CALIFORNIA – RealPage announced April 2, that it filed a lawsuit against the City of Berkeley – one of four cities to ban its algorithmic rental price-setting software.
The lawsuit alleges that the ordinance bans their ‘lawful speech and was prompted by an intentional campaign of misinformation and often-repeated false claims about the company’s revenue management software.’
Berkeley said the use of these algorithmic devices is widespread in markets throughout the country and has helped fuel the national housing affordability crisis.
“Local jurisdictions can eliminate this specific contributor to the on-going affordable housing crisis by adopting local ordinances to ban the use and sale of algorithmic devices to set rents and/or manage occupancy levels,” said the city.
RealPage wants a court to block the city’s ordinance that bans using data and calculations to help landlords set rental prices.
RealPage says the real issue is lack of housing supply
According to RealPage, its revenue management software contributes to a healthier and more efficient rental housing ecosystem that benefits both renters and housing providers.
The company says its software suggests rent prices that can go up, down, or stay the same, based on the goals of the property owners using it.
In addition, RealPage said landlords decide their own rent prices and have 100% discretion to accept or reject software price recommendations.
RealPage CEO and president Dana Jones said rather than pursue misguided ordinances, they encourage California’s public leaders to focus on the real issue – the lack of housing supply.
“In short, to make housing more affordable, our local leaders should reduce the disincentives to new single and multifamily construction through reform of the city’s rent control, its overly restrictive tenant-rights policies and its glacial permitting process,” said California Policy Center president Will Swaim.
‘Tool ensures landlords are increasing price’
In addition to Berkeley, San Francisco, Philadelphia and Minneapolis have also banned algorithmic rental price-setting software.
In August 2024, the U.S. Department of Justice (DOJ) sued RealPage, claiming its software helps landlords work together to raise rents by illegally sharing pricing and supply information to boost their profits.
According to the DOJ, RealPage said ‘their tool ensures that [landlords] are driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.’
California attorney general Rob Bonta said RealPage’s pricing alignment schemes especially affected multifamily buildings in Southern California including in Orange County, Anaheim, Santa Ana, Irvine, Riverside, San Bernardino, Ontario, Rancho Cucamonga, Temecula, Murrieta, San Diego, and Carlsbad.
Berkeley’s ban on using RealPage will start on April 24, 2025, unless a court blocks it.
