Kristoffer Tripplaar/Sipa USA via AP Images
Debates over housing in the United States often play out as overheated ideological squabbles, with actual housing policy far in the background. One side professes genuine concern over displacement and gentrification, which some YIMBY (Yes In My Back Yard) groups cynically frame as misguided. On the other hand, the YIMBY instinct is correct: More housing must be built. Take a few steps back, and these debates eventually wade into questions about poverty, affordability, and tenant rights. The answers to these questions aren’t always clean. But what if there was one aspect that everyone could universally acknowledge as bad?
Meet RealPage, a private equity–owned, Texas-based real estate tech company. Currently, the company is under investigation by the Department of Justice for potentially colluding among landlords to jack up rent prices, in violation of federal antitrust laws. The Texas company appeared on regulators’ radars late last year after ProPublica reported on how the company’s YieldStar rent-setting software program promised landlords they could maximize rental revenue. The program uses an algorithm to collect all rental prices among clients in a region and set a recommended rate, which critics describe as collusion that drives rents upward.
Aside from federal investigations, the company is also facing more than 20 different lawsuits from renters in Seattle, Boston, Colorado, New York, and elsewhere, echoing the same concerns as the initial federal inquiries.
Whatever way the federal investigations or outside lawsuits are decided, there are obvious financial incentives to rig rental markets. That incentive is particularly corrosive when filtered through a software program, where a company doesn’t even need to actually own properties to profit from them. Instead, RealPage exists as an intermediary that manages revenue cycles, taking a fee as landlords increase rents. But according to a group of advocates, the more pernicious development is how RealPage has been given business media status as a mere analyst of housing prices, not a driver of them.
A letter co-authored by the Revolving Door Project, National Housing Law Project, Liberation in a Generation, and Fairness & Accuracy in Reporting takes aim at several business news organizations that have uncritically cited RealPage and its senior staff as neutral housing experts. The media outlets include CNBC, Marketplace, Business Insider, GlobeSt, and HousingWire. The housing advocates write that RealPage’s vice president Andrew Bowen and chief economist Jay Parsons “bragged about [YieldStar’s] success” in helping property managers “raise rents to double digits within a single month.”
For example, Business Insider at two points this year has cited RealPage’s chief economist Jay Parsons on where the rental market is heading. In February, he was quoted about how upticks in supply could bring rents down in key markets. In July, Parsons told Business Insider, “All of that new product is giving renters a lot more options—it’s also forcing property managers to compete with each other.” The subtext of the comments is that the housing crisis is one of too much demand and too little supply. Yet a piece of RealPage’s playbook involves keeping units empty at higher prices rather than bringing prices down and filling them with tenants, according to a lawsuit against the company over alleged price-fixing in the Miami, Orlando, Tampa, and Jacksonville rental markets.
Parsons is seen repeating similar talking points about supply and demand in abstract terms in CNBC and Yahoo Finance.
Since the lawsuits have popped up, RealPage has wound down its YieldStar program. However, the company has pivoted to touting its new artificial intelligence–driven software called Demandx, which seemingly adopts the same practices that drew scrutiny when under the YieldStar brand. Both are ways to evaluate large datasets of rental prices to help landlords maximize what they can charge. At RealPage’s flagship conference earlier this month, the business publication Dallas Innovates reported that the company touted how Demandx would help users outperform the market and “spend smarter, lease faster, and price right.”
At time of writing, RealPage did not respond to the Prospect’s request for comment.
Even before the lawsuits, the letter notes how in 2018, RealPage was charged a $3 million fine by the Federal Trade Commission for violating the Fair Credit Reporting Act. The FTC’s 2018 announcement described RealPage “failing to take reasonable steps to ensure the accuracy of tenant screening information provided to its clients.” That translated to prospective tenants being falsely accused of having criminal records because of glitches in RealPage’s background-screening software.
The housing issues that media outlets consider RealPage as qualified experts to weigh in on include “rent prices, rent inflation, the current decline in rent market growth, housing construction, issues around multifamily housing construction, and rent control.” The Revolving Door Project and the others are taking the stance that RealPage’s practices and its ongoing investigation by the Justice Department should be acknowledged when the company’s representatives weigh in on housing issues across the media.
Media outlets are free to publish what they wish, and use anyone they see fit to provide expert analysis. But still, it’s strange how neutral input from RealPage is so consistently sought, despite the company’s role in the very housing issues it comments on. “Citing RealPage,” as the housing advocates put it, “without disclosing that the company is under federal investigation ignores its numerous transgressions against tenants.”
