Pricing software raises Houston-area rent, report finds
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A Houston home for rent. Photo: Brandon Bell/Getty Images
Houston-area renters spent $83 more a month in 2023 if their apartment landlords used software developed by Texas-based RealPage, according to a new analysis from the White House Council of Economic Advisers first shared with Axios.
Why it matters: U.S. renters spent an extra $3.8 billion last year because of pricing algorithms used by landlords, the analysis found.
- RealPage controls 80% of the market for rent-setting software. The Department of Justice has filed an antitrust suit against the company, alleging its pricing algorithm allows landlords to collectively push rents higher.
What they found: The researchers evaluated two scenarios: property managers using RealPage software to set prices and landlords setting prices individually.
- U.S. renters who lived in a building that used a price-setting algorithm spent an average of $70 more a month.
- Renters in metro areas where RealPage use is more common spent even more in 2023.
Zoom in: Atlanta had the highest use of the software among landlords of multifamily housing, with nearly 70% using RealPage products. Renters in those buildings spent an average of $181 more a month, per the CEA's analysis.
- The Houston metro had the seventh highest usage of the software, with about 40% of landlords using it.
What they're saying: "We are disappointed The White House CEA never contacted RealPage about their report, which is riddled with flawed assumptions," company spokeswoman Jennifer Bowcock said in a statement Wednesday.
- "Their conclusions are based on the erroneous assumption that all property managers are setting coordinated rents, but that is not how RealPage's revenue management software (RMS) works."
Reality check: In December, the company filed a motion seeking to dismiss the DOJ's claims in the antitrust suit, arguing that the agency hasn't shown any real anticompetitive effects of its product.
- The White House report notes that a long-term shortage of affordable housing is the main reason rents are increasing.
What we're watching: Whether the incoming Trump administration will pursue the suit against RealPage. The analysis looks like the White House's last push to draw attention to the issue.
Editor's note: This story has been updated to include a response from RealPage.