HOUSING WATCH - At least four major lawsuits have been filed by California tenants against RealPage and its corporate clients for allegedly colluding to inflate rents. Last October, ProPublica published a devastating investigative report that found RealPage, through its software program, helped corporate landlords to work together to charge unfair, excessive rents. Since then, RealPage and numerous corporate landlords have been slapped with more than 20 lawsuits from around the United States.
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.”
Based in Texas, 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.
Many of RealPage’s corporate clients also operate in multiple cities in the U.S.
Since the publication of ProPublica’s investigation, Congressional leaders have demanded federal investigations into RealPage’s business practices. Housing Is A Human Right also called for a federal investigation.
In addition, tenants from around the country have slapped more than 20 lawsuits against RealPage and its corporate clients, according to the website Law360. The lawsuits have been filed in federal court in Washington state, Tennessee, Colorado, Massachusetts, and Texas – and at least four of those 20 lawsuits involve tenants in California, according to legal documents obtained by Housing Is A Human Right. One of those lawsuits can be found here.
Corporate landlords named in the RealPage lawsuits include Essex Property Trust, Equity Residential, and AvalonBay Communities. Those same corporate landlords shelled out millions in campaign cash to successfully stop California rent control ballot measures Proposition 10, in 2018, and Proposition 21, in 2020.
Essex Property Trust delivered a total of $26.2 million to kill Prop 10 and Prop 21; Equity Residential shelled out $17.9 million; and AvalonBay Communities gave $17 million. Housing Is A Human Right also broke the story that RealPage contributed $1 million to stop Prop 10 and Prop 21.
A broad coalition of housing justice organizations, social justice groups, labor unions, and civic leaders supported Prop 10 and Prop 21, which would have changed statewide rent control restrictions in California. Activists believe that rent control is the only way to rein in corporate landlords and their predatory business practices.
But with Prop 10 and Prop 21 successfully defeated by the real estate industry, which spent a total of $175.4 million to kill the measures, RealPage and its corporate clients then went about wildly inflating rents. Their predatory actions only underline the need to end statewide rent control restrictions in California.
Fortunately, Housing Is A Human and its parent organization, AIDS Healthcare Foundation, have moved forward with the Justice for Renters Act, a 2024 ballot measure that repeals statewide rent control restrictions in California.
The initiative has already been endorsed by labor union and civil rights icon Dolores Huerta, the California Nurses Association, Pomona United for Stable Housing, Social Security Works, Veterans’ Voices, the Coalition for Humane Immigrant Rights, and Americans for Democratic Action – Southern California.
The quick endorsements aren’t surprising. Key studies released by the University of Southern California, UCLA, and UC Berkeley found that rent control will stabilize the housing affordability crisis and prevent people from falling into homelessness. It will also stop corporate landlord greed.
The RealPage scandal shows there’s an urgent need to finally rein in corporate landlords and other predatory landlords, who will do anything to squeeze every last cent out of tenants – no matter the consequences to the poor and middle and working class. The Justice for Renters Act is needed now more than ever.
(Patrick Range McDonald, author and journalist, Best Activism Journalism: Los Angeles Press Club, Journalist of the Year: Los Angeles Press Club, Public Service Award: Association of Alternative Newsmedia, and a contributor to CityWatch. )