In these times, double down — on your skills, on your knowledge, on you. Join us Aug. 8-10 at Inman Connect Las Vegas to lean into the shift and learn from the best. Get your ticket now for the best price.
Four U.S. Senators joined the calls for the Department of Justice to review the rental data and technology firm RealPage, adding to ongoing pressure around a company that helps guide the price of rent across the country.
The letter, penned by Sens. Elizabeth Warren (D-MA), Bernie Sanders (D-VT), Tina Smith (D-MN) and Edward Markey (D-MA), revealed that Congress had conducted its own “investigation” of the company that works with some of the largest property managers in the nation.
RealPage has come under scrutiny over its role in the cooperation between apartment owners using its proprietary algorithm, YieldStar. It faces multiple proposed class action lawsuits from renters who say the company is behind the meteoric rise in rent that started during the COVID-19 pandemic.
The letter sent by the four senators to Assistant Attorney General Jonathan Kanter called for a DOJ review.
“The DOJ should act to protect American families and closely review rent-setting algorithms like YieldStar to determine if they are having anti-competitive effects on local housing markets that have seen increased institutional investor activity,” the senators said.
The senators said they started their own investigation of YieldStar in November, shortly after an investigation by the news outlet ProPublica shed light on the algorithm’s role in setting rent across the nation.
“While RealPage did not provide us with all of the requested information that would have provided insight into YieldStar’s direct effects on rent levels,” the senators wrote, “what they did share was alarming.”
Specifically, they said RealPage helped to set rent prices for as many as 8 percent of all rental units in the nation, and that the company appeared to have access to nonpublic information to help its clients set recommendations on rent prices.
“Although the company did not inform us about the precise extent to which this non-public data is used, this could be a particular problem given the company’s market share,” the senators wrote. “In fact, given YieldStar’s market share, even the widespread use of its anonymized and aggregated proprietary rental data by the country’s largest landlords could result in de-facto price-setting by those companies, driving up prices and hurting renters.”
RealPage has said in response to the lawsuits and media attention that it welcomes an opportunity to share more information about its products with Congress.
“RealPage appreciates the opportunity to work with the senators’ offices and, more generally, we are always willing to engage policy stakeholders to ensure an informed and comprehensive understanding of the benefits we contribute to the rental ecosystem,” a RealPage spokesperson said in a statement.
Get Inman’s Property Portfolio Newsletter delivered right to your inbox. A weekly roundup of news that real estate investors need to stay on top, delivered every Tuesday. Click here to subscribe.
