. The DOJ accused RealPage, a Richardson, Texas-based company that sells real estate software, of stifling competition among landlords and artificially inflating rents for millions of tenants nationwide.
Attorney General Merrick B. Garland stated in a press release that RealPage’s pricing algorithm enabled landlords to share confidential information and coordinate rent prices, which ultimately harmed American renters. The DOJ’s 115-page complaint, filed in the U.S. District Court for the Middle District of North Carolina, detailed how RealPage collected sensitive data from competing landlords and used an AI-driven algorithm to recommend rental prices and lease terms.
RealPage allegedly enforced its recommendations by sending pricing advisors to meet with landlords for “accountability conversations” and implementing an “auto-accept” feature for price increases. In 2020, the company boasted that its software gathered data on 16 million rental units across the U.S., demonstrating its significant impact on the rental market.
Assistant Attorney General Jonathan Kanter emphasized that competition, not RealPage, should dictate rental prices to ensure fair housing affordability. The DOJ’s lawsuit included support from the attorneys general of multiple states, including North Carolina, California, Colorado, Connecticut, and others.
RealPage responded to the lawsuit by disputing the claims and stating that the allegations were baseless and would not benefit housing affordability. The American Economic Liberties Project (AELP) supported the DOJ’s actions, highlighting RealPage’s own marketing materials that boasted about seizing every opportunity to raise prices.
Ultimately, the DOJ’s lawsuit against RealPage sheds light on the importance of fair competition in the rental market and the need to protect American renters from collusion schemes that artificially inflate rents.