Are Landlords Using Software To Keep Your Rent Artificially High?

While rising interest rates makes this a particularly tough time to buy a home, renters don’t necessarily have it much better. Prices have continued to increase steadily in recent years … and two ongoing lawsuits claim the trend can’t be fully explained by the law of supply and demand.

ProPublica probe

The media outlet ProPublica indirectly sparked both of the lawsuits with its investigation into RealPage, a software firm accused of helping landlords nationwide to keep their rental prices nice and high. According to the probe, the software provided insight into relevant data and offered advice for how to inflate prices — including keeping some properties vacant to manufacture scarcity and drive rent even higher.

In most other industries, different companies compete to provide the best price or better service in order to gain market share. According to complaints against RealPage, however, its program provided an incentive for landlords to work with each other while tenants paid the price.

A host of lawsuits stemmed from the damning report, and nearly two dozen of them were combined into one case being heard in the Middle District of Tennessee.

A similar scheme

The other major lawsuit alleging price-fixing within the rental market takes aim at Yardi, which provides a service not unlike RealPage’s proprietary software. That complaint is being considered by a court in Washington and insists that, under ordinary circumstances, landlords “can only make their best educated guesses” regarding what rent for a specific property should be.

Yardi’s program, however, “unlawfully solved this problem,” the lawsuit claims, by taking control of setting rental prices and “implement[ing] higher prices collectively across a group of landlords.”

It might be a while before these cases are settled, but this could be a step in the right direction as rental prices keep climbing.

Chris Agee October 27th, 2023

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