RealPage breaks silence in response to price-fixing allegations

RealPage breaks silence in response to allegations of price-fixing by tenant groups and the U.S. Department of Justice, releasing a statement that tells “the real story.”

The statement is a response to a number of class action lawsuits filed by tenant groups against RealPage and its clients backed by the DOJ, which opened its own civil investigation in late 2022 and a criminal investigation in March. The lawsuits focus on Texas-based RealPage’s YieldStar revenue management software, which has been described as an algorithmic information exchange using non-public pricing and supply data in agreement and under trade restrictions , thus violating antitrust laws.

RealPage has remained silent since 2022, when it responded to several ProPublica articles accusing the company and its customers of using YieldStar software to inflate rental prices and engage in anticompetitive business practices.

In the current issue of Yield Pro magazine, we cover this latest attack on the nation’s rental housing providers in an article titled “Multifamily Faces Antitrust Litigation.”

RealPage and the operators who use the company’s software were ordered by their lawyers to remain silent as the media delivered an avalanche of negative press. RealPage finally spoke out when the FBI raided the offices of Atlanta-based Cortland Management on May 22 as part of its accelerated investigation, saying its primary target was RealPage.

RealPage broke its silence this week (June 18), releasing a statement pushing back against “factual inaccuracies that threaten to undermine the critical benefits that RealPage solutions provide to tenants and housing providers.” The statement is available here.

Dana Jones, CEO and President of RealPage, said in the release: “Now is the time to respond to a number of false claims regarding RealPage’s revenue management software and the way rental housing providers operate when of setting rental prices. »

She emphasizes that the extreme lack of affordable rental housing in the country should be the real priority. “(Affordability) is a national problem created by a multitude of complex economic and political forces,” she said.

It is also important to understand that the software itself is complex to use, requiring a qualified expert to manage it, and also expensive, which is why it is used only by large institutional investors.

A common misunderstanding among many people is that large institutional and corporate investors own the vast majority of rental properties in the United States and that the units are in large buildings. It’s not factual.

According to the U.S. Department of Housing and Urban Development’s Rental Housing Finance Survey, there are 49.5 million rental units nationwide. Of these, nearly 46 percent, or 22.8 million, are in buildings with one to four units, while 86.5 percent of all rental properties in the country contain only one unit.

Even though the percentage of apartments owned and operated by institutions is expected to increase over the next five years, the vast majority of them are still owned by family investors. But the media and those who attack landlords would have us believe that software used by big companies artificially keeps market rents high, while supply and demand and other complex fundamentals actually determine rents.

Although RealPage has begun to fight back, it continues to be the subject of a deluge of media articles, including a recent article in The American Prospect that accuses the company of providing “apps that charge bogus fees , monetize vacant apartments and inflate toxic products.” real estate bubbles. The bubble allegation focuses on how apartment properties are valued by looking at how much rents can be raised, saying RealPage bears at least some responsibility for the adjustable-rate loan woes hitting the market today.

Meanwhile, in his recent statement, Jones said: “Despite the noise, we will continue to innovate with confidence and ensure our solutions continue to benefit residents and housing providers. »

In the upcoming July/August issue, Yield Pro asks some of the early creators of revenue management programs to share the future of these dynamic systems. Stay tuned.