RealPage Inc. is really a big name in property management software, they are just awesome. Their company is based in Texas and is mostly used for the multifamily rental market. This software is then applied by landlords to monitor various aspects of the rental operations such as tenant application processing and indeed the most insisting part of the management-preparation of a rental price, you know? Ok, that’s all well and good, but why is this Antitrust Lawsuit Realpage in the headlines recently?
Well, as you may already know, CRM is the basic feature of RealPage, AI Revenue Management (AIRM), and using YieldStar tools the property managers and landlords make more and more data-driven decisions on rental pricing whereby landlords are calling for adjusting the rate according to the market data reported by RealPage. While this is a way for the landlords to maximize their revenue, if you look at the other side, it could be raising the rents for the tenants, and that’s kinda the main concern here.
Accusations Against RealPage
You see, back in August 2024, the United States Department of Justice (DOJ) along with the attorneys general of various states came out with a lawsuit against RealPage and said that the company carried out acts that suppressed competition in the rental market. From the get-go in this case, the complaints of the DOJ state that RealPage’s software is such that it encourages landlords to set rental prices in concert leading to rent increases that are higher than what is expected in the case of a completely competitive market. Sure, the software makes it easy for users to exchange information on rents, while it also gives suggestions for uniform adjustments, which the complaint states reduce the landlord’s incentive to compete on prices and offer incentives for tenants to occupy their properties.
Apart from price analysis based on market competition, the DOJ explains that the collection of private information by RealPage, such as current rents, lease terms, and property availability, is one of the root mistakes landlords make that generate a situation for the group of them to make a price increase at the same time.
Impact on Renters and the Housing Market
You see, the Department of Justice believes that RealPage’s software is responsible for preventing price reductions of rental spaces. And how’s that? Well, access to data provided by market competitors was cited by the DOJ as a part of the software that allows landlords to base their pricing on what others are doing and avoid price reductions or discounts. And sure, in a typical competitive market of rentals, if one property suddenly lowers its rates, the other usually follows to remain attractive to the tenants, you know? But with RealPage’s influence in the picture, you see, many landlords follow the same pricing trends, reducing price variability and affordable options for renters, and that’s not really fair if you think about it for a sec.
All in all, this issue is rising alongside housing rates, which are a key topic in the U.S. Critics stated that the RealPage software contributed to the increasing rental prices consistently and that the property owners perceived these tools to be the best way of choosing a price without taking into consideration the rent discounts or waived fees that are normally provided. People are also questioning, that if this goes on and on, then it’ll certainly get harder for the tenants, and only the landlords will be making profits, which isn’t a fair game at all.
RealPage’s Response to the DOJ Lawsuit
Well, just like big corporations usually do in such lawsuits, RealPage company rejected the allegations from the DOJ that it actually falsely accused them and in fact confirmed that they are “devoid of merit”. Though, RealPage attests that it behaves plainly toward the DOJ and is amenable to potential adjustments of its software when needed.
