Senators from the United States ask the DOJ for an investigation into RealPage
Four Democratic U.S. Senators have asked for the Department of Justice to investigate whether Thomas Bravo LLC’s rental company RealPage Inc. causes rents to rise across the country via its pricing software.
In a letter addressed to Jonathan Kanter, U.S. Assistant AG General for Antitrust, Senators Elizabeth Warren and Tina Smith (Massachusetts) asked the DOJ to investigate the effects of RealPage’s YieldStar rental pricing software, on inflation and consumers.
“Given YieldStar’s market share, even widespread use of its anonymized, aggregated proprietary rental data, by the country’s largest landlords, could result in de facto price-setting, driving up renters and driving up prices,” the senators wrote in a letter.
Many of the nation’s most prominent property management companies use YieldStar software to set prices for 20 million rental units. This is roughly 8% of all homes available for rent in the U.S.
According to senators, the increase in “institutional investors” and rent-setting algorithms has weakened competition in the already tight housing market, leading to substandard services and unnecessarily expensive housing for American families.
The median asking rent in the United States has risen 26.9% to $1.322 since March 2020 when the pandemic began. This was December 2022.
The senators stated that it is essential that the department utilize all its tools to ensure renters are not effected by corporate landlords or anti-competitive forces.
“RealPage appreciates having the opportunity to work alongside the senators’ offices, and, more generally speaking, we are always open to engaging policy stakeholders to ensure an informed, comprehensive understanding of the benefits that we contribute to the rental industry,” a spokesperson for RealPage wrote in an email.
After a ProPublica investigation in October, RealPage’s software was found to be the root of rising rent problems in the country, the DOJ opened an investigation into RealPage in November 2022.
RealPage is also facing a lawsuit from renters in U.S. District Court San Diego alleging RealPage and nine major property managers in the country, including Greystar and Lincoln Property Company, Equity Residential and Mid-America, to artificially increase rents in violation federal law.
President Biden gave the DOJ the task of addressing anti-competitive information sharing in the housing market in January.
This article has been updated to include comments from RealPage.
Prices for renting