State Attorney General Kris Mayes filed suit Wednesday against the software company RealPage and 9 major apartment landlords with properties in Tucson and Phoenix. Mayes alleges that the landlords and RealPage conspired to create a "rental monopoly" as rents rose 30% over the last two years.
RealPage collects information on thousands of apartment complexes across the country, including more than two hundred around Tucson. The company posts information about average rents on a public website.
Mayes says the company gives clients real-time data on each new lease, and that allegedly enables them to fix prices illegally, using its proprietary "revenue management" algorithm.
The lawsuit states:
RealPage feeds this data into a common algorithm that sets prices for each lease transaction for every participant. The software that performs this function is called revenue management software, or RM Software. In RealPage’s own words, RM Software allows landlords to “outsource daily pricing and ongoing revenue oversight” to RealPage.14 RealPage’s purpose is to “set rents” for its clients—competitors in the multifamily apartment rental market.15 In so doing, RealPage has said it acts “as though we own” these competitor properties.16 RealPage aims to push prices beyond competitive levels; in its words, RealPage aims to “achieve[] revenue lift between 3% to 7%” even in economic downturns.17 It calls this process “Revenue Management” or “RM.” The State and antitrust scholars call it price fixing.
RealPage's site includes summaries of the Tucson and Phoenix rental markets.
