WASHINGTON — Depending on where you live, the cost to rent an apartment, townhouse, or home is on the rise like. A June 2022 analysis from Redfin, a real estate company, showed the median rental cost nationwide exceeded $2,000 for the first time. In Washington, D.C., rental costs jumped 12.5% compared to 2021.
Families are feeling the pinch and now some legislators believe market manipulation may play a role in the increase.
“Our constituents cannot afford to have anticompetitive- and potentially per se illegal—practices drive up prices for essential goods and services at a time when a full-time, minimum wage salary does not provide a worker enough money to rent a two-bedroom apartment in any city across the country,” read a joint letter from Congressional representatives Jesus Garcia (D) of IL and Jan Schakowsky (D) IL to the Federal Trade Commission and the Department of Justice.
The letter cites an investigation by ProPublica, the news organization found RealPage, a real estate software company, uses an “amalgamation of rental data in a manner that may violate antitrust laws”.
RealPage uses its clients’ internal rent data in proprietary software that ‘deploys an algorithm—a set of mathematical rules—to analyze a trove of data RealPage gathers from clients, including private information on what nearby competitors charge,” the letter said. That data is then used to determine the cost of available units, a price that could fluctuate daily.
“Part of any business is embracing technology, like algorithms and AI, which provide data-driven insights into supply and demand. While these technologies can increase rent, the reverse is also true: if the local market cannot support rent levels, asking rents will drop,” said Bob Pinnegar, President & CEO of the National Apartment Association in statement to WUSA9.
A class action lawsuit filed in US Dstrict Court in San Diego on Oct. 18 accuses RealPage, Inc. of using an algorithm that allows, “participating lessors to coordinate supply levels to avoid price competition,” the complaint read. The complaintants accuse RealPage, Inc .of inflating prices and reducing occupancy in order to maintain those prices. The lawsuit asks for a jury trial, a judgement against the company, and an unspecified monetary award.
Rising rental costs are crushing families and many of them are turning to affordable housing organization for help. In May, WUSA9 profiled Terry Nicholetti, 76, who was able to successfully secure affordable housing with Jubilee Housing, an organization that provides affordable housing and community resources to those in need.
“I have a residence that's safe, that I can afford out of my Social Security, with the community and with guidance of other services," said Nicholetti in May.