“RealPage replaces competition with coordination,” Coleman said. “It does so openly and directly, and renters in Kentucky are left paying the price.”
Kentucky has become the latest state to take action against RealPage, Inc., a multi-billion-dollar software company that helps landlords manage properties and set rental rates.
In a lawsuit filed in U.S. District Court for the Eastern District of Kentucky, state Attorney General Russell Coleman claims that RealPage and its landlord co-defendants broke the law by conspiring to raise prices for renters.
Coleman argues that RealPage, which sells and manages commercial revenue management software, effectively “controls” at least 80% of the state’s rental market. Since 2016, the company has, for instance, collected an assortment of nonpublic data from its landlord-clients, which it uses to generate price recommendations. This data purportedly includes information obtained through rental applications, new leases, and renewal offers, all fed into an algorithm and used to set the highest-possible price within a market.
“RealPage replaces competition with coordination,” Coleman said. “It does so openly and directly, and renters in Kentucky are left paying the price.”
“Renters are entitled to the benefits of vigorous competition among landlords. In prosperous times, that competition should limit rent hikes; in harder times, competition should bring down rent, making housing more affordable,” the lawsuit alleges. “RealPage has built a business out of frustrating the natural forces of competition. In RealPage’s own words, ‘a rising tide raises all ships.’ This is more than a marketing mantra.”
“RealPage,” the lawsuit says, “sells software data to landlords that collects nonpublic information form competing landlords and uses that combined information to make pricing recommendations. […] Many of the largest landlords in Kentucky, including BH, First Communities, Greystar, Highmark, IRT, MAA, RPM, and Willow Bridge … who would otherwise be competing with each other, submit or have submitted, on a daily basis, their competitively sensitive information to RealPage.”
Coleman’s office notes that RealPage’s communications and marketing material are “blunt,” with executives stating that their aim is to help landlords “avoid the race to the bottom in down markets.”
“Sometimes RealPage is even more direct, acknowledging that its software is aimed at ‘driving every possible opportunity to increase price’ or observing that among landlords,’ there is a greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down,’” the lawsuit states.
Coleman’s office has characterized RealPage’s practices as a form of price-fixing and is seeking civil penalties of up to $10,000 per each suspected violation of the Kentucky Consumer Protection Act.
Sources
Attorney General Coleman Takes Predatory Rental Company to Federal Court
Ky Attorney General suing state’s largest landlords, property management software provider
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