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RealPage rent-fixing lawsuit highlights use of algorithms to set rents

Matt Levin Apr 16, 2024
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"The lack of transparency encourages rents to spiral upwards," said Shanti Singh of the advocacy group Tenants Together. Joe Raedle/Getty Images

RealPage rent-fixing lawsuit highlights use of algorithms to set rents

Matt Levin Apr 16, 2024
Heard on:
"The lack of transparency encourages rents to spiral upwards," said Shanti Singh of the advocacy group Tenants Together. Joe Raedle/Getty Images
HTML EMBED:
COPY

If you want to sell a stock, you check the going rates and market movements. But if you’re a landlord who wants to rent an apartment, there’s a company for that.

The rental price of those units could be dictated by a company called RealPage, which has drawn major legal challenges over alleged rent-fixing.

​Big corporate landlords provide RealPage with data you can’t just see on Zillow — for example, the rent a tenant actually pays versus what’s advertised publicly. In return, RealPage’s algorithm says, “Hey, that two-bed apartment with off-street parking you have? Here’s what you should charge for it based on what everyone else is charging.”

RealPage is basically a cartel-enabler, per University of Wisconsin law professor Peter Carstensen.

“That information exchange in and of itself, that’s an agreement in restraint of trade,” he said.  

Arizona and Washington, D.C. have sued RealPage and the landlords that use it for wide-scale rent-fixing. RealPage did not respond to a request for comment, but the company has said in public statements that lawsuits misunderstand its algorithm.

Renters lose bargaining power when a secret algorithm sets the price, according to Shanti Singh at the advocacy group Tenants Together.

“The lack of transparency encourages rents to spiral upwards,” she said.

Two landlords accused in a class action suit of using RealPage to inflate rents have recently settled those claims.

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