RealPage Is Ready To Hit Back In The Fight Over Rent Pricing Algorithms

RealPage is tired of being blamed for the lack of affordable housing. 

In the face of a federal lawsuit and a host of local regulations aimed at the company’s software, RealPage has taken limited legal action of its own, and it says it has tweaked its tools to stay in compliance. But now the company is ready to go on offense. 

“If we file lawsuits, there will be outcomes that define where state or federal governments, or private plaintiffs, are overstepping without proof. And I think that's going to come sooner rather than later,” said Stephen Weissman, an attorney at Gibson, Dunn & Crutcher LLP representing RealPage in the federal antitrust suit. 

The Department of Justice filed the suit against RealPage in August 2024, accusing the Texas-based firm of helping landlords collude to inflate rents using its software. The case is moving at the typically glacial pace of the U.S. justice system, leaving a nearly empty page where federal guidelines could be. 

At least nine local governments have filled the gap with their own regulations, and RealPage says it has tweaked its tools as a patchwork of new rules has popped up. 

Federal prosecutors and local lawmakers have homed in on RealPage’s AI Revenue Management platform, alleging that it is enabling and exacerbating anticompetitive behavior. The software from RealPage helps owners track occupancy, set rental rates and get real-time insight into their portfolios. 

The antitrust case revolves around allegations that the system helps and encourages competing landlords to cooperate. The DOJ, which has been joined in the case by 10 state attorneys general, argues that landlords are operating as a price-fixing cartel by outsourcing rent pricing decisions to an algorithm that uses nonpublic information from multiple multifamily owners to suggest rents.

“Antitrust law does not become obsolete simply because conspirators find new ways to act in concert,” the DOJ said in a 2023 filing.

RealPage, which says its software helps landlords manage 24 million rental units worldwide, first caught the attention of antitrust regulators in 2022 following an investigation by ProPublica into how landlords were leveraging the AI Revenue Management platform, which was called YieldStar at the time. 

A class-action lawsuit was filed against RealPage and a group of large landlords just a week after ProPublica published its story, and more than 30 civil cases against RealPage and more than 20 landlords were consolidated in a federal court last August. That combined civil case is ongoing in the U.S. District Court for the Middle District of North Carolina.

RealPage hasn’t wavered from its position that its AI Revenue Management tool doesn’t facilitate collusion. The firm says its proposed rents are just suggestions and that nonpublic data about other properties has little bearing on the suggestions the algorithm spits out.

“Unfortunately, much of the debate and legislative efforts have been fueled by serious misrepresentations of how revenue management software actually works and the value it provides and instead has been animated by political efforts to claim quick wins,” RealPage spokesperson Jennifer Bowcock said in an email. “The facts are clear: revenue management tools do not set rents.” 

The government added six of the country’s largest landlords and property managers to the ongoing DOJ case in January, the same time that it announced it had reached a consent decree with Cortland Management that let the firm escape charges in exchange for cooperation with investigators. Greystar cut a deal with the Justice Department in August to resolve its charges.

The two settlements were made roughly a year apart and straddled the administrations of President Donald Trump and his predecessor, Joe Biden. The terms of the agreements largely mirror each other, a sign that the current administration remains committed to pursuing the antitrust case, said Ken Racowski, a partner at Holland & Knight who has represented landlords in recent antitrust cases. 

Both settlements use the same language to prohibit the landlords from sharing competitively sensitive, nonpublic data with RealPage and other landlords that could lead to the alignment of rents. 

“For better or worse, the line that seems to be drawn in the sand is this distinction between confidential versus nonconfidential public information as to pricing,” Racowski said.

That prohibition is similar to rules passed last July in San Francisco, the first U.S. city to ban the use of algorithmic devices to set multifamily rents. Philadelphia became the second major city to ban the technology with its own ordinance in October. 

Similar rules have been passed in Jersey City and Hoboken, New Jersey, Minneapolis, San Diego and Providence, Rhode Island. More than a dozen state legislatures have considered some kind of legislation targeting algorithmic rent setting, but no statewide laws have been enacted. 

The regulations have led multifamily operators to demand that their revenue management software providers furnish written commitments to avoid using nonpublic competitor data to suggest rental rates for their units. 

“From a risk mitigation perspective, in the face of all of this litigation and what's going on with the DOJ settlements, you absolutely cannot be in a position to be relying on pricing recommendations that mix the nonpublic pricing information of you and your competitors,” Racowski said. 

In the one city where RealPage has sued, it won at least a temporary reprieve. The city council in Berkeley, California, passed a resolution in March banning “coordinated pricing algorithms.” 

RealPage quickly sued to stop the ordinance from going into effect the following month, calling it an unconstitutional attack on its freedom of speech. In a memo to the city council, City Attorney Farimah Brown recommended that enforcement of the ordinance be delayed, citing the “significant costs for the City” of the pending litigation and RealPage’s willingness to work with officials to identify a solution that didn't involve a court fight.  

The city council obliged, pushing enforcement of the ordinance to March 2026, but the lawsuit challenging its legality is still pending in the U.S. District Court for the Northern District of California.

“We've been very clear that we want to be part of the solution,” Weissman said. “If there's a way we can continue to innovate that addresses concerns, we're open to that, but we're not open to a scapegoating of our product.”

All of the antitrust cases against RealPage are either ongoing or ended before a court weighed in on the merits of the claims. The DOJ and tenants who are suing continue to allege that RealPage’s software lets landlords collude on rents. But a judge has yet to agree or disagree, which in turn gives a wide berth to lawmakers to impose restrictions. 

But RealPage and attorneys for some landlords say that case law from other commercial real estate sectors suggests that rent-setting algorithms don’t amount to illegal price-fixing. 

A judge last May tossed out a proposed class-action lawsuit filed against a group of Las Vegas hotel operators, including Wynn Resorts and Caesars Entertainment, that alleged that their use of revenue management software violated antitrust laws. A similar case alleging price-fixing at hotels and casinos in Atlantic City was dismissed with prejudice in October. 

That decision was appealed, and both sides are preparing oral arguments for the closely watched case in the U.S. Court of Appeals for the 3rd Circuit.  

RealPage has adjusted its platform as new statutes clear city councils. But that doesn’t mean the software firm believes that those statues will ultimately hold up in court, Weissman said. 

“We think the best solution for everyone, including consumers, is the solution we've had,” he said. 

CORRECTION, SEPT. 15, 3:20 P.M. ET: Realpage serves 24 million units worldwide across all of its software, not just its AI Revenue Management tool.