The U.S. Department of Justice announced it has settled its case against real estate technology company RealPage, which was accused of using its algorithms to allow landlords to collude on setting higher-than-warranted rent increases across the country.
The price-fixing litigation was filed under the Biden administration. The Trump administration carried the case forward and said it secured the settlement to avoid a lengthy trial process and resolve the matter more quickly. Improving housing affordability has been a major domestic policy point for the Trump administration.
The lawsuit alleged RealPage’s software let landlords set rent prices using nonpublic rent data submitted to the company, increasing perceived demand and artificially elevating market pressure. It also claimed RealPage had an illegal monopoly on multifamily property management software.
The DOJ lawsuit was initially filed along with eight states: California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington state. Illinois and Massachusetts joined later.
The complaint was amended this January to add six national multifamily property firms as co-defendants: Greystar Real Estate Partners, Blackstone’s LivCor, Camden Property Trust, Cushman & Wakefield, Willow Bridge and Cortland. Settlements were reached with Cortland and Greystar. The cases against the other companies are still active.
Under the settlement terms, RealPage must stop letting its software use nonpublic competitive information from landlords to recommend rent prices and must stop using active lease data to train its algorithms. All data used to train the software must now be at least 12 months old.
The software models will also not be allowed to assess market effects at the local level, capping assessments at the state level as its lowest degree of filtering. Features limiting rent decreases or otherwise causing landlords to align prices must also be removed.
RealPage must also stop collecting sensitive information through rental market surveys, stop discussing trends based on nonpublic information and accept a court-selected monitor.
The company will also now cooperate with DOJ in the remaining landlord cases.
A court must approve the settlement before it can take effect. (Source)
