RealPage has been hit with a second federal class motion lawsuit that accuses the proptech agency and a bevy of pupil housing operators of conspiring to “artificially inflate” the value of pupil housing within the US.
Gabriel Navarro, a College of Washington pupil, filed the lawsuit this month within the US District Courtroom for the Western District of Washington in Seattle.
As in a category motion antitrust go well with filed in California in October by a gaggle of renters, the Washington lawsuit accuses RealPage and several other distinguished rental property operators of illegally sharing aggressive information on rents by RealPage’s YieldStar income administration platform and of colluding to boost rents.
“RealPage supplied pricing data for pupil housing suppliers that allowed them to intently analyze their pricing compared to their rivals at a bedroom-by-bedroom stage,” Navarro’s lawsuit mentioned.
The lawsuit particularly alleges collusion on pupil housing rents in Seattle, Ann Arbor, MI and Gainesville, FL.
As within the California class motion lawsuit, Navarro’s go well with names 9 distinguished housing operators as defendants, on this case managers of pupil housing portfolios together with the corporate that’s the landlord of the residence campus the place Navarro lives and an NYC-based brokerage.
Nonetheless, the lawsuit doesn’t present proof that the operators did something greater than settle for pricing suggestions from YieldStar as Yieldstar shoppers; it does allege that RealPage’s platform is illegally sharing aggressive rental information with its shoppers.
RealPage issued a terse assertion declaring that it “strongly denies” the allegations within the Washington lawsuit and can vigorously defend in opposition to the lawsuit. “Past that, we don’t touch upon pending litigation,” the corporate mentioned.
Final month, after the primary class motion lawsuit in opposition to RealPage was filed in California, the corporate supplied GlobeSt. with an announcement particularly denying the allegation that the agency is illegally offering aggressive rental information by its YieldStar platform.
“RealPage’s income administration software program is purposely constructed to be legally compliant,” the corporate’s assertion mentioned. “It focuses on the interior provide and demand dynamics at a specific property and doesn’t take into account or have any visibility into availability (provide) at competing properties.”
Based on the Texas-based proptech agency’s web site, the YieldStar software program combines lease transaction information from greater than 13.5M items and makes use of AI-driven algorithms to “unlock lots of of foundation factors of hidden yield by worth optimization.”
The corporate claims its algorithms allow new customers to realize “as much as 400% in year-one ROI” for house owners, operators and buyers.
The California anti-trust class motion lawsuit was based mostly on an investigation of RealPage printed by the non-profit ProPublica.
ProPublica’s article quotes RealPage execs boasting at a CRE convention final 12 months that the corporate’s information analytic device, used to counsel each day costs for open residence items, has been driving double-digit hire will increase throughout the nation.
ProPublica mentioned RealPage’s 2017 acquisition of The Rainmaker Group’s Lease Lease Possibility enterprise had successfully given the Texas agency a monopoly on predictive analytics used to set hire costs, increasing RealPage’s shopper base to 31,700 clients.
In a single neighborhood in Seattle, ProPublica discovered that 70% of residences had been operated by 10 property managers, all of which used RealPage’s pricing software program. Property managers can reject pricing advisable by the software program, however not often do, ProPublica reported.
Based on the non-profit, RealPage discourages bargaining with renters as a result of leasing brokers have “an excessive amount of empathy” in comparison with computer-generated pricing. ProPublica mentioned RealPage has inspired landlords to simply accept decrease occupancy charges with a view to elevate rents.
