Original Article By John Loftus
American renters finally breathed a sigh of relief this fall. In October, The Wall Street Journal reported that rent prices were finally slowing down after the great spikes of the COVID-19 years. The average national rent fell 0.3% from August, which doesn’t seem like a lot, but was actually the steepest September drop in over 15 years.
One major factor in the housing affordability crisis was not in the WSJ’s story, though. It reared its ugly head about a month after the report was published, as all of us were stressed out cooking and preparing for Thanksgiving dinner.
Quietly, under the cover of the Thanksgiving holiday week, the Trump Department of Justice settled a lawsuit that will have massive implications for renters across America – maybe even you. Conservative media doesn’t want to talk about it much, and, as far as I know, Fox News didn’t cover the big news (even if they did, they would likely feed you a sanitized spin piece pitched by a PR flak).
But I want to give it to you straight while peeling back some layers on the colluding powers screwing over just about everyone.
The unexpected slowdown is mainly attributed to the glut of new apartment units, built during a construction boom, that are “taking longer to absorb than expected.” Despite the construction boom of multi-family housing tapering off, WSJ reported, landlords won’t be able to continue jacking up the prices due to all this new supply.
WASHINGTON, DC – AUGUST 23: U.S. Attorney General Merrick Garland speaks during a press conference at the U.S. Department of Justice on August 23, 2024 in Washington, DC. Officials with the Department of Justice held the news conference to make an announcement pertaining to their antitrust lawsuit against the real estate software company RealPage. (Photo by Anna Moneymaker/Getty Images)
Mega, private-equity-backed landlords, such as Greystar and Cortland, use a software offered by RealPage, itself a private-equity-backed company based in Texas.
RealPage software is a devious little machine that allegedly price-gouged Americans for years. In October 2022, Heather Vogell published an investigative piece at ProPublica on how RealPage played a role in the massive, post-COVID rental price spikes. The report was a real eye-opener for many, exposing an apparent web of conspiracy and prompting state and federal governments to intervene.
The company collected data on real-time pricing and supply levels, and then took the data to make unit-specific pricing and supply decisions, according to the investigation. This information was allegedly shared between all of the customers, i.e., the corporate landlords, who were, in turn, able to keep rent prices artificially high and burden renters with junk fees. RealPage also allegedly made it hard for landlord employees to lower rent or give concessions to residents.
One RealPage executive, Andrew Bowen, bragged that the software keeps rent high.
“I think it’s driving it, quite honestly,” Bowen said, according to ProPublica. “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.”
In other words, this seems to be an illegal price-fixing scheme, which is why the Biden DOJ launched an antitrust lawsuit in August of 2024. Eight other states (California, Colorado, Connecticut, Massachusetts, Minnesota, North Carolina, Oregon, and Tennessee) also filed monopolization and antitrust lawsuits. According to the DOJ’s antitrust complaint, a landlord had said of a RealPage product, “I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing.”
But on Nov. 25, Gail Slater, Trump’s Antitrust Division chief, announced that the Antitrust Division had settled the government’s lawsuit with RealPage. Slater claimed the outcome was a big win for renters and families, even though it seems to amount to a childish slap on the wrist.
LOS ANGELES, CALIFORNIA – JANUARY 25: Construction workers help build a mixed-use apartment complex which will hold over 700 units of apartment housing and 95,000 square feet of commercial space on January 25, 2024 in Los Angeles, California. Economic data from the Commerce Department released today showed that U.S. economy expanded 3.1 percent in 2023, shaking off inflation fears and making the U.S. the fastest growing advanced economy in the world in 2023. (Photo by Mario Tama/Getty Images)
RealPage was also excited about the news, which probably isn’t a good sign. Of course, they didn’t have to pay any fines, nor admit wrongdoing.
“The settlement also provides greater certainty for housing providers and technology innovators that revenue management software can be operated confidently and in compliance with the views of federal antitrust enforcers,” RealPage said in a statement.
“The settlement reflects RealPage’s long-standing commitment to compliance and responsible innovation, ensuring our products continue to benefit both property owners and their residents.”
The notion that RealPage benefits renters is, on its face, absurd. And again, there is already evidence to suggest that the settlement was a farce. Tellingly, the other states that were co-plaintiffs in the original lawsuit did not sign on to the proposed settlement.
Even RealPage’s lawyer, Stephen Weissman of Gibson Dunn, said that the DOJ had come to “bless the legality of RealPage’s prior and planned product changes.” It’s a shocking characterization, and strikingly different from Slater’s perspective on the settlement.
And, perhaps emboldened by the decision, RealPage is now suing the state of New York for its recently signed law that cracks down on algorithmic rent pricing. In the lawsuit, RealPage actually cites its pending settlement with the Trump DOJ to bolster its case.
“Especially because RealPage offers [revenue management software (RMS)] that does not reference any competitor’s non-public information when a customer is using the software, there is no plausible basis to conclude that RealPage’s RMS can be used to facilitate any form of collusion among RealPage customers,” the lawsuit states on the third page. “In fact, this version of the software is specifically permitted by the U.S. Department of Justice under its proposed antitrust consent decree with RealPage.”
WASHINGTON, DC – AUGUST 23: U.S. Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division speaks during a press conference at the U.S. Department of Justice on August 23, 2024 in Washington, DC. Officials with the Department of Justice held the news conference to make an announcement pertaining to their antitrust lawsuit against the real estate software company RealPage. (Photo by Anna Moneymaker/Getty Images)
However, several observers have already sounded the alarm. Sure, RealPage is no longer able to share private, competitively sensitive information on apartment rental rates and other lease terms to train their algorithm, but they still have vast amounts of public data.
David Dayen, the executive director of The American Prospect, broke down the possible loopholes and gray areas of the settlement in a piece published Nov. 26.
“Not having to pay a nickel or admit wrongdoing is lenient enough,” Dayen wrote. “But there are several loopholes even in the restrictions. RealPage can continue using past data to train AI models, which will inform future price recommendations. Public data can be aggregated and used for this purpose. And RealPage can continue using an ‘auto-accept’ feature for price recommendations, as long as clients can reconfigure it to opt out. We know from most of digital age history that opt-outs don’t work well.”
RealPage also gets to keep the data it gathered via illegal means and use it to keep building and training its AI models. Additionally, the settlement requires a settlement monitor to make sure RealPage follows through on its end of the bargain; however, the monitor must only serve for three years, a convenient timeline that coincides with the end of Trump’s term.
This is yet another example of the supposedly ‘populist’ Trump administration bending over backward for corporate America. Rather than fighting powerful interest groups, like Big Tech, private equity, and the landlord cartels, that prey on normal Americans every day, Trump 2.0 has warmly embraced The Swamp. It’s a sleazy betrayal that will not go unnoticed.
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