RICHARDSON, Texas — A new report from ProPublica has documented how one Richardson-based company is helping landlords across the country push the highest rents possible onto their tenants.
The company, RealPage, offers software called YieldStar, which provides suggested rent prices for units using data analytics. A video touting the company's services states apartments rents have recently shot up by as much as 14.5%.
“The beauty of YieldStar is that it pushes you to go places that you wouldn’t have gone if you weren’t using it,” said JVM Realty Director of Revenue Management Kortney Balas about RealPage’s software in a testimonial video on the company’s website.
ProPublica's investigation found RealPage became the dominant provider of rent-setting software in 2017, expanding the company's influence on rent prices and increasing their customer base past 31,700.
RealPage released a statement denying the article's accusations, saying it contained numerous misleading statements and ignored key facts.
"Revenue management software cannot control the market because it does not consider or have visibility into market availability," the statement reads.
"Additionally, the article implies vacancy and resident turnover have increased due to revenue management, which is exactly opposite of what has occurred, as both have steadily declined over the last decade even as revenue management software usage increased."
YieldStar uses an algorithm to analyze data from clients like what nearby competitors charge, the report detailed, upending the practice of tenants negotiating with apartment staff and discouraging bargaining with renters.
The report added that RealPage has even recommended landlords accept lower occupancy rates in some cases to raise rents and make more money, and one of the developers of the algorithm told ProPublica leasing agents had "too much empathy" compared to computer-generated pricing.
Former RealPage employees told ProPublica as many as 90% of the software's rent price suggestions are adopted.
Some critics have told ProPublica the algorithm could be artificially raising rents and stifling competition.
“Machines quickly learn the only way to win is to push prices above competitive levels,” University of Tennessee law professor Maurice Stucke told ProPublica.
A RealPage representative told ProPublica in an email that the company “uses aggregated market data from a variety of sources in a legally compliant manner.”