In a groundbreaking move aimed at tackling skyrocketing housing costs, the state of New Jersey has filed a lawsuit against RealPage, a leading property management software company, along with ten of the state’s largest landlords. The lawsuit alleges that RealPage, in collaboration with these landlords, used its advanced revenue management software and sophisticated algorithms to artificially inflate rents, violating both federal and state antitrust laws, as well as New Jersey’s consumer fraud laws.
What’s Behind the Lawsuit?
The complaint, filed by New Jersey’s Attorney General Matthew Platkin, asserts that the defendants, including major players like AvalonBay Communities, conspired to manipulate rental prices across the state’s multifamily housing market. According to the state, RealPage’s software was used to adjust rents in a way that would maximize profits for landlords, irrespective of market conditions or the financial well-being of renters.
The lawsuit details how the defendants—real estate giants and property managers—quietly shared sensitive, non-public data about things like lease prices, available amenities, and housing inventory. This exchange of information, the lawsuit claims, allowed these companies to align their pricing strategies, creating an environment where competition to lower rents was effectively eliminated. As a result, the lawsuit argues, residents of New Jersey are paying far more for housing than they should be.
The Impact on Renters
One of the most concerning aspects of the case is the claim that this alleged collusion has disproportionately affected low-income renters. According to New Jersey’s complaint, the result has been a sharp increase in rental costs, with hundreds of thousands of residents seeing their housing expenses rise. The state points out that nearly half of low-income renters in New Jersey are now paying more than 30% of their gross income on rent, a figure that experts consider to be the tipping point of housing affordability.
Financial and real estate experts commonly agree that spending no more than 30% of income on housing is a key benchmark for affordability. However, with rents soaring, many renters across the state are finding themselves stretched beyond this threshold, making it increasingly difficult to cover other essential living costs like healthcare, food, and transportation.
“This lawsuit is about putting a stop to corporate greed at its worst,” said Jeremy Hollander, acting director of the Division of Consumer Affairs in New Jersey. “The housing market in New Jersey is already stacked in favor of landlords, but the defendants wanted more. They weren’t satisfied with simply reaping the benefits of a market with limited supply; they wanted to artificially inflate rents and squeeze tenants even further.”
The Allegations Against RealPage and the Landlords
RealPage’s role in this alleged scheme is central to the lawsuit. The company’s software, which is used by landlords across the country, utilizes complex algorithms to set rental rates for properties. The state argues that this technology, rather than providing an objective market-driven solution, was actively used to manipulate rent prices. By feeding data into the system that reflected inflated prices, landlords could ensure they were maximizing profits—sometimes at the expense of affordable housing options for tenants.
At the heart of the allegations is the claim that the participating landlords, including some of the largest names in the multifamily housing industry, used this software to create an almost uniform pricing structure for apartments across the state. In a competitive market, such price setting could stifle competition and harm renters by eliminating the possibility of lower prices through market forces. By sharing non-public information, the landlords were allegedly able to avoid competing on price and instead align their strategies, ensuring higher rents across the board.
RealPage’s Defense
RealPage, for its part, has strongly denied the accusations. A spokeswoman for the company, Jennifer Bowcock, stated that the software used by RealPage is designed to comply with housing laws, and the claims brought by the New Jersey attorney general are without merit. Bowcock argued that the technology is intended to help landlords better manage their properties and streamline the rent-setting process in a manner that complies with market standards and regulations.
In an email statement, Bowcock said, “The claims brought by the New Jersey attorney general are devoid of merit and will do nothing to make housing more affordable. New Jersey should stop scapegoating pro-competitive technology that helps landlords maximize efficiency and productivity.”
What’s Next?
The lawsuit marks a significant moment in the ongoing conversation about the rising costs of housing in New Jersey, and across the United States. The state’s legal action has sparked widespread discussion about the role of property management technology in the affordability crisis. New Jersey lawmakers and consumer advocates are watching closely, as this case could set a precedent for how similar cases are handled in the future.
For renters struggling with high housing costs, this lawsuit represents a critical opportunity for reform. If the state prevails, it could force significant changes in how property managers and tech companies like RealPage operate in the marketplace, potentially leading to lower rents and more transparency in the pricing of rental properties.
As the case progresses, New Jersey residents and those in other states dealing with similar housing challenges will be keeping a close eye on the developments. For now, the state is determined to ensure that renters aren’t being taken advantage of by a system rigged in favor of landlords and corporate interests.
A Broader Conversation on Housing Affordability
The New Jersey lawsuit is part of a larger national conversation about the rising cost of housing, especially in urban areas. As cities across the U.S. grapple with housing shortages, increasing demand, and soaring rent prices, many are beginning to question whether property management companies and tech firms have too much influence over pricing in the real estate market.
Advocates for renters have long argued that more transparency and accountability are needed in the housing sector. If successful, this lawsuit could help fuel further efforts to protect tenants and create a more balanced, fair, and affordable housing market for everyone.
As the case unfolds, the spotlight will be on the tech-driven practices of RealPage and its influence on the rental market, with the outcome potentially reshaping how property management software is used—and whether it serves the interests of tenants or landlords.