RealPage rent-setting algorithm linked to 30-40% rent increases for US tenants
RealPage's rent-setting software, used in roughly one-quarter of U.S. multifamily housing, reportedly coordinates rent increases of 30-40% across properties by aggregating landlord data and recommending prices that are followed 90% of the time. The U.S. Justice Department and eight state attorneys general have filed an antitrust lawsuit alleging the system violates the Sherman Act, while the White House estimates renters paid an additional $3.8 billion due to this practice in 2023.
What happened
RealPage, a Texas-based company, produces rent-setting software used in roughly one-quarter of the U.S. multifamily housing sector. Landlords feed the system private data about vacancies, rental histories, and competitor pricing, and the program outputs a 'recommended' rent which is followed 90% of the time.
At Portside Towers in Jersey City, New Jersey, tenant Kevin Weller saw his rent jump $1,500 per month at lease renewal, and many neighbors faced similar hikes of 30% to 40%. Building management told him the software 'dictates the rate.'
Reported impact
The White House Council of Economic Advisors estimated that algorithmic pricing from companies like RealPage cost renters $3.8 billion in 2023 alone, an average of $70 per month nationwide. In Boston, renters paid an additional $79 per month on average, while in Jersey City, some rents increased from $4,400 to over $7,000 per month.
Index analysis
The Justice Department alleges that RealPage's software violates Sections 1 and 2 of the Sherman Act by reducing competition and monopolizing the rental pricing software market. The system's features like 'auto accept' and built-in pricing advisers push landlords to maximize rent and minimize discounts, stripping tenants of bargaining power.
Governance controls
The Justice Department, joined by attorneys general from eight states, filed an antitrust lawsuit against RealPage in federal court. The complaint alleges the software reduces independent decision-making by landlords through shared sensitive rental data used to set prices collectively.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.