Four Democratic U.S. senators have asked the Department of Justice (DOJ) to examine whether Thomas Bravo LLC’s rental software company RealPage Inc. is causing rents to rise nationwide via its pricing software.
In a letter sent Thursday to U.S. Assistant Attorney General for Antitrust Jonathan Kanter, Senators Elizabeth Warren of Massachusetts, Bernie Sanders of Vermont, Tina Smith of Minnesota, and Edward J. Markey of Massachusetts asked the DOJ to investigate the impact of RealPage’s YieldStar rental pricing software on consumers and inflation.
“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,” the senators wrote in the letter.
YieldStar software is used by many of the nation’s largest property management companies, including GreyStar Real Estate Partners LLC, Camden Property Trust, and Mid-American Apartments LP, to set prices on 20 million rental units — or roughly 8% of all homes for rent in the U.S.
According to the senators’ letter, the rise of “institutional investors and rent-setting algorithms have weakened competition in the already strained housing market, resulting in substandard services and unnecessarily high housing costs for American families.”
Since the onset of the pandemic in March 2020, the median asking rent in the U.S. had risen 26.9% to $1,322 as of December 2022.
It’s “essential that the department use all of its tools to ensure that renters do not fall victim to corporate landlords and anti-competitive forces,” the senators wrote.
“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 wrote in an email.
In November 2022, the DOJ opened an investigation into RealPage after a ProPublica investigation in October found that RealPage’s software could potentially be the source of some of the nation’s rising rent problems.
RealPage is also facing a lawsuit filed by renters in U.S. District Court in San Diego alleging that RealPage and nine of the nation’s biggest property managers, including Greystar, Lincoln Property Company, Equity Residential, Mid-America and FPI Management, formed a cartel to artificially inflate rents in violation of federal law.
In January, President Biden tasked the DOJ with addressing anti-competitive information sharing practices in the housing market.
This article was updated to include commentary from RealPage.