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Property management software giant RealPage broke its silence on Tuesday morning regarding the class action lawsuit against it and a federal criminal antitrust investigation into its Yardi software.
In the statement, RealPage CEO Dana Jones asserted that “false and misleading claims” have been reported regarding the company’s revenue management software and denied that the company is responsible for widespread rent increases.
“The time is now to address a number of false claims about RealPage’s revenue management software, and how rental housing providers operate when setting rent prices,” Jones said. “Housing affordability should be the real focus. RealPage is proud of the role our customers play in providing safe and affordable housing to millions of people. Despite the noise, we will continue to innovate with confidence and make sure our solutions continue to benefit residents and housing providers, alike.”
Numerous class-action lawsuits allege that landlords used RealPage’s Yardi software to coordinate a campaign to raise rents to unprecedented highs by using RealPage’s algorithms to share rental price data with other providers. The lawsuits allege that the price- and occupancy-sharing agreements amounted to a “cartel.”
The lawsuits also name several rental housing operators, some of whom have already settled, such as Pinnacle Property Management Services — one of the largest property managers in the United States — and Apartment Income REIT.
The same claims laid out by the lawsuits have reportedly inspired the Department of Justice to launch a criminal investigation into RealPage, with reports indicating that the DOJ is looking into the possibility RealPage helped facilitate price fixing at some of the large rental properties whose owners use the software. The criminal investigation came after the DOJ filed a brief in support of the collective class action lawsuits against RealPage moving forward.
“Put simply, RealPage allegedly replaces independent competitive decision-making on prices, which often leads to lower prices for tenants, with a price-fixing combination that violates” antitrust law, the DOJ said in support of the renters’ case.
In its statement, RealPage pointed to housing affordability as the real problem and argued it should not be held responsible for the persistent undersupply of rental units, increased demand for rental housing, and inflationary pressures currently shaping the housing market.
It also asserted that RealPage customers set their own prices, have the discretion to accept or reject software price recommendations, are not punished for denying software recommended rents, and accept recommendations at widely varying rates that they claim are lower than has been reported.
In the statement, RealPage pointed out that its price recommendation software makes recommendations in both directions, up and down, and that it never recommends a customer withhold vacant units from the market. It claimed that customers using their software maintained a rental vacancy rate well below the national average, but did not provide a specific statistic.
“RealPage revenue management software offers prospective residents and housing providers more options and flexibility in lease terms, aids compliance with Fair Housing laws, does not use any personal or demographic data to generate rent price recommendations, and helps ensure that prospective residents have access to the best pricing available to everyone,” the statement reads.
Some of those claims ran contrary, however, to remarks made by RealPage executives at a 2021 conference, which were first reported by ProPublica in 2022.
“Never before have we seen these numbers,” Jay Parsons, then a vice president at RealPage, speaking about a recent 14.5 percent jump in apartment rent prices. Parsons then asked a colleague if their software had played a role, according to ProPublica.
“I think it’s driving it, quite honestly,” Andrew Bowen, another RealPage executive answered. “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”
