RealPage Sues Berkeley Over Rent-Hiking Algorithm Ban

RealPage's Alleged Collusion and Lawsuit

• 🏢 Investigators are examining a 76% rise in apartment rents in the Phoenix area since 2016, noting that some buildings with similar amenities but different landlords had 12% higher rents, allegedly set by RealPage's algorithm.
• ⚖️ Berkeley, California, banned RealPage's service, which allegedly facilitates landlords colluding to raise rents. In response, RealPage sued Berkeley, claiming a violation of First Amendment rights.
• 🤝 RealPage employees have admitted to anti-competitive practices, with the company's system requiring landlords to adhere to set rent prices, justifying deviations, and facing potential expulsion from the scheme.
• 📈 RealPage allegedly deleted videos of landlords discussing rent hikes after a Washington Post story and bragged in investor calls about recommending higher lease rates and helping landlords "outpace the market."
• 📖 An ebook from RealPage stated the company allows corporate landlords, who are competitors, to "work together to make us all more successful in our pricing," and a Justice Department lawsuit acknowledged the software aims to maximize prices and avoid "the race to the bottom."

Arguments Against RealPage and Housing Affordability

• 🗣️ RealPage argues Berkeley's ban is an unconstitutional restriction on lawful speech, violating the First Amendment by prohibiting content-based recommendations on rents or occupancy.
• 🧐 RealPage's attorney claims recommendations are based solely on individual property data and publicly available information, but this overlooks the punishment for landlords who might lower rents to compete.
• 🏠 While acknowledging the ban is a step against problematic services, the discussion emphasizes that the primary driver of rising rents is the severe housing shortage, particularly in California, due to insufficient construction.
• 🏗️ The difficulty in building more housing in California is attributed to environmental laws, often used by "not in my backyard" advocates, to the detriment of those needing affordable housing.
• 🚫 The service is described as "gaming the system" to the detriment of Americans needing housing, and setting a tone that such practices are unacceptable, even if it doesn't solve the core housing affordability problem.

Discussion on Capitalism and Competition

• 📉 The core function of capitalism is often cited as competition, which ideally drives down prices for consumers.
• 🤝 Services like RealPage enable landlords to collude, mitigating competition and keeping prices artificially high.
• 💡 The argument is made that a service solely focused on telling landlords to "charge more" is counterintuitive to free-market principles and potentially illegal.
• 📊 While a service tracking granular demand changes might be acceptable, RealPage's approach of simply recommending higher prices is seen as problematic.