# How a Secret Rent Algorithm Pushes Rents Higher

"""
"We said there's way too much empathy going on here," he said. "This
is one of the reasons we wanted to get pricing off-site." [...] "The
net effect of driving revenue and pushing people out was $10 million
in income," Campo said. "I think that shows keeping the heads in the
beds above all else is not always the best strategy."
"""

Texas-based RealPage's YieldStar software helps landlords set prices
for apartments across the U.S. With rents soaring, critics are
concerned that the company's proprietary algorithm is hurting
competition.

On a summer day last year, a group of real estate tech executives
gathered at a conference hall in Nashville to boast about one of
their company's signature products: software that uses a mysterious
algorithm to help landlords push the highest possible rents on
tenants.

"Never before have we seen these numbers," said Jay Parsons, a vice
president of RealPage, as conventiongoers wandered by. Apartment
rents had recently shot up by as much as 14.5%, he said in a video
touting the company's services. Turning to his colleague, Parsons
asked: What role had the software played?

"I think it's driving it, quite honestly," answered Andrew Bowen,
another RealPage executive. "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."

The celebratory remarks were more than swagger. For years, RealPage
has sold software that uses data analytics to suggest daily prices
for open units. Property managers across the United States have
gushed about how the company's algorithm boosts profits.

"The beauty of YieldStar is that it pushes you to go places that you
wouldn't have gone if you weren't using it," said Kortney Balas,
director of revenue management at JVM Realty, referring to RealPage's
software in a testimonial video on the company's website.

The nation's largest property management firm, Greystar, found that
even in one downturn, its buildings using YieldStar "outperformed
their markets by 4.8%," a significant premium above competitors,
RealPage said in materials on its website. Greystar uses RealPage's
software to price tens of thousands of apartments.

RealPage became the nation's dominant provider of such rent-setting
software after federal regulators approved a controversial merger in
2017, a ProPublica investigation found, greatly expanding the
company's influence over apartment prices. The move helped the
Texas-based company push the client base for its array of real estate
tech services past 31,700 customers.

The impact is stark in some markets.

In one neighborhood in Seattle, ProPublica found, 70% of apartments
were overseen by just 10 property managers, every single one of which
used pricing software sold by RealPage.

To arrive at a recommended rent, the software deploys an algorithm--a
set of mathematical rules--to analyze a trove of data RealPage
gathers from clients, including private information on what nearby
competitors charge.

For tenants, the system upends the practice of negotiating with
apartment building staff. RealPage discourages bargaining with
renters and has even recommended that landlords in some cases accept
a lower occupancy rate in order to raise rents and make more money.

One of the algorithm's developers told ProPublica that leasing agents
had "too much empathy" compared to computer generated pricing.

Apartment managers can reject the software's suggestions, but as many
as 90% are adopted, according to former RealPage employees.

The software's design and growing reach have raised questions among
real estate and legal experts about whether RealPage has birthed a
new kind of cartel that allows the nation's largest landlords to
indirectly coordinate pricing, potentially in violation of federal
law.

Experts say RealPage and its clients invite scrutiny from antitrust
enforcers for several reasons, including their use of private data on
what competitors charge in rent. In particular, RealPage's creation
of work groups that meet privately and include landlords who are
otherwise rivals could be a red flag of potential collusion, a former
federal prosecutor said.

At a minimum, critics said, the software's algorithm may be
artificially inflating rents and stifling competition.

"Machines quickly learn the only way to win is to push prices above
competitive levels," said University of Tennessee law professor
Maurice Stucke, a former prosecutor in the Justice Department's
antitrust division.

RealPage acknowledged that it feeds its clients' internal rent data
into its pricing software, giving landlords an aggregated, anonymous
look at what their competitors nearby are charging.

A company representative said in an email that RealPage "uses
aggregated market data from a variety of sources in a legally
compliant manner."

The company noted that landlords who use employees to manually set
prices "typically" conduct phone surveys to check competitors' rents,
which the company says could result in anti-competitive behavior.

"RealPage's revenue management solutions prioritize a property's own
internal supply/demand dynamics over external factors such as
competitors' rents," a company statement said, "and therefore help
eliminate the risk of collusion that could occur with manual pricing."

The statement said RealPage's software also helps prevent rents from
reaching unaffordable levels because it detects drops in demand, like
those that happen seasonally, and can respond to them by lowering
rents.

RealPage did not make Parsons, Bowen or the company's current CEO,
Dana Jones, available for interviews. Balas and a Greystar
representative declined to comment on the record about YieldStar.
The National Multifamily Housing Council, an industry group, also
declined to comment.

Proponents say the software is not distorting the market. RealPage's
CEO told investors five years ago that the company wouldn't be big
enough to harm competition even after the merger. The CEO of one of
YieldStar's earliest users, Ric Campo of Camden Property Trust, told
ProPublica that the apartment market in his company's home city alone
is so big and diverse that "it would be hard to argue there was some
kind of price fixing."

What role RealPage's software has played in soaring rents--which in
the decade before the pandemic nearly doubled in some cities--is hard
to discern. Inadequate new construction and the tight market for
homebuyers have exacerbated an existing housing shortage.

But by RealPage's own admission, its algorithm is helping drive rents
higher.

"Find out how YieldStar can help you outperform the market 3% to 7%,"
RealPage urges potential clients on its website.

Few tenants know that such software, owned by a privately held
company, has had a hand in rent increases across the country.

In Boston, renter Kaylee Hutchinson said she was puzzled when her
landlord--unbeknownst to her, a RealPage client--told her days into
the first pandemic lockdowns that her rent was going up. Building
staff insisted that the market rate for her apartment was 6.5% higher
than she was paying, despite her protests that people were fleeing
the city.

[Kaylee Hutchinson's landlord, who uses RealPage's pricing software,
told her rent was going up at the start of the pandemic even as many
people were fleeing the city.]

A few weeks later, she and her fiancé saw a newly vacant unit in
their building advertised online for less. One of their landlord's
policies permitted moving to another unit owned by the company, so
they did.

Hutchinson, who is an analyst for the police department, wondered if
a computer algorithm was behind building staff's inflexibility. "It
was pretty obvious they should have been dropping prices," she said.
"They were digging their heels in."

Hutchinson said she watched apartments in her building sit vacant at
prices that didn't make sense to her.

"A normal mom-and-pop landlord, they're worried about having a good
tenant and protecting their interest in the agreement," Hutchinson
said. "These companies, they'll just replace you."

# The Origins of YieldStar

One of YieldStar's main architects was a business executive who had
personal experience with an antitrust prosecution.

A genial, self-described "numbers nerd," Jeffrey Roper was Alaska
Airlines' director of revenue management when it and other major
airlines began developing price-setting software in the 1980s.

Competing airlines began using common software to share planned
routes and prices with each other before they became public. The
technology helped head off price wars that would have lowered ticket
prices, the Department of Justice said.

The department said the arrangement may have artificially inflated
airfares, estimating the cost to consumers at more than a billion
dollars between 1988 and 1992. The government eventually reached
settlements or consent decrees for price fixing with eight airlines,
including Alaska Airlines, all of which agreed to change how they
used the technology.

At one point, federal agents removed a computer and documents from
Roper's office at the airline. He said he and other creators of the
software weren't aware of the antitrust implications. "We all got
called up before the Department of Justice in the early 1980s because
we were colluding," he said. "We had no idea."

When Roper returned to the United States in the early 2000s after a
stint in central and eastern Europe, he said, he discovered the
apartment rental industry was so far behind technologically that it
resembled the emerging markets he'd just left.

Apartment managers were "basically pricing their product on a paper
napkin," said Roper, who eventually formed his own company.

Old computers and manual recordkeeping were mainstays of the
industry. Leasing agents gauged how their buildings compared by
calling up competitors. "This was just a ripe business," with lots
of money and lots of opportunities for technological improvement,
Roper said.

RealPage hired Roper as its principal scientist in 2004 to improve
software it had bought from Camden Property Trust, a large
investor-backed owner and manager of apartment buildings.

Roper quickly realized he required data--a lot of data--to get the
algorithm working properly. He began building a "master data
warehouse" that pulled in client data from other RealPage
applications, such as those for leasing managers.

A proof-of-concept version of the software had performed well in
tests at townhouses Camden offered for rent in its home city of
Houston.

At the time, the street behind Camden's townhouses was shut down
while a grocery store was being built. Leasing staff wanted to
discount rent for the townhouses because of the nuisance, said Kip
Zacharias, who worked with Camden as a consultant.

Instead, YieldStar suggested boosting rents. "We were like, 'Guys,
just try it,'" Zacharias said.

The units ended up renting for significantly more than staff had
expected, he said. "That was kind of the eureka moment," Zacharias
said. "If you'd listened to your gut, you would have lowered your
price."

The practice of lowering rent to fill a vacancy was a reflex for many
in the apartment industry. Letting units sit empty could be costly
and nerve-wracking for leasing agents.

Such agents sometimes hesitated to push rents higher. Roper said
they were often peers of the people they were renting to. "We said
there's way too much empathy going on here," he said. "This is one
of the reasons we wanted to get pricing off-site."

Unimpeded by human worries, YieldStar's price increases sometimes led
to more tenants leaving.

Camden's turnover rates increased about 15 percentage points in 2006
after it implemented YieldStar, Campo, the company's CEO, told a
trade publication a few years later. But that wasn't a problem for
the firm: Despite having to replace more renters, its revenue grew by
7.4%.

"The net effect of driving revenue and pushing people out was $10
million in income," Campo said. "I think that shows keeping the
heads in the beds above all else is not always the best strategy."

(Reminded of that quote, Campo told ProPublica it "sounds awful" and
doesn't reflect how he or Camden views renters today. "We
fundamentally believe our customers are the most important part of
our business," he said. "We're not about pushing people out.")

Hiking rents at the same time benefited all landlords, the industry
learned. "A rising tide lifts all boats," one real estate executive
and revenue management proponent told the industry publication Yield
Pro in 2007.

One of the greatest threats to a landlord's profit, according to
Roper and other executives, was other firms setting rents too low at
nearby properties. "If you have idiots undervaluing, it costs the
whole system," Roper said.

Jeffrey Roper helped develop YieldStar, which uses an algorithm to
suggest prices for apartments across the country.

Roper wasn't the only technologist working on an apartment pricing
algorithm. Donald Davidoff, the primary developer of rival software
called Lease Rent Options, or LRO, said he designed his program
differently, to head off any concerns about collusion.

Instead of relying on a digital warehouse that includes competitor
data, Davidoff used a complex formula and public market data to steer
LRO's algorithm. The system relied on incremental price shifts to
manage demand for apartments, said Davidoff, an MIT-educated former
rocket engineer. "That's not dissimilar to changing a trajectory of
a rocket through inflection of a nozzle," he said--making small
changes that can dramatically alter something's course over time.

Davidoff said he was careful to avoid features that might run counter
not only to anti-discrimination laws, such as the Fair Housing Act,
but also those that bar competitors from conspiring to set prices.

"I had many conversations with attorneys to understand where the
boundaries are," he said. "Anybody who's building one of these
systems or is involved in these should care a lot about fair housing
and should care a lot about price collusion to avoid both."

Roper told ProPublica that when he was developing the YieldStar
software more than a decade ago, he was concerned about avoiding both
issues. He also said he didn't want to misuse private data in
pricing.

"I was highly sensitized to: You just don't do it," Roper said.

Despite differences in the software's design, RealPage acquired LRO
in 2017 after months of scrutiny by the antitrust division of the
justice department. Federal regulators review mergers above a
certain size--right now, it is transactions valued at $101
million--and typically allow them to proceed after only a preliminary
review. But some are flagged for a more extensive look. The
government can challenge a merger in court if it believes it could
substantially harm competition.

RealPage's purchase of LRO received such a second look, but the DOJ
allowed it to proceed in late 2017. The department did not respond
to requests for comment.

The approval allowed RealPage to acquire its only significant
competitor, Roper said, adding, "I was surprised the DOJ let that go
through."

RealPage was pricing 1.5 million units, and the acquisition of LRO
would double that, Steve Winn, RealPage's then-CEO, said at a
mid-2017 investor conference. "I don't think there's any
concentration, enough concentration, of buying or pricing power here"
to warrant DOJ concerns, he said. A third company had a substantial
footprint in the market, Winn said, but property managers' own manual
pricing processes or proprietary systems were RealPage's largest
competitor.

"We expect our combined platform to drive accelerated, sustained
revenue growth," Winn said in a media release announcing the deal.

RealPage's influence was burgeoning. That year, the firm's target
market--multifamily buildings with five or more units--made up about
19 million of the nation's 45 million rental units. A growing share
of those buildings were owned by firms backed by Wall Street
investors, who were among the most eager adopters of pricing
software.

RealPage renamed its combined pricing software AI Revenue Management.
By the end of 2020, the firm was reporting in a Securities and
Exchange Commission filing that its clients used its services and
products to manage 19.7 million rental units of all types, including
single-family homes. The private equity firm Thoma Bravo bought the
public company a few months later for $10.2 billion.

Winn, whose net worth Forbes estimates at $1.7 billion, stepped
aside. He did not respond to requests for comment.

A spokesperson for Thoma Bravo declined to comment.

# Who Uses the Software and How It Works

Somewhere around 2016, according to one trade group, the industry's
use of the pricing software began to achieve "critical mass."

The more property managers who sign on to RealPage services, the more
data flows into the company's repository. That in turn aids its
pricing service, which the company says "leverages multifamily's
largest lease transaction database."

RealPage's clients include some of the largest property managers in
the country. Many favor cities where rent has been rising rapidly,
according to a ProPublica analysis of five of the country's top 10
property managers as of 2020. All five use RealPage pricing software
in at least some buildings, and together they control thousands of
apartments in metro areas such as Denver, Nashville, Atlanta and
Seattle, where rents for a typical two-bedroom apartment rose 30% or
more between 2014 and 2019.

Greystar and FPI Management each control hundreds of buildings in
metro areas where rents have risen steeply in recent years. And
Equity Residential, Lincoln Property Company and Mid-America
Apartment Communities each manage dozens of buildings in high-growth
markets.

In contrast, these same companies control fewer buildings in metro
areas such as Philadelphia, Tampa and Chicago, where rents have
increased more slowly, the analysis found.

Many factors may cause RealPage clients to cluster in high
rent-growth markets. The company's clients may gravitate toward such
markets because those areas will bear more rent hikes and so offer an
opportunity to make more money, for instance. But RealPage says its
software steers pricing that beats the market in areas where it
operates.

RealPage's algorithm calculates how demand for apartments responds to
changes in price--what's known as price elasticity.

The algorithm takes into account characteristics of apartments, like
the number of bedrooms. It also considers factors such as how many
more of a complex's apartments are likely to become available in the
near future. Property managers can adjust settings according to
their priorities--such as how full they want their buildings to be.

The software also analyzes rent prices in the broader market, the
company said. That data can provide insight into how competitors'
buildings located near the client--such as within, say, a half-mile
or mile radius--are being priced, said Ryan Kimura, a former RealPage
executive.

One advantage RealPage's data warehouse had was its access to actual
lease transactions--giving it the true rents paid, instead of simply
those a landlord advertised, RealPage said.

Property managers can't look at the unpublished data any one rival is
sharing with YieldStar, Roper and other former RealPage employees
said.

Nicole Lott said that when the building where she worked as a
property manager near Dallas started using YieldStar, the software
determined that similar buildings in the area were charging more. It
pushed for steep increases.

"It really jumped rates up," Lott said. "Leasing slowed down to a
crawl."

She and other staff challenged the software, asking the division of
her company that oversaw YieldStar for a review, she said. The
landlord ended up raising rates more graduly, she said.

"We didn't think we could get those rates," she said. "In some cases
we were right and in some cases we might have been wrong."

Kimura, a former RealPage executive who worked at the firm for three
years before leaving in 2021, said the company would typically see
pushback from property staff on about 10%-20% of the software's
recommendations. It was part of the process. "If they are approving
every rate and it's 100% acceptance," he said, "they basically have a
blindfold on and are pushing a button."

RealPage claims its software will increase revenue and decrease
vacancies. But at times the company has appeared to urge apartment
owners and managers to reduce supply while increasing price.

During an earnings call in 2017, Winn said one large property
company, which managed more than 40,000 units, learned it could make
more profit by operating at a lower occupancy level that "would have
made management uncomfortable before," he said.

The company had been seeking occupancy levels of 97% or 98% in
markets where it was a leader, Winn said. But when it began using
YieldStar, managers saw that raising rents and leaving some
apartments vacant made more money.

"Initially, it was very hard for executives to accept that they could
operate at 94% or 96% and achieve a higher NOI by increasing rents,"
Winn said on the call, referring to net operating income. The
company "began utilizing RealPage to operate at 95%, while seeing
revenue increases of 3% to 4%."

But the software's supporters say it's not driving the nation's
housing affordability problem.

Though soaring rent is giving the industry a "black eye," Campo said,
the culprit is a lot of demand and not enough supply--not revenue
management software. The software just helps managers react to
trends faster, he said.

"Would you rather do your work today on a typewriter or a computer?"
he asked. "That's what revenue management is."

Using software like YieldStar is "taking what we used to do manually
on a yellow pad and calling people on the phone and putting it on a
codified system where you take the errors out of the pricing," he
said.

# RealPage, Seattle and Rising Rents

To see how rent-setting software can make a difference, look no
further than Seattle, where over the last few years rents have risen
faster than almost anywhere in the country, some studies show.

Large apartment buildings in one ZIP code just north of downtown,
sandwiched between the Space Needle and Pike Place Market, are
overwhelmingly controlled by RealPage clients, ProPublica found.

The trendy Belltown neighborhood, with its live music venues and
residential towers, had 9,066 market rate apartments in buildings
with five or more units as of June, according to the data firm CoStar
and Apartments.com. Property management was highly concentrated: The
ZIP code's 10 biggest management firms ran 70% of units, data showed.

All 10 used RealPage's pricing software in at least some of their
buildings, according to employees, press releases and articles in
trade publications.

Expensive markets with high rents, like Seattle, tend to have "very
high" rates of revenue management use by landlords, Roper said.

Two buildings in the ZIP code--one with revenue management software
and the other without--reveal diverging approaches to pricing
apartments.

The Fountain Court apartments, 320 units clustered around a courtyard
with a fountain, are about a half-mile from Amazon's corporate
headquarters. The building is owned and managed by Essex Property
Trust, whose executives told investors in a 2008 earnings call that
they were implementing YieldStar in the trust's apartment buildings.

At the Fountain Court, rent has risen 42% since 2012, CoStar data
shows--steeper than the 33% average increase for similar downtown
buildings.

Tenant Amanda Tolep and her husband were approaching the end of their
lease for a one-bedroom at the six-story building near the end of
2021 when they learned rent would jump about $400, to $1,600. The
increase amounted to 33%--in one year.

Tolep had been working as a barista and launching her own
nutrition-related business. Her husband worked for a bank. They
expected their rent to go up, knowing they had received a "COVID
deal." But the size of the jump, along with other nuisances--like
stolen packages and noise from a nearby fire station--led them to
look elsewhere.

After finding prices similar to their raised rent at several other
neighborhood buildings, the couple decided to leave the city and move
a half-hour's drive north.

A spokesperson for Essex declined to comment. None of the other
biggest property managers commented on the record about their use of
revenue management.

About six blocks away, rent has not gone up as dramatically at The
Humphrey Apartments, a historic six-story brick building with 74
units.

John Stepan's rent stayed relatively steady in a building that did
not use RealPage's pricing software.

John Stepan, a writer for a tech company, moved into a studio in the
1923 building a little more than a year ago. It was small, but he
liked the high ceilings, hardwood floors and farmhouse-style kitchen.
He had secured a COVID deal, too: one month free, with rent of
$1,295 a month after that.

A few months before his lease was up, the building notified him that
rent would increase by $50, which amounted to about a 3.9% rise. "It
was surprisingly low," said Stepan, who left only because he found a
condo to buy nearby.

Tami Drougas, the asset manager who oversees The Humphrey and two
other Seattle-area buildings for the local real estate developer who
owns them, said she doesn't use a revenue management system.

"I don't believe in them," she said. "That's great and fine for
larger corporations. But I think it takes the humanity out of what
we do."

After 24 years in the industry, she said, she sees good relationships
with tenants and vendors as the key to running a building
successfully. She said The Humphrey has low costs related to
vacancies.

The building's rent has barely budged in recent years, she
acknowledged. "We have a lot less turnover and I feel like that
keeps expenses down," Drougas said.

Seattle has been hit particularly hard by soaring rents. One report
found the city had the steepest rent growth of any major city in the
nation over the decade ending in 2019. Almost 46,000 Seattle
households were spending more than half their incomes on housing,
making them what federal standards call "severely cost-burdened,"
according to a 2021 study the city commissioned. Many families have
trouble paying for necessities like food and medical care when their
rent eats up 30% or more of their income.

"Many others have been priced out of Seattle altogether due to
rapidly rising rents and housing prices," the study said.

It also found that people with higher incomes often "down rented,"
choosing cheaper apartments that would otherwise have been available
to people making less. Seattle should have had a surplus of 9,000
apartments affordable to people making 80% or less of the median
income, the study found. But tenants' down renting as prices rose
turned that surplus into a deficit of 21,000.

Newly Rent-Burdened Workers Range From Accountants to Groundskeepers

In metro Seattle, more people in a variety of jobs are spending over
30% of their income on rent. Below are the 10 occupations where the
share of rent-burdened households jumped the most.

The number of apartments controlled by the country's 50 largest
property managers has grown every year for 14 years, according to the
National Multifamily Housing Council, which surveys buildings with
five or more units.

Those firms oversaw about 1 in 6 such apartments nationwide in 2019,
amounting to 3.6 million units. By 2021, the number had risen to
almost 4.2 million.

James Nelson, a former bank examiner and loan broker, noticed the
concentration of landlords when he and his partner moved to Seattle
in 2018.

Troubled by astronomical home sale prices and high rents, Nelson
began looking at what was happening in the broader market.

After some digging, he found that many if not most of the bigger
apartment managers in Seattle appeared to be using price-setting
software. "The name RealPage kept popping up," said Nelson, who is
retired and writing a book on his research. "I went in and looked at
the technologies that they were using."

He concluded the landlords were using tech to do exactly what
RealPage advertised it could do--help them charge high rents and beat
the market.

"There is no competition," he said.

# Concerns About Competition

RealPage's software has gained traction at a time when the Biden
administration, concerned about rising prices and corporate
concentration, is looking to bolster enforcement of rules meant to
ensure competition is flourishing.

To win cases, antitrust prosecutors have traditionally needed to show
that competitors agreed among themselves to tamper with pricing. "If
competitors agreed among themselves to use the same algorithm and to
share information among themselves with the purpose of stabilizing
pricing, that would be per se illegal," said Stucke, the former
antitrust prosecutor.

If they simply shared information without agreeing to manipulate
pricing, the question of whether antitrust law was violated would be
more complex, he said. Stucke said he knew of no cases where
companies had been prosecuted for what's known as tacit collusion
while using the same algorithm to set prices.

But Maureen K. Ohlhausen, who was then the acting chair of the
Federal Trade Commission, said in a 2017 talk that it could be
problematic if a group of competitors all used the same outside
firm's algorithm to maximize prices across a market.

She suggested substituting "a guy named Bob" everywhere the word
algorithm appears.

"Is it OK for a guy named Bob to collect confidential price strategy
information from all the participants in a market and then tell
everybody how they should price?" she said. "If it isn't OK for a
guy named Bob to do it, then it probably isn't OK for an algorithm to
do it either."

Through a representative, Ohlhausen declined to comment on RealPage.

RealPage's software raises multiple concerns, experts said.

Courts have frowned on sharing nonpublic data among competitors.
Lease transaction data is not always public.

As far as RealPage's claim on its website that it uses "disciplined
analytics that balance supply and demand to maximize revenue growth,"
Stucke said that businesses can't usually control supply and demand
on their own. "Normally that's left to market forces," he said.

The RealPage User Group--the forum for apartment managers who use the
company's products--encourages rivals to work together, something
that has been challenged as anti-competitive in antitrust
prosecutions, too. The company's website says the group aims to
"promote communications between users," among other things.

Starting out with 10 members in 2003, the group has grown to more
than 1,000 participants, according to the website. A dozen
scommittees, including two focused on revenue management, meet in
invitation-only sessions at the company's annual conference,
RealWorld, and participate in a conference call each quarter.

Those sorts of collaborations, Stucke said, "could raise an antitrust
red flag."

If clients are tampering with market forces, their assertions in
RealPage marketing videos that its software keeps prices and
occupancy "more stable" could also become relevant in court, Stucke
said. Similar comments have been used as evidence in previous
antitrust cases.

And the exhortations by RealPage and real estate executives for
companies to use YieldStar and let some units sit vacant to raise
prices are reminiscent of a legal case in the early 1900s, he said,
where lumber companies shared information and a directive to reduce
supply in order to push up prices.

In an email to ProPublica, RealPage dismissed the notion that the
company was using market data improperly.

The company said that using actual rents helps the company "capture a
truer picture of price elasticity and affordability," which reduces
the odds a unit is overpriced. And the lease transaction data
RealPage is using isn't always private; sometimes such data is
disclosed, the company said, such as when publicly traded real estate
firms make reports.

The FTC, which has broad authority to bring enforcement cases against
businesses for anti-competitive practices, said in 2021 that it was
seeking a more active role in such cases.

A spokesperson for the FTC declined to comment on RealPage's pricing
software.

The agency has tangled with RealPage before: In 2018, the company
agreed to pay $3 million to settle an FTC complaint that the company
had failed to do enough to make sure personal information used in its
tenant screening product was accurate. RealPage did not admit
wrongdoing in the settlement.

# Higher Rents Are Burdening More Tenants

Drama over rising rent costs--now a key driver of inflation--has been
increasingly public. The year before the pandemic, roughly 46% of
renters in the U.S. spent more than 30% of their income on rent and
therefore met the definition of cost-burdened, Harvard University's
Joint Center for Housing Studies found.

In mid-September in Washington, D.C., angry protesters disrupted the
normally sedate yearly conference held by the National Multifamily
Housing Council. Before security ejected them, they seized the stage
and recounted how their families had been harmed by an inability to
find safe, affordable housing.

At the center of the acrimonious debate has been RealPage's Jay
Parsons.

Since RealPage's own July conference, he's repeated a statistic,
compiled from a company data set of new lease transactions, that
market-rate apartment renters are only spending around 23% of their
income on rent.

"The reality is that rents can only rise as incomes rise," Parsons
told The New York Times last month. "If people can't afford it, you
can't lease it."

But his sunny view has drawn sharp rebukes.

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"This is demonstrably false," wrote Ben Teresa, co-director of the
RVA Eviction Lab at Virginia Commonwealth University, on Twitter.
"One of the defining characteristics of housing markets in the last
40 years has been rents increasing faster than wages.

"The problem is quite precisely that people are paying rents they
can't afford," he wrote.

From:
https://propublica.org/article/yieldstar-rent-increase-realpage-rent