Attorney General Bob Ferguson files antitrust lawsuit against RealPage, alleging rent inflation in Washington | Local

SEATTLE — Washington state Attorney General Bob Ferguson has joined with eight other state attorneys general and the U.S. Department of Justice to file a lawsuit against RealPage, a software company accused of working with landlords to artificially inflate rent prices. The lawsuit, filed in the U.S. District Court for the Middle District of North Carolina, accuses RealPage of sharing confidential information with landlords to increase profits at the expense of tenants.

RealPage’s software is said to have influenced rental prices for around 800,000 rental contracts in Washington since 2017. By sharing non-public, competition-relevant data, the company helped landlords coordinate and increase rental prices, the lawsuit says. As a result, competition in the rental market has declined significantly.

A potential RealPage customer reportedly described the company’s practices as “classic price-fixing.”

In addition to using software that generates pricing recommendations based on this shared data, RealPage also organizes “user group” meetings where landlords are encouraged to discuss pricing strategies. This practice is thought to contribute to the inflated rents across Washington, a state that already struggles with some of the highest housing costs in the country.

The Role of RealPage Software in Increasing Rental Prices

RealPage’s software products, including AI Revenue Management (AIRM), Yieldstar and Lease Rent Options (LRO), are designed to help landlords set rental prices, but the lawsuit alleges that the software often suggests maintaining or increasing rental prices even when landlords are facing low occupancy rates – a situation that would normally result in lower rents in a competitive market.

The lawsuit shows how RealPage’s tools allow landlords to share confidential data and coordinate pricing strategies, driving up rents. For example, the software encourages rent increases even when apartments are vacant.

Attorney General Ferguson emphasized the negative impact of these practices on working families, stating, “RealPage has conspired to fix prices and continue to increase rents in order to increase profits. My legal team and I will fight against these collusion and fight for affordable rents for Washington residents.”

Objectives of the investigation and the trial

Ferguson’s office launched an investigation into RealPage in January 2023 after ProPublica revealed that the company’s software was linked to nationwide rent increases. The lawsuit accuses RealPage of violating the federal Sherman Antitrust Act by using its algorithm to limit competition and increase landlords’ profits.

The lawsuit seeks to put an end to RealPage’s allegedly illegal practices, prevent landlords from sharing sensitive, nonpublic data, and protect Washington tenants from further exploitation of the rental market.

Attorney General Ferguson’s legal team, which includes several assistant attorneys general and economic analysts, will continue to fight for justice on behalf of Washington tenants as the case progresses.

This lawsuit represents an important step against rent inflation in Washington as the state continues to struggle with rising housing costs.