Washington Attorney General, Nick Brown, recently announced a lawsuit against RealPage and several landlords in the state. The lawsuit alleges that RealPage, a Texas software company that provides tools to landlords to determine rental rates and other lease terms, used sensitive data from landlords to keep rent prices artificially high.
“RealPage’s unfair practices are cheating renters and pricing families out of stable housing,” said Brown in a recent press release.
Don’t miss
- I’m 49 years old and have nothing saved for retirement — what should I do? Don’t panic. Here are 5 of the easiest ways you can catch up (and fast)
- Gain potential quarterly income through this $1B private real estate fund — even if you’re not a millionaire. Here’s how to get started with as little as $10
- Car insurance premiums could spike 8% by the end of 2025 — thanks to tariffs on car imports and auto parts from Canada and Mexico. But here’s how 2 minutes can save you hundreds of dollars right now
Brown continued, “Washington is facing a housing crisis and we must respond with every available tool.”
RealPage isn’t a stranger to lawsuits. In fact, the U.S. Justice Department sued RealPage for similar reasons, including the algorithmic pricing scheme, late in 2024.
The company faces similar lawsuits in North Carolina, California, Colorado, Connecticut, Minnesota, Oregon and Tennessee.
For its part, RealPage provided K5 with a statement, refuting the claims in the suit, calling them "devoid of merit," adding its "revenue management software is purposely built to be legally compliant and has always used data legally and responsibly."
Washington’s case
Many landlords used RealPage to help determine appropriate rental prices for apartments.
According to the lawsuit, Washington property managers used this software to price out an estimated 800,000 leases in the state between 2017 and 2024.
As the AG’s investigation revealed, RealPage’s pricing software uses nonpublic, competitively sensitive market information. In general, the algorithm tended to suggest raising rents. For some renters, the suggestions led their landlords to impose steep rent increases.
Chris Vialpando, a renter in Seattle’s Lower Queen Anne neighborhood, experienced a 50% rent increase after his landlord started using RealPage to price rental units.
“I was almost homeless for a short second there because I really had to dig deep to figure out how I was going to do it,” Vialpando told K5.
His story is one of many that sparked the AG’s office to take action.
The complaint alleges that based on participating landlords and their rivals’ competitively sensitive information, these landlords were able to avoid having to compete independently to attract renters based on pricing, discounts, concessions, lease terms and other lease terms — as they would have to in a free market.
It also alleges that RealPage used this scheme and its “substantial data trove” to maintain a monopoly in the commercial revenue management software market.
Finally, the investigation found that RealPage’s rental price suggestions generally lead to higher costs for renters.
Brown’s release alleges the RealPage tool violates Washington’s Consumer Protection Act, which is designed to keep the state free of unfair and deceptive business practices.
Read more: Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don’t have to deal with tenants or fix freezers. Here’s how
How price fixing impacts renters
The crux of the price-fixing scheme is the fact that landlords shared sensitive data with RealPage. In turn, landlords used the tool knowing that other landlords contributed sensitive data to the algorithm.
One potential client of RealPage said, “I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing.”
A big red flag is that the RealPage software makes it difficult for a landlord to avoid taking the software’s suggestions.
Instead, it suggests accepting the price recommendations automatically. If a landlord using the software wanted to charge a different rate, they must provide a reason to the company.
Additionally, RealPage recommended landlords enforce 13-month rental terms. This long timeline prevents too many units from hitting the market at the same time, which helps keep rent rates higher.
From a landlord’s point of view, the tool offers an opportunity to charge more for rent. But colluding with other landlords isn’t legal because it doesn’t allow for the market forces of supply and demand to settle at a reasonable and fair market rate.
As of writing, the average rent for a 699-square-foot apartment in Seattle is $2,252. Within the state, the Washington State Standard reports approximately one-third of households spend more than 30% of their household income on housing costs, making them “cost-burdened.”
Unfortunately, this pressure can put many renters into unstable housing situations that sometimes lead to homelessness.
While the impacts of artificially high rents based on RealPage recommendations initially only impacted the renters unlucky enough to have a landlord using RealPage, it’s likely the higher rents rippled out into the marketplace.
With that, these actions may have gone beyond displacing individual families to put additional pressure on housing affordability and possibly worsened the housing crisis.
What to read next
- Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
- Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
- Do you rely on your monthly Social Security check to get by? Here are 5 simple money moves for American seniors during Trump’s presidency
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
