Hi Reader,
Who is behind rising rents in America?
That’s the question ProPublica reporter Heather Vogell decided to answer a few years ago, when she started investigating the country’s soaring rents. She found that rents were often being set not by landlords working alone, but by an algorithm that appeared to be coordinating prices across thousands of apartments all over the country.
In this story, she exposed how private equity firms buy apartment buildings en masse and squeeze them for profit. One of the key players was Greystar, a private-equity-backed company that, over the past decade, has snapped up rentals by the thousands. Now it’s the largest landlord in America — managing nearly 950,000 apartments nationwide.
Then, in this story, Vogell showed how Greystar and other property managers and landlords all over the country were using rent-setting algorithms from RealPage, a Texas-based software maker. This software helped landlords raise the rent in a way that legal experts said could result in cartel-like behavior, such as price-fixing.
Once this series of investigations published, impact followed quickly: Senators introduced legislation seeking to ban “price-fixing” linked to rent-setting software, tenants filed dozens of federal lawsuits, and cities around the country, including San Francisco, Philadelphia and Minneapolis, moved to bar landlords from using similar algorithms to set rents that they say are anticompetitive. The Justice Department filed an antitrust complaint against RealPage and sued six of the nation’s landlords, including Greystar, accusing them of improperly working together to raise rents. In the complaint, prosecutors said one landlord told RealPage that it started increasing rents within a week of adopting the software and, within 11 months, had raised them more than 25%.
Just last week, the Department of Justice announced that Greystar has agreed to stop using “anticompetitive” algorithmic rent-setting software. The agreement is part of a proposed settlement with the Justice Department to resolve claims by federal authorities that the company had colluded with other landlords to raise rents in cities across the country.
The deal still must be approved by a judge. Greystar did not admit wrongdoing as part of the settlement and said in a statement that it “firmly believes that its use of RealPage’s revenue management software complies with all applicable laws.” RealPage declined to comment. In January, a RealPage executive called the federal case “flawed” and said the company had already changed its software to remove nonpublic data even though it believed the technology was legal and “pro-competitive.”
Reader support makes it possible for us to take on powerful forces — and have a real impact.
With your support, we can take on the biggest players — and stay on the story until there’s change. Investigations like this aren’t quick hits; they require months, sometimes years, of digging, verifying and holding the powerful to account. Last week’s news is proof that persistence can work. And it’s your gift today that makes that persistence possible.
A gift of any amount helps ensure that we can continue to pursue ambitious investigations, follow them wherever they lead and keep going until the job is done. Stand with us.
Thanks again,
Megan Martenyi
Proud ProPublican
