Legal director Sandeep Vaheesan and chief economist Brian Callaci advocate for rent control in Atlanta as a vital solution to combat housing affordability issues and economic inequality.

Inflation brought Donald Trump back to the White House, or at least aided his reelection chances. In the United States, consumer price inflation was, in part, rent inflation. Smart rent control laws could have kept growth in housing costs in check and curbed overall inflation.

Corporate power is an important contributor to exploding rents. In Atlanta and many other cities across the country, software firm RealPage operates as a cartel manager for property managers and owners. Landlords agree to share unit data — such as historical rents, maintenance costs, area and number of bedrooms — with the company. Using this information, RealPage produces rent recommendations for each client’s apartments, which favor higher rents over maximum occupancy. A landlord that previously aimed for 99% occupancy can make more money through higher rents and occupancy of 95% — provided a critical mass of rivals increase rents in tandem with each other. Collusion that used to be done in smoke-filled rooms is now done by rivals using a common algorithm.

RealPage allegedly enforces its recommendations. First, it makes overrides of recommended rents difficult. Property managers must seek approval of their supervisor and offer a written justification to RealPage. Second, RealPage threatens to cut off landlords who reject more than a small fraction of proposed rents. Third, RealPage employees conduct “secret shops” to ensure property managers are offering units at the recommended rents to prospective tenants. 

The cartel’s effects on rents are significant, according to a national class action lawsuit filed by tenants. The use of RealPage by landlords coincided with an especially significant runup of rents in Atlanta. Rents in the city rose by 80% between 2016, when RealPage was widely adopted by landlords, and 2023. The overall consumer price index in the metropolitan area increased by only 37% during the same time.

RealPage is now in serious legal trouble. In August, the Department of Justice, joined by eight states, filed a civil antitrust complaint against the company. Earlier, the attorneys general of Washington, D.C., and Arizona filed their own lawsuits. These suits are necessary and worthwhile, both to hold RealPage accountable and to remind corporations that collusion, if proved, will not be tolerated.

Read full article here.