Source: NC Newsline
North Carolina Attorney General Josh Stein announced in late August that the state had joined an antitrust lawsuit filed by the U.S. Department of Justice accusing real estate software company RealPage of violating antitrust law and of artificially increasing rent prices for renters in North Carolina and across the nation, NC Newsline reported.
The lawsuit was filed in the U.S. District Court for the Middle District of North Carolina with attorneys general in California, Connecticut, Colorado, Minnesota, Oregon, Tennessee and Washington also joining the suit.
“Few things are as important as our homes — but too many North Carolinians struggle to afford their apartment,” Stein said at a press conference announcing the lawsuit. “Rents are already too high. I will not tolerate any company scheming to block healthy competition among landlords. It raises rents and it’s illegal.”
According to N.C. Housing Coalition data cited by Stein, between 2018 and 2023, rents increased by 51% in Charlotte, 52% in Raleigh and 55% in the Durham-Chapel Hill area.
“Rising rents creates real financial and emotional strain,” Stein said. “Folks are worried about how to make ends meet. They’re worried that they don’t have enough money for retirement or an emergency and they’re worried that if their landlord increases their rent again, they may not be able to afford their home any longer.”
The lawsuit focuses on revenue management software that RealPage sells to landlords across the U.S. According to the Justice Department, landlords are sharing the information produced by RealPage to set rent prices higher than what they would be in a competitive market, according to NC Newsline.
According to Stein’s office, in exchange for purchasing and using RealPage’s YieldStar software, “property managers share detailed, nonpublic, competitively sensitive data” with the company, including information about units set to come on the market, the rent they are charging and discounts they are offering.
In turn, RealPage uses that nonpublic information to suggest a price that property managers should charge for their units to make more money, Stein’s office said. When landlords accept RealPage’s recommendations, prices for similar apartments then become artificially inflated resulting in renters being unable to find better deals when shopping around.
RealPage has a massive footprint throughout the U.S., including in North Carolina, Stein said.
“Three of the top 10 markets that this company operates in are Charlotte, Raleigh and Durham-Chapel Hill, so we’re in the most concentrated markets in which they operate,” Stein said.
At the press conference announcing the lawsuit, Stein was joined by Wake County Commission Chairwoman Shinica Thomas and Monica Burks, who is policy counsel at the Center for Responsible Lending.
“Anti-competitive practices inflate housing costs,” Burks said. “They make it difficult for a renter to compare rates and get a fair offer on an apartment unit and it exacerbates the crisis of simply being housed.”
Burks added that low-income renters are hit hardest by RealPage’s practices and that they can fall victim to predatory lenders.
“They [predatory lenders] know that at the end of each month that there is a shortfall between what they [low-income renters] are bringing home and the expenses that they need to cover and they fill this gap with unconscionable loans that are not sustainable.”
According to Thomas, the median rent rose 40% in Wake County between 2010 and 2020.
“That cost families an extra $4,200 a year,” Thomas said. “For a household that’s struggling to make ends meet, that can be the difference between stability and eviction.”
