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DOJ - Landlords Should Not Share Rental Information-
Posted on 8/23/24 at 2:36 pm
Posted on 8/23/24 at 2:36 pm
The Justice Department has filed a civil lawsuit against the real estate company RealPage, alleging the company’s software uses landlord data to artificially inflate the price of rent across the United States by quelling competition in the market.
According to the complaint, the Texas-based company uses nonpublic data from landlords to train RealPage’s algorithm for pricing recommendations, creating a “vast scheme to subvert the competitive process,” one Justice Department official said.
“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 software, according to the complaint, uses non-public data provided by landlords to see what competitors are charging or offering to maximize the amount landlords can charge as well as other ways they can make more money from renters.
“The rent is too damn high, and this is one of the reasons why,” Garland told reporters during a press conference on Friday.
LINK
According to the complaint, the Texas-based company uses nonpublic data from landlords to train RealPage’s algorithm for pricing recommendations, creating a “vast scheme to subvert the competitive process,” one Justice Department official said.
“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 software, according to the complaint, uses non-public data provided by landlords to see what competitors are charging or offering to maximize the amount landlords can charge as well as other ways they can make more money from renters.
“The rent is too damn high, and this is one of the reasons why,” Garland told reporters during a press conference on Friday.
LINK
9
Posted on 8/23/24 at 2:49 pm to ItzMe1972
This actually is a crazy price fixing scheme. The simplified version is that RealPage makes agreements with all the big rental companies in a city, and part of that agreement is they set the price of rent. Then RealPage itself inflates the price of all rentals, and no one has to price compete because RealPage controls what everyone is doing.
The building owners like it because they get to collude on price but deny the collusion. Once the scam finally came to light recently, I figured this was inevitable.
The building owners like it because they get to collude on price but deny the collusion. Once the scam finally came to light recently, I figured this was inevitable.
Posted on 8/23/24 at 3:24 pm to ItzMe1972
As someone who works on the investment side of real estate, it’ll be interesting to see that reaction.
As a consumer who has been frustrated by these pricing algorithms driving up apartment prices
As a consumer who has been frustrated by these pricing algorithms driving up apartment prices
Posted on 8/23/24 at 3:27 pm to Thundercles
quote:
This actually is a crazy price fixing scheme. The simplified version is that RealPage makes agreements with all the big rental companies in a city, and part of that agreement is they set the price of rent. Then RealPage itself inflates the price of all rentals, and no one has to price compete because RealPage controls what everyone is doing.
The building owners like it because they get to collude on price but deny the collusion. Once the scam finally came to light recently, I figured this was inevitable.
Except for the fact that no one has a monopoly on being a landlord and there's plenty of people that don't use their software.
I have no idea the % of properties that use Realpage but I highly doubt its enough of a percentage for the average person to really get upset over.
If the demand decreases, imagine this, they do drop rents. Its about maximizing their values. Tons of industries do this.
Posted on 8/23/24 at 3:31 pm to ItzMe1972
Now do the hotel industry. They buy data and make real time price changes all day long.
Posted on 8/23/24 at 3:35 pm to ItzMe1972
What the market will bear was the old saying.
Posted on 8/23/24 at 4:06 pm to ItzMe1972
(no message)
This post was edited on 10/1/24 at 12:46 pm
Posted on 8/23/24 at 5:13 pm to lsuconnman
quote:
There’s also concern the DOJ is grasping at straws. While the law doesn’t allow businesses to collude, there’s nothing to prohibit a third party from connecting businesses that could benefit from collusion.
This will be an interesting letter of the law vs spirt of the law discussion. By the letter everyone is in the clear, but clearly violates the intent. I'd probably bet on the government in this one though.
Posted on 8/23/24 at 5:13 pm to ItzMe1972
It’s confidential how much a tenant rents from a landlord? I mean if they contracted for confidentiality I guess so. It I’ve literally never seen that in a residential lease.
Posted on 8/23/24 at 5:29 pm to rmc
(no message)
This post was edited on 10/1/24 at 12:46 pm
Posted on 8/23/24 at 5:37 pm to Thundercles
I don’t see how the government can disallow this from a 3rd party. How is this different than Expedia or Googleflights at the end of the day?
I guess if they are forcing them to use their rents, it’s not a suggestion. But most of these 3rd party listing sights have suggested prices these days.
I guess if they are forcing them to use their rents, it’s not a suggestion. But most of these 3rd party listing sights have suggested prices these days.
This post was edited on 8/23/24 at 5:38 pm
Posted on 8/23/24 at 6:25 pm to lsuconnman
quote:
It’s confidential in the sense that It’s not a public record.
I get what you are saying but that’s not what confidential means to me. Rent is information between two parties that either party could generally choose to disclose to whoever they wanted. It’s not like this is protected health care information that is confidential under HIPAA.
Posted on 8/23/24 at 8:25 pm to rmc
By the same token, with the same data someone can charge less to get their apartments rented out.
Posted on 8/23/24 at 9:01 pm to baldona
quote:
I have no idea the % of properties that use Realpage but I highly doubt its enough of a percentage for the average person to really get upset over.
The article states that RealPage has 3 million doors, mostly concentrated in southern cities. Their clients are big corporate landlords that probably do control a critical mass of rental units in various cities.
quote:
By the same token, with the same data someone can charge less to get their apartments rented out.
You don't get the data without letting them dictate what price to use. It's a perversion of the market for a cartel to form and agree to not compete. It should not be permitted.
This post was edited on 8/23/24 at 9:03 pm
Posted on 8/23/24 at 11:08 pm to JohnnyKilroy
Government needs to stay out of it. They suck at everything.
You know what fixes this and flushes out the scum? A recession.
You know what fixes this and flushes out the scum? A recession.
Posted on 8/24/24 at 6:58 am to ItzMe1972
At first glance I thought this was going to be rental information bureau (like a credit bureau) that would collect rental payment data from landlords on renters when so when renters move or seek a new location a landlord could access a renter’s payment history and base rental rates on that.
Now most landlords will run a credit report on prospective renters, that could show rent in collections or even judgements on past due rent. But I had not heard of a place that would track current payments and if renters k kept their end of the bargain.
Now most landlords will run a credit report on prospective renters, that could show rent in collections or even judgements on past due rent. But I had not heard of a place that would track current payments and if renters k kept their end of the bargain.
Posted on 8/24/24 at 7:21 am to JohnnyKilroy
quote:
It's a perversion of the market
How is this different than a local landlord going on Zillow to compare what everyone else in his neighborhood is renting for, instead of just throwing a price up? It’s really not.
I’ve been involved in some pricing softwares before, they are a long ways from being perfect. For example, they have a really hard time understanding true demand for location beyond calculated variables. Especially when the data is limited. If you are talking a 500 unit high rise in a city, sure. But I’m also no sure why you need to pay for help there as those are easier to calculate and fluctuate manually.
You guys are assuming that this software does a great job. I’m sure it works to some degree, but there’s a lot of corporate and government beauracracy that sucks compared to someone local that’s experienced.
Here’s what I don’t understand, they are suggesting it’s making them more competitive. Doesn’t more competitive mean the most accurate rents to stay rented? If they are priced too high they are not rented. I don’t see how a more accurate rent, makes them illegal? More accurate doesn’t mean higher, it also means lower rent. It means priced properly.
quote:
a “vast scheme to subvert the competitive process,” one Justice Department official said. “Americans should not have to pay more in rent because a company has found a new way
ETA: this is typical government seeing that rents are high and grasping at straws at corporations cheating. Rents are high due to demand and high interest rates making buying difficult. I’d suggest that even if these corps were cheating, their pricing is likely way down the list of reasons to blame for actual high rents. They are simply taking advantage of a good market.
This post was edited on 8/24/24 at 7:33 am
Posted on 8/24/24 at 7:47 am to baldona
quote:
How is this different than a local landlord going on Zillow to compare what everyone else in his neighborhood is renting for, instead of just throwing a price up? It’s really not.
The difference is all the corporate apartment entities are giving their price setting power to RealPage that is setting it on their behalf. So instead of every landlord meeting at Denny's and saying okay, we'll charge $2000 for our apartments and no one goes any lower, they just skip the meeting at have RealPage do it for them.
In an actual competitive situation, a few apartments would have the ability and desire to dip below the prices RealPage sets, thus forcing everyone to compete and creating better prices. Since RealPage captures such a huge chunk of the market, that competition is impossible so prices remain higher.
Posted on 8/24/24 at 8:22 am to baldona
quote:
How is this different than a local landlord going on Zillow to compare what everyone else in his neighborhood is renting for, instead of just throwing a price up? It’s really not.
You’re more intelligent than this.
You don’t see a difference between a simple market analysis and a cartel that has agreed to not compete with each other?
Posted on 8/24/24 at 8:37 am to baldona
quote:
How is this different than a local landlord going on Zillow to compare what everyone else in his neighborhood is renting for, instead of just throwing a price up? It’s really not.
That’s public information.
quote:
According to the complaint, the Texas-based company uses nonpublic data from landlords to train RealPage’s algorithm for pricing recommendations
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