Congressman Dan Goldman Urges New York Attorney General to Investigate Potential Rental Market Manipulation and Price Gouging by Realpage, Inc.
RealPage’s Price Optimization Software Recommends Artificially Inflated Rent Prices, Potentially Incentivizes Market Manipulation and Anti-Competitive Landlord Behavior
RealPage Clients Include Many of Largest NYC Landlords; Potential Contributor to Housing Affordability Crisis in New York
Read the Letter Here
New York, NY – Congressman Dan Goldman (NY-10) today sent a letter to New York Attorney General Letitia James calling for her office to investigate the multinational, multi-billion dollar company RealPage Inc., which has been accused of anticompetitive behavior and manipulating market rent rates through their price optimization software, YieldStar.
YieldStar analyzes non-public rental data from RealPage’s multitude of clients to recommend artificially inflated rent prices, facilitating pricing collusion and eliminating traditional market competition.
RealPage is a Texas-based company whose stated goal is to help “owners, operators, property managers and investors unlock value faster and achieve peak performance…” Their clients include some of New York City’s largest landlords and property managers, including Equity Residential, Greystar, and Cushman & Wakefield.
“As the dire need for affordable housing continues to grow in New York City, I urge you to investigate the multinational company RealPage Inc., which has been accused of anticompetitive behavior and manipulating market rent rates through their price optimization software,” Congressman Dan Goldman wrote. “A number of New York’s largest landlords are among RealPage’s clients and potential benefactors from this possible anticompetitive price-fixing.”
In New York City, the average monthly rent is $5,158 and $3,909 in Manhattan and Brooklyn respectively, a 22 percent and 13 percent increase from February 2020 levels, before the COVID-19 pandemic. Nearly half of New Yorkers pay over 30 percent of their income on rent and nearly a quarter report that over half of their income goes to rent payments.
“There is clearly broad interest in holding bad actors accountable for using anticompetitive practices in the rental market in the United States,” Congressman Dan Goldman continued. “Their abhorrent behavior favors profits over affordability for the many low- and moderate-income families in our cities and neighborhoods desperate for reasonably priced housing. This is an issue that is particularly acute in my Tenth Congressional District in New York, where rent prices continue to grow at a rate that far outpaces what residents can afford.”
RealPage has recently come under intense scrutiny during the current affordable housing crisis. Both the Department of Justice (DOJ) and the Federal Trade Commission have been asked to investigate and review the use of RealPage’s price optimization software. State Attorney General Brian L. Schwalb in the District of Columbia has filed a lawsuit against RealPage, alleging anti-trust rental market manipulation. There were also over 20 private civil lawsuits filed in the state of Tennessee that have since been consolidated. The DOJ has filed a memorandum in Tennessee in support of these lawsuits.
Congressman Goldman is committed to supporting New York’s working families by ensuring they have access to safe, quality, affordable housing.
As one of his first acts in Congress, Goldman and Congresswoman Nydia Velázquez (NY-07) introduced the ‘Public Housing Emergency Response Act.’ This bill would allocate $70 billion in funding for capital repairs and upgrades to public housing throughout the country. $32 billion of the allotted aid would be expected to flow directly to the New York City Housing Authority, the nation’s largest Public Housing Authority.
Additionally, the Congressman cosponsored the 'Affordable Housing Credit Improvement Act' to expand and strengthen the Low-Income Housing Tax Credit and spur collaboration between private-sector resources and state-level government administration to build and rehabilitate millions of affordable homes across the country.
Congressman Goldman is also founding member of the Congressional Renter’s Caucus which will work to expand assistance for all eligible cost-burdened renters, eliminate bureaucratic and discriminatory barriers to accessing affordable housing; and improve the quality, availability, and affordability of our nation’s rental housing stock.
Read the letter here or below:
Dear Attorney General James,
As the dire need for affordable housing continues to grow in New York City, I urge you to investigate the multinational company RealPage Inc., which has been accused of anticompetitive behavior and manipulating market rent rates through their price optimization software. A number of New York’s largest landlords are among RealPage’s clients and potential benefactors from this possible anticompetitive price-fixing.
RealPage Inc. is a Texas-based company whose stated goal is to help “owners, operators, property managers and investors unlock value faster and achieve peak performance…”, and in 2021 the company was valued at $10.2 billion. Among their suite of products is a software tool targeted to landlords which analyzes large swaths of rental data from competitors operating in the same market and recommends artificially inflated rent prices based on non-public pricing information. In fact, their website boasts that they can help clients “achieve a 3% - 7% revenue lift.”
This tool, dubbed YieldStar, is particularly dangerous because it relies on unfiltered access to a market’s competitive data set. Moreover, in 2017, RealPage completed a merger with their largest pricing competitor, Lease Rent Options (LRO), making them a preeminent price optimization provider. Included in their long list of clients are some of New York City’s largest landlords and property managers, including Equity Residential, Greystar, and Cushman & Wakefield. RealPage now has unprecedented access to public and private landlord data in New York City, which facilitates pricing collusion and eliminates traditional market competition.
An investigation by ProPublica in 2017 revealed that “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.” The report also noted that as many as 90% of suggestions made to apartment managers through the YieldStar product are adopted. In New York City, rent prices have become an increasingly overwhelming burden for renters, with new leases averaging $5,158 and $3,909 in Manhattan and Brooklyn, respectively. Those numbers reflect a 22% and 13% increase from February 2020 levels. With rents skyrocketing in New York, I urge you to investigate how RealPage may have contributed to this situation through their anti-competitive pricing behavior.
Further, RealPage has been the target of scrutiny by lawmakers across the country. In November 2022, Senators Klobuchar, Durbin and Booker wrote to Assistant Attorney General Jonathan Kanter at the Department of Justice (DOJ), asking the Antitrust Division to open an investigation into RealPage. That same month, Chairman Sherrod Brown of the Senate Banking, Housing and Urban Affairs committee sent a letter to Federal Trade Commission (FTC) Chair Lina Khan, asking her to review the use of “price optimization software employed by property owners to set rents,” specifically citing YieldStar. A group of members from the House, led by Congressman Jesús G. “Chuy” García, also wrote to both the DOJ and the FTC echoing the Senators’ sentiments.
In addition, there have also been a number of lawsuits filed against RealPage including one filed by Attorney General Brian L. Schwalb in the District of Columbia, and one in Tennessee that combines over 20 suits filed against the company. On November 6th, 2023, the DOJ officially filed a memorandum with the Tennessee case in support of the antitrust lawsuits filed against RealPage.
There is clearly broad interest in holding bad actors accountable for using anticompetitive practices in the rental market in the United States. Their abhorrent behavior favors profits over affordability for the many low- and moderate-income families in our cities and neighborhoods desperate for reasonably priced housing. This is an issue that is particularly acute in my Tenth Congressional District in New York, where rent prices continue to grow at a rate that far outpaces what residents can afford.
I therefore urge you to investigate RealPage and its clients for further evidence of anti-competitive, anti-consumer behavior in New York State.
Thank you for your consideration.
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