The software's impact on tenants is significant, with many forced to move frequently due to escalating rents. RealPage's software, YieldStar and its successor AI Revenue Management, pool data from landlords to generate pricing recommendations. Critics argue this artificially inflates prices, particularly in areas with high housing costs. Despite the company's claims that its technology benefits the rental market, the Justice Department alleges that RealPage's practices decrease competition among landlords and result in artificially high rents. The company's practices have been particularly harmful to low-income residents, who are more heavily impacted by rising rents.
Key takeaways:
- Many landlords are using a software developed by RealPage, which uses an algorithm to set rent prices. This practice is being criticized as an "unlawful information-sharing scheme" and is facing legal pushback in several cities and states.
- RealPage is accused of using its software to artificially inflate rent prices, exacerbating housing shortages and driving up costs. The company is facing an antitrust lawsuit from the Department of Justice and the attorney generals of eight states.
- The software works by pooling data from landlords, including private data from rental applications and rent prices, and using mathematical forecasting to generate pricing recommendations. Critics argue this allows landlords to collude on pricing.
- The use of this software is having a significant impact on tenants, particularly low-income residents, who are struggling to afford the rising rents. In San Diego, for example, average rent has increased by 26% over three years.