ProPublica Exposes RealPage's Rent-Fixing Algorithm

ProPublica published an investigation on Oct. 15, 2022 titled 'Rent Going Up? One Company's Algorithm Could Be Why' exposing how 🤠Texas-based RealPage's YieldStar software enables landlords to coordinate rent prices through algorithmic collusion. Reporters HVHeather Vogell and HCHaru Coryne documented how RealPage's algorithm analyzes private, competitively sensitive data from competing landlords—including what nearby competitors charge—to recommend rent prices. The investigation revealed that RealPage holds lease transaction data for more than 13 million rental units across the United States, representing approximately 8% of all rental housing nationwide.

Former RealPage employees told ProPublica that landlords adopt as many as 90% of the software's rent recommendations, effectively removing independent pricing decisions from the rental market. One of YieldStar's developers told ProPublica that the algorithm was designed because leasing agents 'had too much empathy' for renters compared to computer-generated pricing. RealPage discourages negotiation with tenants and has recommended landlords accept lower occupancy rates to raise rents and maximize revenue, prioritizing algorithmic pricing over human judgment about affordability.

In Seattle's Belltown neighborhood, ProPublica found 70% of approximately 9,000 apartments in one downtown ZIP code were controlled by just 10 property managers—every single one used RealPage's pricing software in at least some buildings. At the Fountain Court apartments (320 units near Amazon headquarters, owned by Essex Property Trust), rent rose 42% between 2012 and 2022, steeper than the 33% average increase for similar downtown buildings. In one RealPage-priced Seattle building, a couple's one-bedroom rent increased 33% in a single year, while a non-algorithm-priced studio in the same ZIP code saw only a 3.9% increase over a similar period.

RealPage's business model requires competing landlords to share nonpublic, competitively sensitive pricing data with the company. The algorithm then uses this shared data to generate pricing recommendations that are adopted by 90% of participating landlords, effectively coordinating rent increases across competing properties. Legal and antitrust experts told ProPublica this structure raises serious questions about whether RealPage created a new type of cartel allowing the nation's largest landlords to indirectly coordinate pricing in violation of federal antitrust law.

RealPage promoted YieldStar as helping landlords 'outperform the market 3% to 7%' by removing human decision-making from rent pricing. The company organized private work groups where competing landlords meet to discuss pricing strategies while using the same algorithm fed by their shared data. A former federal prosecutor told ProPublica these work groups could constitute a 'red flag' indicating potential illegal collusion, as competitors normally can't share pricing information or coordinate rental rates without violating the Sherman Antitrust Act.

ProPublica's investigation documented how RealPage's algorithm systematically pushed rents higher in markets with high software adoption. In Seattle neighborhoods including Capitol Hill, Central District, South Lake Union, and Queen Anne, widespread RealPage use correlated with steeper rent increases compared to buildings not using algorithmic pricing. The investigation showed the software creates a pricing floor by recommending landlords reject lower offers and hold units vacant rather than accept market rates below the algorithm's suggestions.

Within weeks of ProPublica's Oct. 2022 publication, tenants filed at least seven federal class action lawsuits alleging RealPage and major landlords violated antitrust law through algorithmic price-fixing. The Department of Justice opened an antitrust investigation in Nov. 2022. Senators EWElizabeth Warren, BSBernie Sanders, Tina Smith, and Ed Markey sent letters to RealPage CEO DJDana Jones demanding answers about whether YieldStar created a landlord cartel exacerbating housing inflation. The investigation sparked nationwide scrutiny of algorithmic pricing in rental housing markets.

The ProPublica investigation revealed RealPage marketed its software as replacing human empathy with data-driven profit maximization. Internal documents and former employee statements showed the company explicitly designed the algorithm to override leasing agents who might negotiate with struggling renters or accept lower rents based on local knowledge. This transformation of rental housing from relationship-based negotiation to algorithmic price coordination represents a fundamental shift in how Americans access housing, with corporate algorithms making affordability decisions previously made by individual property managers.