UPDATE: The U.S. Department of Justice (DOJ) has just announced a major settlement with real estate tech firm RealPage, which faced serious allegations of enabling landlords to collude in setting exorbitant rents. The settlement, revealed in a North Carolina federal court earlier today, mandates significant changes to RealPage’s operations that could reshape the rental market for millions of American tenants.
This urgent development comes as housing costs continue to burden everyday Americans, with the DOJ stating that the settlement will “help restore free market competition in rental markets.” Gail Slater, chief of the DOJ’s antitrust division, emphasized the need for independent pricing decisions among competing landlords, especially with the growing influence of algorithmic tools.
Under the settlement terms, RealPage is required to cease using “nonpublic, competitively sensitive information” from landlords to determine rent prices. Additionally, the company must stop utilizing active lease data for training its algorithms, instead opting for data that is older than 12 months. These measures are designed to prevent the artificial inflation of rental prices that has left many renters struggling.
The lawsuit, initially filed in January 2023 under former Attorney General Merrick Garland, accused RealPage of prioritizing profits over tenant occupancy, contributing to a strained housing supply. Allegations included the use of proprietary software that allowed landlords to set prices based on confidential rent data provided by competitors. Rather than competing for tenants, landlords were reportedly relying on these algorithms to determine rent, further exacerbating the housing crisis.
RealPage, headquartered in Richardson, Texas, must also modify its software to prevent it from assessing market effects below the state level. Moreover, the company is required to eliminate features that may restrict rent price decreases or encourage price alignment among landlords.
The DOJ’s settlement must still receive court approval, but it comes amid a broader initiative by the Trump administration to lower housing costs. With this agreement, the DOJ successfully avoids a lengthy trial process that could have taken years.
The lawsuit originally included participation from eight states: California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, and Washington state. In January, the case was expanded to include six major landlords as co-defendants, including Greystar Real Estate Partners and Blackstone’s LivCor. As part of the settlement, RealPage will also cooperate with the DOJ as it continues litigation against these remaining defendants.
This case marks a significant moment in the fight against algorithmic collusion, reflecting growing concerns about how technology impacts competition in various industries. In a revealing statement, the DOJ noted that RealPage executives acknowledged the software’s effects on competition, with one executive commenting on the benefits of collective success over individual competition.
As the housing crisis continues to affect renters nationwide, the implications of this settlement are profound. Millions of Americans could experience relief as the DOJ takes a stand against practices that inflate rental prices and restrict competition. Stay tuned for further updates as this story develops.
