Housing and rental prices are among the top issues in this fall’s presidential campaign between Democrat Vice President Kamala Harris and former President Donald Trump.
The Biden-Harris administration now alleges that landlords are coordinating with a software company to keep rents artificially high. In a civil antitrust lawsuit filed by the U.S. Department of Justice, federal officials claim that RealPage, a software company used by the apartment industry to gather data on rent prices and other information, uses an algorithm that creates an anti-competitive environment by artificially creating higher rent prices.
Critics argue, however, that it’s not “price gouging” making the cost of homes and rent higher, it’s excessive federal government spending by the Biden-Harris administration, excessive federal and state regulations, and local restrictive zoning laws that are causing the problem.
“This is another campaign season antitrust lawsuit aiming to divert attention from the inflation that resulted from the disastrous fiscal and spending policies of the Biden-Harris Administration,” Robert Bork Jr., president of the Antitrust Education Project, said.
Overall, prices are up about 22% since Biden-Harris took office, which many economists blame on excessive federal spending.
The attorneys general of Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, and Washington joined in the DOJ in its lawsuit, which claims that landlords “agree to share with RealPage nonpublic, competitively sensitive information about their apartment rental rates and other lease terms” to generate “recommendations” for rent prices, which the department alleges undermines “competition and fairness for consumers in the process.”
RealPage counters that its revenue management software, which is at the center of the government’s complaint, is designed to maximize revenue rather than rental prices. It notes that its software often recommends lower rents to maximize occupancy rates, allowing landlords to keep apartments and other units filled.
“The fact is that fast, real-time transparency promotes healthy markets, for consumers as well as for sellers,” Bork said.
RealPage spokeswoman Jennifer Bowcock said the company would defend itself against the complaint as its software was “purposely built to be legally compliant.”
RealPage also says that its recommendations are based on internal data of each client’s individual property and their own supply and demand issues rather than data from the market as a whole. The revenue management software also doesn’t share information about competing or surrounding properties, RealPage says.
Housing affordability overall has taken a hit in recent years. Interest rates on mortgages and other loans have soared to 23-year highs because of 40-year high inflation, and a new Wall Street Journal/NORC poll shows that most young Americans say they have “been priced out of homeownership.”
On rental prices, the DOJ says anticompetitive practices are to blame, similar to Harris’ assertion that “price gouging” is in part to blame for significantly higher prices at grocery and drug stories.
On the campaign trail, Harris has proposed government-enforced price controls at grocery stores and drug stores, something critics say would backfire, leading to supply shortages and increased inflation.
Critics of the antitrust lawsuit say further restrictions on landlords would have a similar impact.
“If you really want to do something about rent, tear down the NIMBY, antidevelopment policies exemplified by San Francisco and other blue bastions,” Bork said.
