the FBI this week conducted a dawn raid of corporate landlord giant Cortland Management over what’s called algorithmic price-fixing. This corporate real estate management firm, based in Atlanta, rents out 85,000 units across thirteen states. But Cortland is allegedly part of a much bigger conspiracy orchestrated by a software and consulting firm named RealPage to increase rents nationwide by coordinating landlord pricing decisions and holding apartments off the market. How much bigger? Well, there’s a civil antitrust action in Tennessee that’s been going on since 2023, where the argument is that RealPage has been working with at least 21 large landlords and institutional investors, encompassing 70% of multi-family apartment buildings and 16 million units nationwide, to systematically push up rents.
How does the cartel allegedly work? Well large corporate landlords, who would normally compete with one another for tenants via price or quality, have since 2016 stopped doing so. Instead, they all share “detailed real-time data regarding pricing, inventory, occupancy rates, and unit types that are or will be coming available to rent” every day with one another through RealPage’s revenue management system, which in turn sends back recommendations on pricing.
Landlords adopt RealPage recommendations on pricing 80-90% of the time, which explicitly drives up revenue by holding apartments off the market. As the architect of RealPage once explained, “[i]f you have idiots undervaluing, it costs the whole system.” It’s not just an information-sharing and price recommendation engine. RealPage has ‘pricing advisors’ that monitor landlords and encourage them to accept suggested pricing, it works to get employees at landlord companies fired who try to move rents lower, and it even threatens to drop clients who don’t accept its high price recommendations. This one’s a very clear conspiracy. Allegedly.