WASHINGTON STATE — The state of Washington, along with eight other state attorneys general and the federal government, has just joined an antitrust lawsuit against RealPage, accusing the real estate software company and landlords of illegally colluding to increase profits.
RealPage is a real estate software company that, according to its website, “delivers a unified, streamlined system that saves landlords time and money.” Their property management software, OneSite, allows “employees to access multiple products simultaneously and receive digital financial summary reports,” according to a company blog post.
But now US Attorney General Merrick Garland is accusing the company of using this mathematical algorithm to adjust rents.
“Competing landlords have agreed to provide RealPage with their most sensitive, nonpublic information on a daily basis, including rental rates, lease terms and projected vacancy rates,” Garland said in announcing the lawsuit. “Americans should not have to pay more rent just because a company has found a new way to collude with landlords and break the law.”
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The antitrust lawsuit alleges that RealPage’s pricing algorithm allows landlords to use shared, confidential information to adjust rents.
Rent is making up an ever-larger share of American wages. A quarter of all U.S. households, about 10.4 million, had to spend more than half of their income on rent in 2021. By 2022, that number rose to 12.1 million.
RealPage is based in Texas but has an office in Seattle.
The Justice Department said the lawsuit followed a years-long “careful” investigation.
A potential RealPage customer described the company’s model as “classic price fixing,” according to Ferguson’s office.
The lawsuit also quotes a RealPage vice president as saying, “It’s better for everyone to succeed than for us to try to essentially compete with each other in a way that de facto weakens the industry.”
According to a Washington Post analysis, Washington has some of the highest rents in the country, with drastic increases over the past five years above the national average. That report states that rents have increased about 19% nationwide since 2019.
However, this analysis found a 41% increase in rents in Chelan County.
According to this analysis, rents increased by more than 30% in Skagit, Benton and Spokane counties and by more than 25% in Pierce, Snohomish, Whatcom, Walla Walla and Thurston counties during the same period.
The aim of this lawsuit is to get a judge to put an end to the exchange of confidential, non-public competitive information and price fixing.
