Washington State Considers Ban on Rent Pricing Software Amid Federal Lawsuit

Washington state lawmakers are moving forward with legislation that could ban the use of software to coordinate and set rent prices. The proposed measure comes after the federal government filed a lawsuit against RealPage, a software company accused of conspiring with landlords to inflate rent costs.

According to Axios, the legislation focuses on services like RealPage, which is under scrutiny by the Department of Justice (DOJ) and multiple states for allegedly helping landlords manipulate rental prices. The antitrust lawsuit claims that RealPage collects sensitive, nonpublic data from landlords, allowing competitors to use that information to maximize their profits at the expense of renters.

The potential impact of the bill is significant. Axios reports that an estimated 800,000 leases in Washington state were priced using RealPage’s revenue management software between 2017 and 2024. A 2022 investigation by ProPublica found that a large portion of the apartment market in Seattle’s Belltown neighborhood was controlled by a few major firms that all utilized RealPage.

The legislation, Senate Bill 5469, seeks to ban the use of software that collects and analyzes data from multiple landlords and uses that information to recommend rental prices or lease terms to two or more landlords. The bill passed the Washington state Senate earlier this month with a 29-19 vote and is now under consideration in the state House.

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State Sen. Jesse Salomon, a Democrat from Shoreline and the lead sponsor of the bill, emphasized that the goal is to prevent “market collusion” and ensure that rental housing remains competitive and fair for tenants. “We know that rental housing needs to remain competitive and fair for renters,” Salomon stated during a public hearing in January, as per Axios.

However, not all parties are in favor of the bill. Mike Semko, vice president and associate general counsel for RealPage, argued that the proposed legislation overreaches and would essentially “ban math.” He claimed that passing the bill would send a negative signal to housing providers, potentially damaging the state’s rental market. “We do not set rents—our customers set the rents,” Semko added, noting that RealPage’s clients are free to disregard the software’s pricing recommendations.

The controversy surrounding RealPage’s software extends beyond Washington. An analysis by the White House Council of Economic Advisers last year found that the use of such pricing tools cost U.S. renters an additional $3.8 billion in 2023 alone.

While Washington initially joined the federal lawsuit against RealPage, the state dropped its involvement last month. A spokesperson for the Washington State Attorney General’s office told Axios that the state could revisit the lawsuit if it is deemed necessary for protecting residents. The office has not yet taken an official stance on the proposed legislation.

The bill is progressing through the legislative process. After passing out of a state House committee, it now faces a vote on the House floor. The legislative session is set to end on April 27, so lawmakers have a limited time to act.

Source: Axios