company . The company ’ s software recommends a price for each unit , it says , giving landlords “ the courage to charge an inflated price by the implicit assurance that all of their competitors were doing the same .”
ProPublica reported previously that RealPage said its software helped its clients outperform the market by 3 to 7 %.
The lawsuit said the collusion among property managers using the software eliminated the need for discounts or lower rent prices even at the start of the school year — traditionally a time when competition for student renters is the fiercest .
“ Even if some beds remained empty , the monopoly rents RealPage helped extract from the rented units justified the unrented units ,” the lawsuit says .
Once RealPage was widely adopted by student housing purveyors , the lawsuit says , landlords shifted “ from the previous competitive ‘ market share over price ’ strategy to a new collusive ‘ price over volume ’ strategy .”
Pushing price over volume “ is characteristic of a cartelized market ,” the lawsuit says .
The new strategy increased prices regardless of market conditions and asked landlords to tolerate some unrented units , the lawsuit says — an approach that would fail in a competitive market .
“ In the market RealPage and Lessors created , each Lessor had mutual assurances that other Lessors would also keep prices high , leaving students with no choice but to pay what Lessors demanded ,” the lawsuit says .
One study of 2017 – 2018 data by RealPage and defendant Campus Advantage found one 576-bed complex outperformed its market by 14.1 %, despite a “ negative ” occupancy change year over year , the lawsuit says . It adds : “ RealPage advised property owners and potential clients , ‘ If you want to outperform the market term after term , focus less on occupancy and more on strategic lease pricing .’”
In a statement emailed to ProPublica , Campus Advantage said it “ strongly disagrees with the unsubstantiated allegations in the lawsuit and intends to vigorously defend against the claims . Campus Advantage is proud of its track record creating successful communities .”
The lawsuit says the defendants had an opportunity to conspire through RealPage ’ s User Group Forum , which is composed of clients who want to work together to help the company improve its products , as well as at other RealPage functions and industry trade association gatherings .
RealPage advisors would also be in regular contact with landlords “ to keep them up to date on their competitors ,” the lawsuit alleges .
RealPage ’ s actions were not widely known , the lawsuit says . “ Only after the recent publication in October 2022 of an article in ProPublica was there a comprehensive presentation of the full scope of the confidential services that RealPage provides to its clients in the real estate industry ,” it says .
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This article was originally published by ProPublica and is reprinted according to their guidelines .
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