PESP applauds Department of Justice action against private equity-owned RealPage

Today, the Department of Justice and eight states including California and North Carolina filed a lawsuit against RealPage, the controversial private equity-owned real estate software company. The lawsuit accuses RealPage of enabling collusion among landlords to engage in price fixing and raise rents for millions of Americans using the company’s YieldStar software. Below is the statement of K Agbebiyi, Senior Campaign Coordinator at the Private Equity Stakeholder Project.

“We’re pleased to see the Department of Justice take action to protect the millions of renters who have been impacted by RealPage’s alleged collusion to hike rents. The American housing market is in crisis. As working class people contend with rising costs of living, RealPage’s software programs are dramatically changing the housing market and ensuring that tenants will be forced to pay inflated rates to secure housing. Americans’ access to affordable housing should not be beholden to the interests of private equity-owned corporations such as RealPage, which prioritizes profit for landlords over tenants.

“RealPage’s connections to private equity go beyond its owner, Thoma Bravo, a Chicago-based private equity firm that currently maintains over $130 billion in assets. Recent research from PESP suggests that private equity giant Blackstone, the largest landlord in the country, is using YieldStar to set rents for the thousands of properties that they own. Blackstone already owns almost 350,000 units of rental housing in the U.S. and many more around the world.

“In general, we should be wary of private equity actors in the housing market. For example, because of their financial strength and ability to pay in cash, private equity investors can often out-compete first-time homebuyers, making it harder for families to buy homes in neighborhoods where these investors are active. In addition to crowding first-time homebuyers out of the market, private equity landlords pose threats to renters. Since they can gain market power in geographic areas with few other options for renters, private equity firms can charge high costs and offer minimal repair and upkeep.

“From aggressive evictions and piled-on junk fees to neglected maintenance and artificially inflated rents, tenants have been paying far too high a price for private equity’s thirst for profits. We implore policymakers and regulators to follow the lead of the DOJ and stand up for Americans against corporate profiteering of the basic need for housing.”