Realpage Judgment Berkeley Over Ban for Algorithmic Rental Pricing

The city of Berkli, California, is judge By Realpage over your ban on algorithms used to determine the prices of rental apartments. The court case states that the Berkli Ordinance passed in March It is a “extensive and non -constitutional prohibition of legal speech” and a violation of the prohibition of the first amendment to the content -based restrictions.

Realpage is a controversial company that has been cartel of some legislators in the United States. It is not difficult to understand why: Realpage essentially offers landlords an algorithm that can maximize your revenue By evaluating the client’s properties, together with the rental data from nearby properties, to offer offered rental prices. Many people no longer like landlords about what they think is a fundamental amoral business model – winning people who need a roof over their heads. Realpage serves as a way out to express this impotence.

Critics say that Realpage’s practice of comparing rent prices to make a proposal is an illegal prices. Last year, the Ministry of Justice under former President Joe Biden filed a lawsuit for civil antitrust meat against Realpage, accusing him of reducing competition among landlords, generating prices recommendations based on prices of rivals, while the “free” markets will have to compete independently on the basis of prices. Prosecutors claim that Realpage controls 80% of the market for commercial revenue management market.

Data compiled by the Ministry of Justice show how in certain regions, where the Realpage software is distributed, the rents are increased at a higher rate than the national average – although it is difficult to quantify how many of these increases can be assigned to the Realpage software. In his court case, however, the Ministry of Justice cites the own words of the Realpage leaders about how the product can maximize revenue for landlords: “There is a greater benefit to all successful, against essentially trying to compete in a way that actually supports the whole industry.”

A common refrain in MBA programs is that companies do not have to participate in price wars. Realpage’s comments suggest that it follows such a logic, although the company is adamant that it does not participate in an illegal secret. It states that landlords accept their proposals less than 50% of the time, and the company believes that Berkli’s ban is redemption. The real problem, says Realpage, is a severe lack of housing.

In one case cited by the Ministry of Justice, Realpage suggested The landlord can increase the rent by 7%by reducing the employment rate from 97%to 95%. But on a high -vacant job market, Realpage will claim that landlords will still be bound by market forces to lower the rent to achieve the employment goal.

Proponents of the “abundance” or Yimby’s movements claim that the housing market deregulation will lead to lower rental prices. The development of new properties in states such as California is a slow, difficult process, and new apartment buildings are often directed by NIMBY types that use environmental laws to try and thwart any new development. Dragulation can also potentially allow schemes such as Realpage to flourish.

In Berkeley specifically, a report of the Housing Advisory Committee finds that six major real estate companies indicated in court cases for Realpage software have over 1300 apartments in the city. The ban on the Realpage software will come into force on April 24, but the company is looking for a temporary restraining order to block it.

While Realpage is strongly based on first amendment arguments, many activities that include free speech are still illegal. Price fixation conspiracy may include free speech, but this does not make its regulation illegally. It is unclear where the courts will go down to this case or whether the Trump administration will even continue with court disputes.

As much as this case is shaken, landlords should be aware that they do not greatly behave in the United States and this software does not make them any services.