The company accused of driving up your rent is quietly settling a price-fixing lawsuit.
Driving the news: The U.S. Justice Department has settled a lawsuit against RealPage, an apartment-pricing company that was accused of allowing corporate landlords to collude with each other and inflate rental prices in Canada and the U.S.
- As part of the settlement, RealPage will be restricted in the confidential data it provides to landlords to set rental prices and terms.
Catch-up: A similar class-action lawsuit was filed against a dozen Canadian property managers and landlords last year, alleging the company’s AI software, YieldStar, was being used to share pricing data with each other and inflate rental prices in lockstep.
Why it matters: Average rents in Canada were found to be higher in buildings that used the software. RealPage’s own marketing material boasted about a Canadian pilot project where buildings using YieldStar made up to 4% more in rental revenue than others.
- A ProPublica investigation found that the software will even recommend that landlords accept fewer tenants to drive up demand and raise rents higher.
Bottom line: It’s unclear if limiting the data RealPage offers will have a real impact on price-setting, but some regulators aren’t waiting to find out. California and New York passed laws last month to crack down on rent-setting software, while cities like Philadelphia, San Francisco, and Seattle have now limited or banned the tools.—LA