RealPage Strikes Its First Deal With A State Over Its Rent Pricing Algorithm

RealPage has reached a first-of-its-kind settlement with the state of Nevada over allegations that the company’s software helps landlords collude to set rents. 

The consent decree, which still needs court approval, would be the first agreement between RealPage and a state government over its AI Revenue Management software.

It outlines what kind of information RealPage’s algorithmic tool can use to suggest rents and includes five years of oversight from the state to confirm that RealPage is following the rules. 

If approved, the agreement would settle litigation between the state and RealPage, but not the ongoing antitrust suit that was filed last August by the Department of Justice and 10 state attorneys general. 

RealPage doesn't admit to any wrongdoing or liability as part of the agreement, but it will commit to only using publicly available information — or nonpublic information that is at least three months old, spans at least 10 properties and is anonymized — to calculate rental recommendations. 

Texas-based RealPage will also agree not to publish any data regarding rent, occupancy or availability to its Nevada customers unless the data is aggregated and anonymized. The company also agreed to make a one-time, $200K contribution to the state of Nevada to fund rental assistance programs. 

RealPage would provide Nevada with annual certifications that it is in compliance with the settlement for five years. 

“We are gratified we found a path forward with the State of Nevada,” RealPage CEO Dana Jones said in a statement. “RealPage remains proud of the role we play in facilitating affordable housing for renters in Nevada.”

RealPage has been defending itself since 2022 against allegations that its AI Revenue Management software, previously known as YieldStar, facilitates the formation of a cartel of landlords, sapping competition from markets and pushing rents up. 

At least six municipalities have passed ordinances either regulating or banning the software, and more than a dozen state legislatures have considered their own rules, although none have passed. More than 30 civil cases against RealPage and landlords that use its software have been consolidated into a case in the U.S. District Court for the Middle District of North Carolina.

Two landlords and property managers, Cortland and Greystar, have reached deals with federal prosecutors to resolve their suits. 

RealPage maintains that its software complies with all regulations and doesn’t stifle competition. Executives at the firm instead say the software is being used as a scapegoat by politicians who are being pressured to address the lack of affordable housing. 

Stephen Weissman, an attorney representing RealPage, told Bisnow this month that the company was preparing to go on offense to prove its products are compliant. 

“If we file lawsuits, there will be outcomes that define where state or federal governments, or private plaintiffs, are overstepping without proof,” he said. 

A key sticking point that stretches across most of the cases is what qualifies as nonpublic information. 

The consent decree would define it as “information from Unaffiliated Properties, such as effective rents, rent discounts, unit availability, lease dates, lease terms, future pricing plans, current pricing, occupancy rates, and guest traffic, that is not publicly available, and could be reasonably used to determine current or future rental supply, demand, or pricing for a property or a property’s units.”

RealPage says nonpublic data already has little bearing on its pricing recommendations, which landlords and property managers are free to reject. 

As part of the proposed settlement, RealPage will maintain an internal antitrust compliance program that would include annual training and new rules for what happens at meetings between landlords who use the software.  

The case is pending in state court in the District of Clark County.