In the United States, a tech company named RealPage is quietly changing the rules of the rental market. Through its advanced algorithm pricing software, the company is being accused of manipulating rental prices nationwide, drawing widespread attention from regulators and consumers.
California is becoming the frontline in the fight against this trend. Cities like San Diego and San Francisco have already begun to take action, proposing bans on the use of such algorithmic pricing software. Federal prosecutors have even filed antitrust lawsuits, accusing RealPage of helping landlords artificially inflate rents by collecting and analyzing non-public rental data.
Image Source Note: Image generated by AI, image licensed from Midjourney
RealPage's operating model is quite complex. The company requires landlords to provide their private rental data, including rent prices and new lease information. Subsequently, the company aggregates and analyzes this data to provide pricing recommendations to landlords. According to investigations, the company controls 80% of the market share for commercial rent management software.
For tenants, the impact is very real. Take, for example, a couple expecting a newborn; they have had to give up their gym membership and cut back on car expenses just to maintain their living situation in San Diego. Data shows that between 2020 and 2024, the average rent in San Diego rose by 21%, significantly higher than the national average.
Even more concerning is that California's public pension funds have indirectly invested in RealPage. This means that these funds, which serve retirees, are supporting a tech company that may harm the interests of the general public.
The California Department of Justice has clearly stated that this algorithmic pricing is effectively artificially inflating rents, severely harming low-income groups. Notably, 44% of households in California are renters, far exceeding the national average of 35%.
RealPage denies these allegations. A company spokesperson emphasized that rent increases are primarily due to insufficient housing supply and that their technology is actually beneficial to the market. However, prosecutors argue that even though landlords could theoretically refuse algorithmic recommendations, doing so in practice is extremely difficult.
This controversy over rental algorithms reflects the complex interplay between technology, real estate, and social equity. For ordinary working families like the Pickens, rising rents have become a heavy burden for survival.
As more cities and states begin to pay attention and take action, RealPage's algorithmic pricing model is facing unprecedented challenges. This is not just a technical issue; it is a social issue concerning the basic survival rights of countless households.