UPDATE: The Department of Justice has just announced a significant victory for renters across the United States, reaching a deal that aims to dismantle a controversial “secret algorithm” used by landlords to set rental prices. This urgent settlement with RealPage Inc. could reshape the rental market, ensuring fairer pricing for tenants in the face of rising costs.
Under this proposed agreement, which still requires approval from a judge, RealPage will no longer utilize real-time data to formulate rental price recommendations. Instead, the algorithm will only be allowed to leverage non-public data that is at least one year old. Critics have long argued that the company’s practices contributed to illegal “algorithmic collusion,” which inflated rental prices nationwide.
“RealPage was replacing competition with coordination, and renters paid the price,” said DOJ antitrust chief Gail Slater. This deal follows a yearlong federal antitrust lawsuit initiated during the Biden administration against the Texas-based software giant. Notably, RealPage will not be required to pay damages or admit any wrongdoing as part of this settlement.
The urgency of this development comes as the rental market faces unprecedented pressure, leaving many families struggling to keep up with soaring rents. Slater emphasized the importance of this settlement for American families:
“What does this mean for you and your family? It means more real competition in local housing markets. It means rents set by the market, not by a secret algorithm.”
RealPage’s software has been designed to provide daily pricing recommendations to landlords throughout the country. While landlords were not obligated to follow these suggestions, the vast access to confidential data allowed them to maximize their rental income. The implications of this settlement could lead to lower rental prices and reduce vacancy rates, creating a more competitive environment for renters.
In an official statement, RealPage attorney Stephen Weissman expressed satisfaction with the resolution, stating,
“There has been a great deal of misinformation about how RealPage’s software works and the value it provides for both housing providers and renters.”
Weissman maintained that the previous use of aggregated and anonymized data resulted in lower rents and enhanced competitive dynamics.
The settlement arrives amid a surge of legislative actions aimed at regulating rent-setting software. Recently, the governors of California and New York signed laws to curb this practice, while cities like Philadelphia and Seattle have enacted their own ordinances against such algorithms. Over the past few months, more than two dozen property management companies, including Greystar, the largest landlord in the nation, have settled various lawsuits related to their use of RealPage’s software, with Greystar agreeing to pay a total of $50 million for a class action lawsuit and $7 million for a separate case involving nine states.
As this deal unfolds, the impact on renters could be profound. Ten states, including California, Colorado, and Illinois, had previously joined the DOJ’s antitrust lawsuit, indicating a broader movement against unfair rental practices. However, these states are not included in Monday’s settlement, highlighting ongoing challenges in the fight for tenant rights.
What’s Next? All eyes are on the judicial review of this settlement. If approved, it could trigger a wave of changes in how rental pricing is approached nationwide, ultimately benefiting millions of renters. The conversation surrounding rent control, algorithm use, and housing affordability is far from over, and the implications of today’s announcement will be felt for years to come.
Stay tuned for further updates on this developing story as we monitor the effects on renters and the rental market across the United States.
