Price Fixing or Dynamic Pricing? NC joins DOJ in suing real estate revenue software company

CHARLOTTE ( QUEEN CITY NEWS ) — It doesn’t take long in the Charlotte area to find someone who believes the rent is too high.

Justin Halloran says he and his wife rented five places in four years, consistently moving to avoid rising rent. “We just kept moving until we finally were like, ‘OK. We need to buy a house so this stops happening,’” said the new homeowner.

Now, North Carolina has joined other states and the Justice Department in suing real estate software company RealPage.

The company states its AI Revenue Management software helps individual landlords with precision pricing, based on supply and demand.

North Carolina Attorney General and Gubernatorial candidate Josh Stein claims they’ve found evidence of price fixing — not dynamic pricing.

RealPage spokesperson Jennifer Bowcock sent Queen City News the following statement stating, “We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the DOJ has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years. It is merely a distraction from the fundamental economic and political issues driving inflation throughout our economy – and housing affordability in particular – which should be the focus of policymakers in Washington, D.C. RealPage’s revenue management software is purposely built to be legally compliant, and we have a long history of working constructively with the DOJ to show that.  In fact, in 2017 when the DOJ granted antitrust clearance for our acquisition of LRO, the DOJ also analyzed extensive information about our revenue management products without objecting to them in any way. We believe the claims brought by DOJ are devoid of merit and will do nothing to make housing more affordable. We intend to vigorously defend ourselves against these accusations.”

Dom Beveridge, who once worked at RealPage, and has decades of experience in the revenue management field believes the lawsuit is fueled by politics.

He said, “Declaring that you’re not allowed to use technology to help you figure out what the right price is for your unit is very much of a piece with this sort of price-control agenda that they seem to be driving,”

Beveridge says the software is actually incapable of doing what the DOJ is alleging.

“The allegations are actually impossible,” he told Queen City News. “It’s not just that they’re not true. You couldn’t do the thing that they’re alleging.”

Beveridge says there are far too many variables in real estate rentals to paint pricing with a broad brush.

“There’s no math you can do on those numbers that would fix that problem,” he said. “Fundamentally, it’s a market where price fixing doesn’t work.”

Convincing the average renter might be harder than convincing a judge.

“If you have a huge influx of corporate landlords, it’s kind of hard for that to not be the case,” said renter Andrew Aiken.

Area landlord Judy Dobies says she too looks at the market to determine where to set prices, but she draws the line on price fixing with other landlords.

“Look, any time you can get access to data, and that data can help you run your business that’s important,” Dobies said, “but I just think you have to be careful about crossing the line.”

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