NASHVILLE, Tenn. (WKRN) — A class-action lawsuit naming some of the biggest property management companies in Nashville puts some of the blame on rising rent prices on an algorithm.
The complaint alleges RealPage, a software company used by apartment building owners to help set rent prices, uses “cartel coordination” and is a “residential monopolist”.
“The cartel among RealPage and participating Lessors provides the participants mutual assurances that they will not undercut the cartel prices, agreeing among themselves not to
compete on price for the sale of multifamily residential real estate leases,” writes the plaintiffs’ lawyers in the class-action complaint.
Joel Sanders with Apartment Insiders spends hours a day looking for deals for people moving to and within Nashville. He said he feels renters pain when it comes to the rising prices in Middle Tennessee, but that prices were less consistent before RealPage was widely used.
“Prior to software being used, there was a lot of emotion and rental rate pricing,” Sanders said. “So I think really what this software does is it helps apartment communities get to that supply and demand market-based rental rate a lot faster and a lot more efficiently than they would with less technology essentially. It’s just a tool.”
However, the lawsuit claims RealPage is doing more than just weighing market forces and giving price recommendations.
The complaint claims a RealPage scientist said, “If you have idiots undervaluing, it costs the whole system.”
A RealPage spokesperson issued a statement saying, “RealPage believes the allegations are completely without merit and will vigorously defend against the lawsuits. The complaints filed are wrong on both the facts and the law. Beyond that, we do not comment on pending litigation.”