This article is part of the 2025 Mid-Year Housing Industry Update. Click here to read the full newsletter.
Algorithmic pricing software monitors real-time market conditions and recommends real-time adjustments based on data-driven insights. These tools are used across industries, including rental housing, hospitality, ridesharing, air travel, live entertainment, insurance, and e-commerce to enhance efficiency and improve decision-making.
In the multifamily housing sector, algorithmic pricing software is widely used to help assess potential rent prices and manage occupancy rates. While many property owners and operators view these tools as essential for improving transparency and operational efficiency, some critics argue that the tools could facilitate rent inflation by aggregating and potentially sharing proprietary pricing, occupancy, and inventory data among competitors. With lawsuits and ordinances mounting nationwide, the role of algorithmic pricing in housing hangs in the balance. At the center of much of the litigation is RealPage, a leading provider of rental pricing software widely used across the multifamily housing industry. Yardi, another prominent property management and pricing platform, has also been named in similar legal challenges. 5 Dozens of lawsuits have been filed by putative class representatives challenging the use of RealPage's software under federal antitrust laws. These cases have been consolidated in the Middle District of Tennessee as a multi-district litigation captioned In re RealPage, Inc., Rental Software Antitrust Litig. (No. II), No. 3:23-md-03071.
In November 2023, the Department of Justice (DOJ) filed a statement of interest in the RealPage case. The following year, the DOJ—along with multiple state attorneys general—filed United States v. RealPage, Inc., No. 1:24-cv-00710, in the Middle District of North Carolina. Other states, such as Kentucky, have filed their own lawsuits. Meanwhile, another class action, Duffy v. Yardi, No. 2:23-1391, in the Western District of Washington, makes similar claims against landlords and property managers who use Yardi's algorithmic pricing software. In March 2024, the DOJ also filed a statement of interest in the Yardi case.
At the heart of these lawsuits are allegations that landlords and property managers are using algorithmic pricing software to engage in unlawful price-fixing by pooling nonpublic, competitively sensitive information—a possible per se violation of Section 1 of the Sherman Act. Treble damages and attorneys' fees would be awarded to successful antitrust plaintiffs. Defendants in each of the cases deny any wrongdoing and maintain that their use of the software complies with the law and provides significant benefits to the housing market.
In parallel with the litigation, cities are taking legislative action. Municipalities are passing legislation banning the use of algorithmic pricing tools, with ordinances going into effect in San Francisco, Berkeley, Philadelphia, Minneapolis, San Diego, and Seattle between 2024 and 2026. Philadelphia's ordinance, for instance, bans software that facilitates landlord "price coordination" through the collection of nonpublic pricing, supply, and occupancy data and the generation of rent recommendations. Similar to antitrust laws, Philadelphia's ordinance creates both a public and private cause of action and allows for treble damages and attorneys' fees for private plaintiffs. RealPage is fighting back against Berkeley's law. In April 2025, the company filed a complaint challenging the city's ordinance on First Amendment grounds.
RealPage and Yardi maintain that algorithmic pricing software benefits both property owners and renters by increasing market efficiency and improving pricing transparency. RealPage explains that its software is designed "to optimize revenue—not to maximize rents. It makes rental price recommendations in all directions: higher, lower, or at the current rent price."
Once promoted as tools for efficiency and market responsiveness, algorithmic pricing systems have become flashpoints in a growing legal and policy debate. As critics warn of their potential to enable price coordination through shared access to sensitive, nonpublic data, the outcome of ongoing litigation and legislation will likely shape the future role of pricing technology in the rental housing market.
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