Senators urge DOJ to scrutinize landlords’ use of RealPage tool to lift rents

4 U.S. senators are calling at the Justice Division to appear intently at how Richardson-based RealPage’s tool is utilized by large landlords.

Democratic Sens. Elizabeth Warren, Tina Smith, Bernie Sanders and Ed Markey despatched a letter March 2 to Assistant Legal professional Basic Jonathan Kanter on their considerations concerning the function algorithmic rent-setting tool akin to RealPage’s YieldStar performs in surroundings costs for apartment homes.

The letter comes after ProPublica revealed an investigation on using RealPage’s tool by means of landlords in October. In November, the Division of Justice opened an investigation into whether or not RealPage is facilitating collusion amongst landlords as questions arose a couple of 2017 merger between RealPage and its greatest pricing competitor, ProPublica reported.

“The upward push of institutional buyers and rent-setting algorithms have weakened pageant within the already strained housing marketplace, leading to substandard services and products and unnecessarily top housing prices for American households,” the senators wrote. “It’s due to this fact crucial that the dep. use all of its gear to be sure that renters don’t fall sufferer to company landlords and anti-competitive forces.”

The senators opened their very own investigation into YieldStar in November, soliciting for data on how the rent-setting tool has affected the apartment housing marketplace.

They stated the corporate didn’t supply them with all of the data they asked however famous that RealPage’s web page states its revenue-management tool is used for greater than 4 million gadgets and components in rent transaction knowledge for greater than 13 million gadgets.

The senators wrote that data equipped to them by means of RealPage additionally published that using YieldStar has been maximum prevalent in one of the crucial areas maximum closely focused by means of company consumers and with the best lease will increase.

“Even the popular use of its anonymized and aggregated proprietary apartment knowledge by means of the rustic’s greatest landlords may lead to de-facto price-setting by means of the ones corporations, riding up costs and hurting renters,” the senators wrote. “Given those findings, the DOJ will have to act to offer protection to American households and intently assessment rent-setting algorithms like YieldStar to decide if they’re having anti-competitive results on native housing markets that experience noticed larger institutional investor process.”

RealPage went public greater than a decade in the past in a inventory sale valued at $135.3 million. It used to be received and brought personal by means of personal fairness funding company Thoma Bravo in a $10.2 billion deal in 2021.

In a remark equipped to The Information according to the senators’ letter, RealPage stated, “RealPage appreciates the chance to paintings with the senators’ workplaces and, extra in most cases, we’re at all times prepared to interact coverage stakeholders to verify an educated and complete figuring out of the advantages we give a contribution to the apartment ecosystem.”

Important Deputy Legal professional Basic Doha Mekki stated at an antitrust convention in Miami in February that the Justice Division’s antitrust department used to be retreating steering issued between 1993 and 2011 that defined permissible behavior associated with data sharing, Bloomberg Regulation reported.

“This steering equipped a secure harbor to corporations like RealPage, and we now know—in keeping with the findings of our investigation—that secure harbor could have equipped doable alternatives for de facto collusion and value surroundings,” the senators wrote of their letter.

In keeping with Bloomberg Regulation, Mekki stated the larger use of algorithms, the rate of knowledge and the facility of corporations to de-anonymize delicate data require new scrutiny.

2023 The Dallas Morning Information.
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