AGs including Ellen Rosenblum allege RealPage Inc. runs a price-fixing cartel for landlords. Two neighborhoods in Oregon are said to be affected.
Oregon has joined a federal antitrust lawsuit against a property management software company alleging it illegally decreases competition among landlords in apartment pricing.
The suit filed Aug. 23 in Federal District Court for the Middle District of North Carolina alleges RealPage Inc. violated the Sherman antitrust act by monopolizing the rental market through software that landlords use to price apartments. The filing by the Justice Department is co-signed by eight state attorneys general including Oregon AG Ellen Rosenblum.
Pricing algorithms like RealPage are rising in popularity and spreading to other industries, according to Rosenblum’s office.
“At a time when housing affordability is a top concern for Oregonians — and for countless Americans beyond our state’s borders — the issues of fairness and competition could not be more critical,” Rosenblum wrote in a statement. “RealPage’s use of its AI algorithm effectively acts as a hub for property managers and landlords to share confidential, competitively sensitive information and to engage in a pricing alignment scheme to avoid competition.”
The lawsuit lists neighborhoods where RealPage subscription penetration exceeds 30%, including two neighborhoods in Oregon — Aloha/West Beaverton and Central Portland.
The suit does not name property managers or owners or seek damages on behalf of renters.
RealPage did not respond to a request for comment by Oregon Business.
According to the lawsuit, the Texas-based company sells software to landlords that collects nonpublic information from competing landlords and uses the sensitive information to make pricing recommendations for participating landlords. It further claims that absent the software, the landlords would have to compete independently to attract through prices, discounts, concessions and other leasing dimensions. The suit alleges RealPage Inc. amounts to a price-fixing cartel that harms renters and undercuts a fair housing market.
“Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law,” Attorney General Merrick B. Garland said in a statement.
In addition to a subscription service, RealPage provides analysis. The writer of a May blog post describes challenges for landlords in the Portland market, where falling occupancy led to rent decreases for the first time in more than a decade.
“At 93.9% in April 2024, Portland’s apartment occupancy hovered below the pace this market set in the decade prior to the COVID-19 pandemic, when the average was consistently above 95%,” the post reads. “Falling occupancy in Portland has impacted operators’ ability to realize pricing power. As such, effective asking rents were cut by 1.6% in the year-ending April. That was among the worst performances nationwide.”
The civil complaint cites testimony from landlords and RealPage executives suggesting they knew a fix was in.
“I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and (terms),” a landlord is quoted as saying. “That’s classic price fixing.”
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