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HOUSING WATCH - Housing Is A Human Right has found that RealPage, a controversial Big Tech company based in Texas, shelled out an eye-popping $500,000 to kill the expansion of rent control in California. RealPage has come under intense media scrutiny after ProPublica found that the company’s software helps landlords charge wildly inflated rents.
Soon after that investigation was published, Housing Is A Human Right examined California campaign finance filings, finding that RealPage contributed $500,000 to stop Proposition 10 in 2018, but the money wasn’t spent. That contribution was then used to kill Proposition 21 in 2020. Both initiatives would have ended statewide rent control restrictions.
On October 15, ProPublica published an explosive report titled “Rent Going Up? One Company’s Algorithm Could be Why.” It examined the nationwide impacts of YieldStar, a software program owned by RealPage and used by the real estate industry to set inflated rent prices for apartments.
“The software’s design and growing reach have raised questions among real estate and legal experts about whether RealPage has birthed a new kind of cartel that allows the nation’s largest landlords to indirectly coordinate pricing, potentially in violation of federal law,” wrote ProPublica reporter Heather Vogell.
She continued: “Experts say RealPage and its clients invite scrutiny from antitrust enforcers for several reasons, including their use of private data on what competitors charge in rent. In particular, RealPage’s creation of work groups that meet privately and include landlords who are otherwise rivals could be a red flag of potential collusion, a former federal prosecutor said.”
Vogell added, “At a minimum, critics said, the software’s algorithm may be artificially inflating rents and stifling competition.”
She also noted that “at times [RealPage] has appeared to urge apartment owners and managers to reduce supply while increasing price,” a cutthroat strategy that was executed by Camden Property Trust CEO Ric Campo. “The net effect of driving revenue and pushing people out was $10 million in income,” he told a trade publication. “I think that shows keeping the heads in the beds above all else is not always the best strategy.”
RealPage has an enormous, global influence on the rental housing market: the company “serves over 19 million units worldwide from offices in North America, Europe, and Asia,” according to its website.
In the U.S., Realpage has offices in Northport, Alabama; Irvine and San Diego, California; Lombard, Illinois; Boston; New York City; Charlotte and Raleigh, North Carolina; Bend, Oregon; Philadelphia; Greenville and West Columbia, South Carolina; Richardson and Waco, Texas; and South Burlington, Vermont.
Outside the U.S., the Big Tech firm has offices in Barcelona, Spain; Cebu City and Pasig City, Philippines; Hyderabad, India; London; and Medellin, Colombia.
Housing Is A Human Right and other housing justice groups have long said that corporate landlords’ predatory practices and excessive rents have fueled the housing affordability and homelessness crises in the United States – and that Big Real Estate must be reined in by passing rent control.
In 2018 and 2020, Housing Is A Human Right and its parent organization, AIDS Healthcare Foundation, sought to end statewide rent control restrictions in California through Prop 10 and Prop 21, respectively. The initiatives were supported by a broad coalition of housing justice groups, social justice organizations, labor unions, and prominent politicians, such as U.S. Sen. Bernie Sanders. But Big Real Estate spent nearly $200 million to successfully defeat both measures.
The ProPublica report cited Greystar, the nation’s largest property management company, and Camden Property Trust, a real estate investment trust, as two prominent users of RealPage’s YieldStar. Unsurprisingly, Greystar and Camden Property Trust also shelled out tens of thousands in campaign cash to kill California’s Prop 10 and Prop 21, according to state filings.
And RealPage took part in Big Real Estate’s multi-million-dollar effort to crush activists and labor unions. The Big Tech firm delivered $500,000, in 2018, to defeat Prop 10, but that money wasn’t spent. The $500,000 contribution was then used, in 2020, to stop Prop 21. Clearly, RealPage saw the initiatives as serious threats to its growing profits.
Interestingly, Big Tech and its statewide lobbying organization, California YIMBY, refused to endorse Prop 10 and Prop 21, essentially standing with Big Real Estate.
Now RealPage is facing an antitrust lawsuit in San Diego – only days after the ProPublica investigation was published. Bloomberg Law reported on Wednesday that a group of renters have filed the suit, accusing RealPage and several big-time landlords of “illegally sharing price information through data analytics software made by RealPage rather than competing to attract renters.”
Corporate landlords Equity Residential and Essex Property Trust, who were among the top contributors to the No on Prop 10 and No on Prop 21 campaigns, were also named as defendants in the RealPage lawsuit. Billionaire Sam Zell, chairman of Equity Residential, is known to be the “quintessential corporate vulture.”
It all adds up to more proof that tenants need protection against the predatory business practices of corporate America – Big Real Estate and Big Tech, which is turning into a major player inside the real estate industry. It’s why a grassroots rent control movement continues to gather momentum throughout the U.S.
(Correction: RealPage first contributed $500,000 to the No on Prop 10 campaign in 2018, but the money wasn’t spent. That contribution was then used for the No on Prop 21 campaign in 2020.)
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(Patrick Range McDonald is a best-selling author and award-winning journalist. A longtime staff writer at LA Weekly, McDonald is now the advocacy journalist for Housing Is A Human Right, the housing advocacy division of AIDS Healthcare Foundation, and a contributor to CityWatch.)