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Senator Wants Antitrust Probe Of Apartment Price-Setting Software

 |  November 1, 2022

The chair of a US Senate committee asked the Federal Trade Commission on Tuesday to review whether a Texas-based property tech company’s rent-setting software violates antitrust laws.

The move comes after ProPublica published an investigation Oct. 15 into RealPage’s pricing software, which suggests new rents daily to landlords for all available units in a building. Critics say the software may be helping big landlords operate as a cartel to push rents above competitive levels in some markets.

“Alarmingly, recent reporting by ProPublica highlighted that RealPage’s algorithm-based price optimization software, YieldStar, is being used by a growing number of property managers and landlords, potentially impacting pricing and the supply of homes in the rental market,” said the letter signed by U.S. Sen. Sherrod Brown, the Ohio Democrat who chairs the Senate Committee on Banking, Housing, and Urban Affairs. “Renters should have the power to negotiate fairly priced housing, free from illicit collusion and deceptive pricing techniques.”

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RealPage’s software applies a complex set of mathematical rules to a vast trove of data collected by the company from landlords who are its clients. That data includes the otherwise private data of nearby competitors.

“Troublingly, ProPublica reported that a former RealPage executive stated that the data could give insight into how competitors within a half-mile or mile radius are pricing their units,” said the letter, which was addressed to FTC chair Lina Khan.

RealPage has said the data fed into its pricing tool is anonymized and aggregated. It said the company “uses aggregated market data from a variety of sources in a legally compliant manner.”

In a statement Tuesday, the company said it had not seen the letter, “but we are always willing to engage with policy stakeholders to ensure they have the facts about the competitive dynamics of the housing market and the value and benefits that RealPage creates for renters and housing providers.”