The lawsuit that could shake up the rental market

The Indicator from Planet Money

NPR

Business

4.7 • 9.5K Ratings

🗓️ 12 January 2024

⏱️ 11 minutes

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Summary

A number of lawsuits against Texas-based company RealPage are putting increased attention on how algorithms can interact with the rental market. In the lawsuit, RealPage is accused of facilitating a cartel between major property managers that results in higher prices for renters and increased profits for landlords who use RealPage's software. RealPage, however, denies any wrongdoing.

Today on the show, we dive into the details of the lawsuit and explain why this case challenges typical notions of cartel behavior.

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Transcript

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0:00.0	NPR.
0:03.0	It's...
0:05.0	It is...
0:07.0	It is tough
0:08.0	...
0:12.0	It is tough to be a renter in this economy.
0:15.0	Rental prices today are up about 20% higher than they were compared to late 2019
0:21.0	just before the start of the pandemic.
0:22.8	And of course there are a lot of reasons for this.
0:25.6	Not enough available apartment units.
0:27.8	Zoning regulations that make new ones hard to build.
0:30.6	Buying a home is unaffordable.
0:33.7	But of all the things that could potentially be driving up rental prices, here's one that
0:37.8	you might not have considered.
0:40.2	Algarithms.
0:41.5	According to more than 20 lawsuits, some of the country's biggest property management companies
0:46.1	are accused of colluding to raise rental prices.
0:49.3	And not by cutting deals with each other, but by using a particular piece of software.
0:54.0	Brian Schwab is the attorney general in Washington DC and his office is one of the
0:58.8	latest to make this argument. If a group of landlords got together in a smoke-filled room and decided to talk amongst themselves
1:06.1	about who's going to set what rents, nobody would have any struggle in their minds seeing
1:11.0	that as a anti-competitive violation of antitrust statutes.
	...

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