Justice Department sues software company for helping landlords raise rents across the country

The Department of Justice has announced it is suing a Texas software company for designing a program that helps landlords keep rent prices allegedly higher than they otherwise would.

RealPage Inc., which sells and collects real estate data, used private information from landlords to train the company’s algorithm to set pricing recommendations, maximizing the amount landlords can charge, the suit alleges. Attorneys general in North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington have also joined the suit.

“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 Garland said in a statement Friday. “We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents."

The suit alleges that RealPage broke sections 1 and 2 of the Sherman Act, a federal antitrust law. Section 1 states that business contracts that "unreasonably" restrain trade are prohibited. Section 2 states that any company which monopolizes or attempts to monopolize a market is guilty of a felony.

According to the suit, RealPage describes itself as “driving every possible opportunity to increase price even in the most downward trending or unexpected conditions." The company however, has denied the allegations, arguing that their information sharing is legal and doesn’t actually raise prices.

​​“The software is not driving higher rates than what would happen in a competitive market,” Stephen Weissman, a lawyer for RealPage told USA Today.

The announcement comes as housing costs reach record-level highs across the country and cost of living has become a major point of discussion in the upcoming 2024 election. Democratic candidate Kamala Harris has pledged to build 3 million new homes to bring down housing costs, as well as “cap unfair rent prices.”

"Some corporate landlords collude with each other to set artificially high rental prices, often using algorithms and price-fixing software to do it.It's anticompetitive, and it drives up costs," Harris said in a speech in North Carolina earlier this month.