Recent lawsuits filed by tenants and prosecutors shed light on a concerning trend in the real estate sector. Landlords are accused of collaborating to increase rents using detailed proprietary information obtained through a software system, particularly RealPage’s YieldStar product.
The plaintiffs claim that through RealPage’s software, apartment owners share sensitive rental pricing data and occupancy rates. RealPage then processes this information using algorithms to generate rental price suggestions for landlords. These suggested prices allegedly exceed what would be expected in a competitive market.
It is alleged that a significant number of landlords adopt the recommended prices, leading to higher costs for tenants. RealPage, which is owned by Thoma Bravo, promotes its software as a tool that can help landlords outperform the market by 3 to 7 percent.
RealPage has refuted the accusations of facilitating collusion through its software. The company attributes rising rents to various economic and political factors such as a shortage of rental housing units. A spokesperson for RealPage, Jennifer Bowcock, emphasized that the lawsuits are based on a misunderstanding of revenue management software functionality. She also noted that the software often suggests rent reductions.
