The Justice Department is expanding a probe of the rental housing market, opening a criminal investigation of a top developer of property pricing software and some of its customers, Politico reports. DOJ is looking into the possibility that RealPage is facilitating price-fixing among large residential property owners and management firms that use the company’s product. The move opens a new front in an array of investigations and lawsuits targeting the rental housing market by DOJ, state attorneys general and class-action plaintiff lawyers. It involves software companies such as RealPage and dozens of managers and owners of apartment complexes around the U.S. The White House and the Department of Housing and Urban Development have produced policy directives aimed at the industry.
The DOJ move is a marked escalation of the probe, which has been underway for at least two years, run primarily by DOJ antitrust lawyers. The Biden administration has made cracking down on anti-competitive activity a cornerstone of its domestic economic agenda, and antitrust enforcers at the DOJ and Federal Trade Commission are key to that goal. In his State of the Union address, President Biden highlighted actions in the food, health care and housing markets. High housing costs are a particular priority for the administration, with Biden calling out rental prices. The investigation is one of the only criminal probes involving so-called algorithmic price-fixing, in which an alleged conspiracy is implemented with software. In 2015, DOJ secured guilty pleas in a small e-commerce case where it said prices were fixed via algorithms. RealPage’s software, including its YieldStar product, is used by landlords to estimate supply and demand for their listings, allowing them to maximize rents.