The Justice Department has settled its case against real estate tech firm RealPage, which faced bombshell allegations of building algorithms that allowed landlords to illegally collude to jack up rents for tenants, The Post has learned.
The settlement, disclosed in North Carolina federal court on Monday, requires RealPage to stop allowing its software to use “nonpublic, competitively sensitive information” provided by landlords to set rent prices. RealPage will also be forced to stop using active lease data to train its algorithmic models and only use information that is at least 12 months old.
The DOJ said the settlement would “help restore free market competition in rental markets for millions of American renters.”
“Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement,” DOJ antitrust chief Gail Slater said in a statement.
The settlement agreement requires court approval before it can be implemented.
The deal came during a broad push by President Trump and his administration to bring down housing costs, which have been weighing on the pockets of ordinary Americans. With the settlement, the DOJ secured remedies while avoiding a trial that was likely years away.
Filed last year under then-US Attorney General Merrick Garland, the DOJ’s lawsuit alleged that RealPage’s software has enabled shady landlords to prioritize profits over filling up their building, which has allegedly placed further strain on the housing supply and crushed cash-strapped renters with soaring costs.
Rather than competing with each other to attract tenants as they normally would, landlords were instead allowing algorithms to set prices based on nonpublic rent data that they and their rivals submitted to RealPage, the suit alleged.
Under the terms of the settlement, RealPage has agreed not to allow its models to assess geographic market effects at lower than the state level, and to remove or redesign any features that limited rent price decreases or otherwise caused rival landlords on its platform to align their prices.
The Richardson, Tex.-based company will also stop soliciting sensitive information about the rental market through market surveys, cease discussing market trends based on nonpublic information in meetings about its revenue management software, and accept a court-appointed monitor to ensure it is in compliance with the settlement.
The DOJ initially filed the lawsuit alongside eight states: California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington state. The feds also accused RealPage of operating an illegal monopoly for property management software for multi-family housing.
In January, the lawsuit was amended to add six of the country’s biggest landlords as co-defendants: Greystar Real Estate Partners, Blackstone’s LivCor, Camden Property Trust, Cushman & Wakefield, Willow Bridge and Cortland. Two more states, Illinois and Massachusetts, joined as plaintiffs.
The DOJ previously reached settlement agreements with Cortland and Greystar, while proceedings against the other defendants are still pending.
As part of its settlement, RealPage agreed to cooperate with the DOJ in the lawsuit against the remaining landlord defendants.
“We are pleased to have reached this agreement with the DOJ, which brings the clarity and stability we have long sought and allows us to move forward with a continued focus on innovation and the shared goal of better outcomes for both housing providers and renters,” RealPage CEO Dirk Wakeham said in a statement.
The case marked the first time that DOJ antitrust enforcers went after so-called algorithmic collusion, a growing concern as more industries become reliant on software to run their businesses.
“RealPage has built a business out of frustrating the natural forces of competition,” the lawsuit stated.
The suit cited comments from RealPage executives that allegedly showed they were aware the software was affecting normal competition in the rental market.
“There is greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down,” one executive said, according to the DOJ.
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