Justice Department Settlement Ends RealPage’s Rent-Setting Practices

In a significant legal development, RealPage Inc. has reached a settlement with federal prosecutors, potentially reshaping how rent-pricing software is utilized in the housing market. This comes as a response to allegations of “algorithmic collusion,” where landlords were said to use confidential data through the software to increase rents.

The Department of Justice unveiled the settlement on Monday, marking the end of an antitrust lawsuit targeting the Texas-based company. While RealPage does not face financial penalties or admit to any wrongdoing, the agreement awaits judicial approval.

The company’s software, which provides daily pricing recommendations for available apartments, has been at the center of controversy. Although landlords aren’t obligated to follow these suggestions, critics argue the software’s access to extensive confidential data may enable clients to set higher rents.

Gail Slater, the DOJ’s antitrust chief, stated, “RealPage was replacing competition with coordination, and renters paid the price,” explaining that the settlement avoids a lengthy trial.

Under the new terms, RealPage’s future use of real-time data for pricing advice is restricted. Only nonpublic data that is over a year old can now be used to inform their algorithms.

Slater further explained in a video message, “What does this mean for you and your family? It means more real competition in local housing markets. It means rents set by the market, not by a secret algorithm.”

In response, RealPage attorney Stephen Weissman expressed satisfaction with the DOJ’s willingness to settle the matter. He countered, “There has been a great deal of misinformation about how RealPage’s software works and the value it provides for both housing providers and renters.”

In recent months, several property management firms have reached settlements regarding their use of RealPage’s software. Notably, Greystar, the largest landlord in the nation, settled a class action lawsuit for $50 million and another lawsuit by nine states for $7 million.

Additionally, states like California and New York have enacted laws to limit rent-setting software, with cities such as Philadelphia and Seattle adopting similar measures.

The lawsuit also involved ten states, including California, Colorado, and Illinois, although these states were not part of the settlement announced on Monday.