Editor’s note, 8/21/2024: This story has been significantly edited to remove references to a report from the Triangle chapter of the Democratic Socialists of America. The Triangle DSA has posted its own statement and retracted its report. RealPage remains under investigation.
The software company RealPage, which sets prices for large shares of the rental market in the Triangle, is the subject of an antitrust investigation by the state attorney general.
Texas-based RealPage, whose software helps landlords set rental prices using a proprietary algorithm, is also under scrutiny nationwide for alleged illegal price fixing.
North Carolina Attorney General Josh Stein opened an antitrust investigation into the company in March, following in the footsteps of the District of Columbia and Arizona attorneys general. The U.S. Department of Justice is also preparing a lawsuit against RealPage, according to Politico.
RealPage did not respond to a request for comment.
In past statements to ProPublica and Politico, the company denied any wrongdoing and emphasized that RealPage’s rental pricing recommendations are just that: recommendations, which landlords can take or leave. However, ProPublica found that as many as 90 percent of the suggestions are adopted.
Stacey Anfindsen, a residential real estate appraiser based in Apex, is skeptical of the idea that RealPage could be fixing prices in the Triangle market in such a widespread way.
“Our market has so many apartment alternatives, I find it difficult to believe that a software program can dictate rent,” Anfindsen wrote in an email to the INDY.
Yet that’s exactly what a 2022 ProPublica investigation found the company was doing in other rental markets around the country.
According to ProPublica, RealPage’s algorithm uses pricing data from its 31,000-plus clients nationwide to make recommendations to landlords about what rents to charge. Those rents are often higher than what property managers would charge on their own, the investigation found.
Nationwide, experts and regulators have sounded alarms over RealPage’s use of competing landlords’ private data in its algorithm. They say that sharing data between competitors in order to set higher rents would amount to illegal collusion. The upcoming DOJ lawsuit against RealPage is expected to focus on this allegation, according to Politico.
Another component of the antitrust argument against RealPage hinges on the company’s dominance in certain rental markets. For instance, according to ProPublica, 70 percent of apartments in one Seattle neighborhood were managed by landlords who used RealPage in 2022. In cases like this one, renters have limited choices beyond units priced by RealPage, forcing them in many cases to accept artificially higher rents.
Reach Reporter Chloe Courtney Bohl at [email protected]. Comment on this story at [email protected].