Watchdog urged to sniff out any collusion, deception in rent-setting algorithms
Senator Brown drew attention to another facet of the lawsuit: that RealPage allegedly helped landlords, through a feed of information, keep an optimum number of properties vacant at any one time so as to avoid oversupply and drive up demand and therefore prices. That wouldn't be very fair, the Senator said.
"For both single-family and multifamily buildings, the demand for rental homes far outpaces supply," Brown's letter read. "Rental vacancy rates were just 5.6 percent at the end of 2021, the lowest vacancy rate since 1984. Yet, even in this tight rental market, there are reports that RealPage's algorithm encourages property owners to keep homes vacant or push tenants out in order to maximize profits … Intentionally holding units vacant, when there are so few homes available, decreases a consumer's negotiating power and exacerbates the housing shortage.
Brown said nearly 35 per cent of Americans rent their homes, totaling approximately 44 million properties. He called on the FTC to investigate the impact automated rental pricing algorithms such as RealPage's YieldStar have on the market, citing concerns over collusion and whether the collection of private rental data violates antitrust laws.
"The FTC's mission to protect consumers and maintain competition in our markets has never been more critical. And this mission has become increasingly complex as technology advances change how entire industries operate … Renters should have the power to negotiate fairly priced housing, free from illicit collusion and deceptive pricing techniques," he added.
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