RealPage is defending itself against accusations of manipulating rental prices by insisting that it is not engaging in any wrongful activities when it suggests rental rates to landlords. The property management software company recently launched a microsite and a digital booklet named “The Real Story” to counter the allegations it is facing, including lawsuits and a federal criminal investigation related to claims of rental price fixing.
The six-page digital booklet aims to debunk what RealPage calls “false and misleading claims” about its software and emphasizes that the software benefits both renters and landlords by increasing competition and providing competitive pricing recommendations to help fill rental units. RealPage asserts that landlords only accept its price suggestions for new leases less than half the time and that customers ultimately have the freedom to set their own prices based on what they believe is best for their properties.
Despite RealPage’s efforts to clear its name, doubts remain among landlords regarding the legality of using revenue management software like RealPage. Alexandra Alvarado, the director of marketing and education at the American Apartment Owners Association, notes that some landlords are hesitant to adopt such technology due to concerns about potential legal repercussions. While technology has undoubtedly made property management more efficient, there are lingering questions about the ethical implications of using software to set rental prices.
Dana Jones, the president and CEO of RealPage, released a statement alongside the digital booklet, claiming that it is time to address the misinformation surrounding the company’s revenue management software and rental pricing practices. However, the Justice Department is reportedly preparing to sue RealPage, further intensifying the scrutiny on the company’s operations.
The allegations of price-fixing against RealPage date back to 2022, when an investigative report by ProPublica suggested that the company’s software contributed to rent increases in certain cities by using private data provided by customers to recommend rental prices. RealPage has defended itself by stating that it utilizes aggregated market data in a lawful manner and that landlords are not obligated to follow its pricing recommendations.
The ongoing antitrust investigation into RealPage’s algorithmic pricing model underscores the broader concerns about the impact of technology on housing affordability. While RealPage maintains that housing affordability issues are driven by economic and political factors rather than software algorithms, the lack of transparency in rental pricing leaves renters uncertain about the reasons behind rent hikes.
In conclusion, the controversy surrounding RealPage highlights the complexities of using technology to determine rental prices and raises important questions about the balance between innovation and ethical considerations in the real estate industry. As the investigation unfolds, both landlords and renters are left grappling with the implications of algorithmic pricing on the rental market.
