A flurry of legal activity last week has pushed multifamily revenue management back into the news cycle. It's worth taking a moment (and a slightly longer-than-usual article) to understand what happened and what it might mean for our industry.
Last Monday, the DOJ announced it had reached a settlement with RealPage in its year-long antitrust lawsuit. The settlement follows previous settlements with Greystar and Cortland, signaling the winding down of its investigations.
A big, fat Nothingburger
In the media, pro-lawsuit voices were quick to report that the RealPage settlement will profoundly change revenue management. But those closer to the facts know better. The agreement bars RealPage from using confidential, nonpublic data in its pricing models, which the company had stopped using more than a year ago.
For the DoJ, this settlement is more fig leaf than fundamental win. It has little to show for its investigation since announcing the suit to great fanfare in the run-up to last year's election. Many believed at the time that then–Attorney General Merrick Garland's appearance in front of the cameras was the real objective. The suit followed a year of blue-state legislation that presumably made this issue look like a political winner.
The DoJ's announcement of the settlement during Thanksgiving week signals what one might charitably call a change of priorities. This news also follows last December's collapse of the DOJ's (absurd) criminal investigation. It is hard to see the events of the last year or so as anything other than a huge waste of agency time. (And a predicable one, based on interviews with federal antitrust experts on the 20for20 pod - see Season 2, Episodes 2 and 5).
On the Front Foot
Next, RealPage announced that it had taken the more aggressive step of suing Attorney General of New York, Letitia James, over a sweeping new law. It prohibits the use of a broader set of data in algorithmic pricing than the DoJ was seeking to ban. The New York law, like the one recently passed in Seattle, bans not just nonpublic data from pricing algorithms but also publicly available competitor data.
Everyone needs to understand this distinction. Since RealPage stopped using nonpublic data in its pricing algorithms, there is no basis for accusations that operators are colluding by sharing confidential information. Progressive legislatures like New York and Seattle have therefore changed strategy, focusing instead on pricing algorithms that use any kind of competitor data, including data from public sources.
That is a big problem. These laws seek to outlaw the types of math companies are allowed to perform on data they are perfectly entitled to possess. It is not the government's job to regulate mathematics, and RealPage's lawsuit correctly challenges New York's attempt to restrict companies' constitutional right to free speech.
Separating bad Ideas from bad Laws
The past three years have muddied the conversation about revenue management (RM) and data. This blog has consistently tried to explain what is bad about the legal campaign against pricing algorithms. But the noise surrounding these cases has also obscured some bad ideas about how competitor data should be used in RM. We need to distinguish flawed policy from flawed practice, as the table below summarizes.
For nonpublic data, it is untrue that it ever enabled companies to collude (as our 2023 white paper explains), which is why the lawsuits are spurious. It was nevertheless a bad idea to include nonpublic data in a pricing algorithm, for reasons that should now be obvious. Turning off the nonpublic data has had a negligible effect on how the algorithm works. The data element that is central to the allegations of collusion turns out to be peripheral to the algorithm. But its presence is what exposed the industry to the legal problems it has faced for the last three years.
The question of public data benefits from similar scrutiny. The Seattle and New York laws are cynical, politically motivated and probably unconstitutional. But while we should defend companies' rights to perform whatever analysis they want to on data that they are allowed to own, that doesn't make analysis worthwhile.
As this blog has previously explained, it is a bad idea to allow competitor data to guide a pricing algorithm. Multifamily RM prices fixed assets that typically operate at about 95% occupancy. There are relatively few units to price, and each property's context is very different from the broader market. You cannot improve pricing by moving closer to the market average. Comp prices are a useful guardrail, but do not belong in the algorithm.
Where Does This Leave Us?
The DoJ actions look done, but the private lawsuits that started this process three years ago are still ongoing, as are many suits from various state attorneys general. Some defendants have moved to settle the consolidated and state suits, and others will presumably follow, though it is impossible to say when or what the outcomes will be.
Meanwhile, it should be clear to everyone that anti-landlord legislative actions are far from done, and the details of current and planned laws should be central to operators' RM and technology strategies.
Seattle and New York represent a new frontier for legislation targeting software that has already complied with bans on nonpublic data. We should all hope that RealPage's lawsuit against New York will give legislators pause, but 2026 is an election year. And politicians do strange things during campaigns, which does much to explain the events of the last year or so at the DoJ.
Photo by Mike N on Pexels