Landlords across the country will face new restrictions on rental pricing software under a federal settlement with RealPage Inc., according to the U.S. Department of Justice.
The deal, announced Monday, follows a yearslong antitrust lawsuit filed during the Biden administration that accused the Texas-based company of using confidential data to help property managers keep rents as high as possible.
A judge must still approve the settlement, which does not require RealPage to pay damages or admit wrongdoing.
RealPage produces software that provides landlords with daily recommendations on the price of available apartments.
Although customers are not required to follow the proposed rates, critics say the program’s access to large amounts of non-public rental information allowed landlords to track each other’s prices and adjust rents upward incrementally.
“RealPage replaced competition with coordination, and tenants paid the price,” said Gail Slater, head of the Justice Department’s antitrust division, adding that the settlement avoids a lengthy and expensive trial.
Under the proposed terms, RealPage may no longer use real-time confidential data in generating recommendations.
All non-public information used to train the pricing algorithm must be at least one year old. Slater said this should give renters a more competitive housing market.
“What does this mean for you and your family? It means more real competition in local housing markets. It means rental prices determined by the market, not some secret algorithm,” Slater said in a video statement.
RealPage attorney Stephen Weissman said the company supports the settlement and pushes back on the way the software is characterized.
“There has been a lot of misinformation about how RealPage’s software works and the value it provides for both housing providers and renters,” Weissman said.
He argued that the company’s use of aggregated and anonymized non-public data — often lower rental figures than advertised prices — helped create “lower rents, lower vacancies and more pro-competitive effects.”
The RealPage case has sparked widespread scrutiny in the rental housing industry.
In recent months, more than two dozen property managers have reached separate settlements over their use of the software.
Among them is Greystar, the nation’s largest landlord, which agreed to pay $50 million in a class-action lawsuit and another $7 million in a case brought by nine states.
States and cities have also begun taking independent action.
California and New York recently passed laws targeting rent-setting software, and cities like Philadelphia and Seattle have passed their own ordinances restricting the practice.
Ten states – California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee and Washington – had joined the DOJ’s antitrust lawsuit.
These states were not part of Monday’s settlement.
