Have you ever wondered wherefore your rent is truthful damn high? Ask immoderate economist oregon lodging adept and they’ll archer you the crushed is simple: There’s not capable housing. Too galore tenants are competing for excessively fewer units, which drives up prices. There is immoderate information to this. We perfectly request much affordable lodging successful galore US markets, and wherever lodging is scarce, prices bash rise. But the elemental supply- broadside communicative misses thing crucial—an mentation for wherefore lodging prices, similar different prices, are higher than they should be: firm power.
Landlords person held the precocious hand. Moving is simply a pain—expensive, stressful, and time-consuming—and landlords cognize it. That’s wherefore they often rise rents twelvemonth aft year, betting that astir tenants would alternatively enactment up with the hike than woody with the hassle of relocating. Even those consenting and capable to determination whitethorn enactment enactment if they can’t find different spot successful the close vicinity oregon schoolhouse district. Scarcity successful rental markets, arsenic successful immoderate market, creates powerfulness imbalances. And successful a seller’s market, galore renters simply don’t person the enactment to ballot with their feet.
In caller years, firm consolidation and algorithmic pricing tools person made those imbalances worse. Landlords nary longer request to collude implicit backyard barbecues to hole prices—they tin bash it online, aided, arsenic we’ve seen, by a caller breed of existent property tech firms. Your landlord mightiness not beryllium gathering the neighborhood’s different landlords to swap gouging strategies implicit steak (though who’s to say?), but they are coordinating. And they’re doing it with assistance from bundle built to bash precisely that.
To perceive him picture it, galore landlords were hardly moving existent businesses.
Stephen Winn, a hard-nosed Texan with a sensation for large data, founded RealPage successful 1998. The institution launched its archetypal existent property bundle strategy successful 2001. The pursuing year, it acquired a budding start-up called YieldStar—soon to go the crown jewel of RealPage’s portfolio and the backbone of its price- coordination capabilities. Two years later, RealPage besides acquired Re-Opt, on with its laminitis and CEO, the aforementioned Jeffrey Roper, who was promptly named president and main idiosyncratic of YieldStar. Roper merged the 2 systems and began processing what would go RealPage’s signature suite of AIpowered “revenue absorption software,” or, to dispense with the Wall Street euphemism, price- fixing software.
Jeffrey Roper describes himself arsenic a “numbers nerd.” Sure, Roper knows his mode astir analyzable machine programming languages, but his existent passionateness is simpler: cold, hard cash. He’s a price- hiking instrumentality whose tenure arsenic the manager of “revenue management” astatine Alaska Airlines, wherever helium helped pioneer their exemplary of dynamic pricing, landed him successful the FBI’s crosshairs—his archetypal time, anyway. Roper claimed helium didn’t recognize the exemplary constituted price- fixing, and that helium was stunned erstwhile national agents seized his papers. More than 20 years later, that mentation beggared belief.
I knew erstwhile I began this publication that I had to speech to Roper. We spoke implicit Zoom successful the outpouring of 2025. He wasn’t what I expected. Friendly, mild-mannered, adjacent humble, helium wore a bluish T-shirt and overalls and sat successful beforehand of a coatrack crowded with cowboy hats. Every truthful often, helium calmly took a resistance from what looked similar a vape pen. He seemed anxious astir being misunderstood—or astir sounding similar a cartoon villain. After our interview, helium followed up implicit email to accidental helium disquieted he’d travel disconnected arsenic excessively flippant. But it was wide that Roper saw himself arsenic a reformer, not a profiteer. He was arrogant of what he’d built and anxious to support its logic. Roper is simply a existent believer successful the virtuousness of businesslike pricing.
I asked him however it each began. He told maine his vocation was “a spot of serendipity.” He’d spent the 1970s bouncing astir the question and hospitality concern erstwhile helium discovered a “remarkable proclivity” for computers. Airline deregulation was nether way, and the large carriers were scrambling to past without government-controlled pricing. They had just
come disconnected “nineteen years of profitability,” Roper told me, “and we were determined to clasp connected to that and not suffer it.” Around him, airlines were merging, folding, oregon panicking. That’s erstwhile American Airlines launched a proprietary in-house solution called gross management.
Roper was hopeless to flight lawsuit service, truthful erstwhile a mates of entrepreneurs approached him astir gathering a caller gross absorption system, helium jumped astatine the chance. He said helium spent respective years “immersed” with them, gathering what became the “first commercialized gross absorption solutions.” Unlike American’s backstage system, this 1 could beryllium licensed. Eventually, Roper was hired by Alaska Airlines to physique retired their ain gross absorption platform.
Once wrong the industry, Roper was appalled by however airlines acceptable prices. They were full Luddites. He was successful his precocious twenties erstwhile helium was invited to articulation the airlines’ tariff committee. He was thrilled. He thought: “This is great. I’m gonna spell beryllium with the elder vice presidents of everything. The brainiacs, right, the gods of Olympus volition beryllium there, and I’m going to get to larn however large concern truly runs.”
Then the gathering started.
One hose enforcement told a communicative astir a rider he’d spoken with connected a formation from Spokane, Washington. The rider had complained astir a fare hike. As Roper tells it, a “couple minutes later, [the airline] changed the price.” He was stunned. “There was not a statistical investigation successful sight, determination was conscionable benignant of a, you know, ‘Well, how’s postulation doing?’ ‘Yeah, it looks beauteous good.’ ‘We’ll alteration the terms by 10 bucks oregon something.’” Roper added: “You could person deflated maine with a pen.” It was then, helium said, that helium realized however rudimentary hose pricing truly was—and however overmuch wealth the manufacture was leaving connected the table. The acquisition “reinforced my committedness that, man, we request to bring immoderate rigor to this. There’s an accidental here.” That opportunity, Roper told me, “has inspired maine ever since.”
Eventually, disquieted that Alaska mightiness beryllium acquired, Roper jumped ship. He joined forces with Bob Cross (another sanction that volition resurface aboriginal successful the book) to grow the usage of gross absorption systems beyond hose tickets. According to Roper, we “branched much into hotels, rental cars, cruise lines, and past nontransportation, hospitality work.” That enlargement took him abroad—most notably to Central and Eastern Europe.
What thrilled him astir was the earthy potential. “In the US and adjacent successful Europe, we were chasing second- decimal precision improvements,” helium said. “Still producing immense numbers, but it truly wasn’t rather arsenic absorbing arsenic going into these emerging markets wherever you had 5 and 10 percent upsides that were conscionable truthful intelligibly visible.” In different words, portion shaving 0.01 percent disconnected a metric mightiness impressment a hedge money analyst, Roper was aft the bigger prize. Emerging markets, with their inefficiencies and unprofessional systems, offered him thing acold much tantalizing: margin.
When Roper yet returned to the United States, helium came backmost with a mission. “I benignant of came backmost looking for immoderate emerging markets successful the US,” helium told me. “There’s immoderate untapped gems retired there.” The archetypal of those “gems” helium pursued was lawsuit ticketing, but that rapidly turned into a bust: Ticketmaster already had a “death grip” connected the market. “It was a flammable hurdle,” Roper said. “It’s excessively risky, and we’re going to put 5 years getting in. One subordinate is the gatekeeper. Every accidental that you hazard it each and lose.” So helium pivoted. That’s erstwhile helium stumbled into multifamily commercialized existent estate. What helium recovered determination took his enactment away.
The imaginable wasn’t conscionable theoretical. “The summons worth of the transactions is significant,” helium said. “Even then, 30 percent of people’s income and worldly similar that. This is simply a nontrivial transaction.” In different words: rent. Because the rent is truthful damn high, determination was existent wealth to beryllium made. And Roper believed helium could compression adjacent much retired of the strategy by applying the aforesaid dynamic pricing techniques helium had perfected connected edifice nights and hose tickets.
What shocked him was however unregulated—and unsophisticated—the rental marketplace seemed. The process by which tenants were being selected, and by which their rent was being determined, was “literally wholly manual and decentralized,” helium explained. In different words, quality beings were mounting rent prices based connected intuition oregon section knowledge, not algorithmic optimization. For idiosyncratic similar Roper, this wasn’t a flaw but a concern opportunity.
To perceive him picture it, galore landlords were hardly moving existent businesses. “I don’t privation to dependable patronizing oregon condescending,” helium said, “but these are not postgraduate students.” Operations were “mom and popular driven” and often resembled much of a frat location than a fiscal instrument. “You had fundamentally a genitor surviving successful the bureau collecting
rents and conscionable benignant of doing the basics of looking aft things. But that was truly it. It wasn’t looked astatine arsenic a peculiarly commercialized endeavor.” So Roper acceptable retired to alteration that—to professionalize the concern of collecting the rent, and on the way, to cod much of it.
He pitched the idea: a agelong runway, sure—three to 5 years—but a monolithic marketplace and a immense opportunity. But the timing wasn’t great. It was conscionable aft 9/11, and superior had dried up. Roper, convinced the marketplace was being shortsighted, walked distant from his steadfast and launched his ain company. He spent a mates of years consulting to support the lights connected portion gathering his existent property pricing bundle from scratch. He didn’t rush, making definite helium understood the abstraction and its requirements. Then helium built the product. RealPage—already connected the hunt for a gross optimization instrumentality aft a mates of failed attempts—came calling. They bought the software. They bought Roper. And they kept him connected board. “I went with them and stayed determination until we took it public.”
RealPage had a program for that too—and it was called “revenue extortion mode.”
The rest, arsenic they say, is history.
As of 2023, RealPage was the country’s ascendant spot absorption bundle vendor for multifamily housing. In summation to acquiring twenty-six competing companies, RealPage bought its largest rival, Rainmaker LRO, successful 2017, making it the nation’s apical supplier of rent-setting bundle and leaving it with lone 1 sizable competitor: Yardi, which offers a YieldStar-like programme with the not-so-subtle moniker “RENTmaximiser.”
By 2024, RealPage controlled astir 80 percent of the existent property gross absorption marketplace for multifamily dwellings and held the keys to datasets from astir sixteen cardinal rental units nationwide.
According to a study from the investigative quality outlet ProPublica, this bundle was truthful prolific among ample landlords that arsenic galore arsenic 70 percent of apartments successful immoderate neighborhoods were owned by companies utilizing RealPage’s price- coordination algorithm.
The Department of Justice’s ailment against RealPage offered a uncommon glimpse nether the hood of its YieldStar algorithm, revealing however the strategy kept rents elevated—even successful a down market. One of its cardinal features was the marketplace minimum effectual rent, oregon what the DOJ called RealPage’s “hard floor.” YieldStar surveyed each leases for a peculiar level program and generated a pricing illustration that included some a minimum and maximum rent based connected the disposable data. But, according to the tribunal filings, YieldStar was programmed ne'er to urge a rent beneath the minimum rent, efficaciously creating that “hard floor” for rent prices.
So what astir the maximum rent? Was determination a “hard ceiling” to match? Nope. YieldStar treated the maximum rent arsenic a barroom to clear. It was simply a “soft ceiling,” a suggestion—not a constraint. The algorithm recommended rent prices higher than the alleged maximum for a fixed level plan.
Another feature, “the governor,” was designed to show regular fluctuations successful rent prices and favour increases implicit decreases. When the optimal terms roseate from 1 time to the next, the politician ensured that the caller higher terms was recommended. But erstwhile the exemplary calculated that the optimal terms had dropped, it recommended holding dependable alternatively than pursuing a corresponding decrease, adjacent erstwhile it mightiness payment the landlord.
YieldStar’s pricing recommendations were asymmetric: They allowed for hikes but resisted cuts. This created broader distortions successful the rental market, akin to a dynamic that economists telephone “rockets and feathers.”
Here’s however it works. Say you ain a state station. If the terms of crude lipid spikes, you rise prices astatine the pump immediately—like a rocket. But erstwhile crude prices fall, you instrumentality your saccharine clip passing the savings along. Prices drift down slowly—like a feather. Because of the asymmetric mode YieldStar was programmed, rent increases could beryllium accelerated and frequent. Rent reductions, if they came astatine all, were likelier to beryllium dilatory and rare.
Perhaps the astir sinister constituent of RealPage’s algorithm was “sold-out mode,” which mightiness arsenic good person been called gouge mode. According to the DOJ complaint: “Once a landlord reaches its targeted capableness for a peculiar level plan, the exemplary considers that level program ‘sold out’ adjacent though units whitethorn inactive beryllium physically available. In that situation, AIRM and YieldStar recommends the maximum rent charged by a property’s competitors, adjacent if the level plan’s erstwhile terms was acold lower.” In different words, the infinitesimal a marketplace tightened, YieldStar kicked into overdrive.
Initially, sold-out mode was programmed to propulsion rent prices to astatine slightest 95 percent of the highest comparable rent precocious seen. But by 2022, RealPage decided to spell for broke: It instructed the algorithm to lucifer 100 percent of the apical rival price.
RealPage had a program for each scenario: a program to instrumentality vantage of a choky market, a program to rise prices rapidly and driblet them slowly, and a program to guarantee rents ne'er fell beneath a “hard floor.” But what astir an economical downturn, erstwhile request was low? Surely past the algorithm recommended rent reductions? Nope. RealPage had a program for that too—and it was called “revenue extortion mode.”
Revenue extortion mode activated erstwhile rental request was weak. According to basal economical theory, little request should pb to little prices. Ask immoderate economist what happens successful a sluggish rental marketplace and they’ll decorativeness your condemnation for you: Rents fall. But successful the existent world, if your landlord utilized RealPage, that’s not ever what happened.
If the algorithm is the encephalon of the operation, RealPage’s employees were the brawn.
Instead, gross extortion mode—according to the DOJ—prioritized maintaining gross by leasing less apartments astatine higher prices. This strategy is communal successful luxury goods markets, wherever selling less handbags astatine higher prices is much desirable than selling galore astatine little ones. But successful existent estate, the accepted contented has agelong been to “keep heads successful beds”—even if that means cutting a tenant a deal. RealPage flipped that mantra. Its extremity was to upwind downturns by maximizing revenue, adjacent if that sometimes meant reduced occupancy.
Even RealPage admitted that this “may look counterintuitive.” But that’s however the strategy was designed, to sphere pricing power, adjacent erstwhile marketplace fundamentals suggested otherwise. One RealPage information idiosyncratic enactment it plainly: “The exemplary truly wants to trim rent but is prevented from doing truthful by the gross extortion restriction.”
But couldn’t landlords override these recommendations if they wanted to capable units? In theory, yes. In practice, it wasn’t truthful easy. Its “autoaccept” diagnostic defaulted galore landlords into outsourcing their pricing decisions altogether. As 1 RealPage economist enactment it, they’re “trust[ing] the science.”
Landlords who opted successful to autoaccept agreed to judge immoderate rent recommendations
that fell wrong default thresholds: up to 3 percent regular oregon 8 percent play terms changes. There’s besides a “partial autoaccept” mode, which accepted lone the information of a proposal that acceptable wrong those limits. For instance, if YieldStar recommended a 4 percent regular hike, partial autoaccept would instrumentality lone the default 3 percent.
But RealPage’s pricing schemes didn’t enactment if excessively galore landlords defected and undercut prices—that’s wherever the musculus came in. If the algorithm is the encephalon of the operation, RealPage’s employees were the brawn. They weren’t conscionable penning code. They were collecting delicate data, convening landlords for information-sharing sessions, and enforcing algorithmic discipline.
The cardinal enforcers were RealPage’s “pricing advisers,” assigned to idiosyncratic landlords to show compliance. When a spot manager rejected a recommended rent, the advisor reviewed the rejection and the justification. Then, according to the DOJ’s complaint, “If the pricing advisor disagrees with the rejection oregon justification, the disagreement is escalated for solution to a landlord’s determination manager, who typically supervises the spot manager.” In different words, RealPage called your brag to snitch.
In 1 of RealPage’s caller lawsuit trainings reviewed by the DOJ, a elder pricing advisor referred to the pricing advisers arsenic portion of a strategy of “checks and balances.” Sure sounds to maine a batch much similar thing you’d perceive from the mob oregon a drug-trafficking cartel than a boring flat rental transaction. Oh, that 250-pound feline successful the achromatic SUV pursuing you to your adjacent job? That’s conscionable our strategy of checks and balances!
One of the pricing advisers’ astir indispensable functions was pushing landlords to default into “autoaccept mode.” RealPage trained its advisers to transportation skeptical landlords to alteration a astir toothless mentation of autoaccept that did not really necessitate them to judge immoderate regular oregon play rent adjustments. The logic was simple: Once landlords selected into autoaccept mode, adjacent successful its weakest form, pricing advisers could statesman the existent enactment of convincing them to judge the software’s pricing recommendations. It’s a small similar those timeshare salespeople who conscionable privation you to beryllium done a slideshow. Once they get your butt successful the chair, they cognize they tin commencement the hard sell.
According to 1 of RealPage’s interior grooming materials, pricing advisers aimed to physique “enough spot truthful that implicit clip we person client[s] that are consenting to fto car judge tally with precise wide parameters . . . AKA—accept each recommendations.” Advisers were besides trained to person “accountability conversations” with landlords who resisted using—or expanding—their autoaccept setting. These conversations were an accidental to springiness recalcitrant landlords a “refresher” connected institution goals. As the DOJ ailment puts it, RealPage advisers were trained to inquire themselves: “[I]f a spouse is not acceptable to usage car acceptance, are they acceptable to usage gross management?” In different words, if you weren’t going to judge RealPage’s prices, possibly you don’t beryllium successful the nine astatine all.
These groups definite dependable little similar bundle enactment forums and much similar a fraternity location for firm landlords.
RealPage besides facilitated and encouraged in-person coordination betwixt competing landlords done monthly “user group” meetings. These meetings were nary joke. Representatives from immoderate of the country’s largest landlords and spot absorption companies attended. Topics ranged from however to terms amenities—rooftop pools, communal barbecues, that benignant of thing—to however to support pricing subject during moments of crisis, similar the COVID-19 pandemic.
At the precise commencement of the pandemic, portion astir Americans were hunkered down, frightened for their lives and disquieted astir occupation loss, RealPage hosted a virtual pep speech for landlords. Attendees shared strategies to not “give distant the farm” connected rent and encouraged each different to “use transactional marketplace data” to “be much aggressive” with pricing—because seemingly thing says solidarity successful a nationalist exigency similar coordinated rent hikes.
User radical meetings often featured impermanent speakers. But landlords didn’t conscionable be idiosyncratic groups and blessed hours to larn and swap information. They besides collaborated connected proposals to amended RealPage’s products. They voted connected suggestions, participated successful email threads, and contributed to landlords- lone information exchanges. These groups definite dependable little similar bundle enactment forums and much similar a fraternity location for firm landlords.
In summation to idiosyncratic groups and pricing advisers, RealPage operated a telephone halfway that made much than 50 1000 calls each period to landlords crossed the United States. The standard was astonishing—something similar a backstage Census Bureau but for landlords. During these calls, RealPage employees collected information connected occupancy rates, level plans, rent levels, concessions, and a slew of different details astir owners, managers, and properties. They besides made definite to inquire whether the landlord utilized gross absorption software—YieldStar or, successful uncommon cases, a competitor. According to the DOJ, “these marketplace surveys screen implicit 11 cardinal units.” Across the country, landlords were feeding RealPage competitively delicate information, helping it amass an ever- larger trove of information to bid and fine-tune its algorithm.
Given the quality standard of this operation, it’s just to inquire if this allegation was genuinely an illustration of high-tech price-fixing, oregon conscionable old-fashioned price-fixing dressed up successful fancier clothes. The answer, I think, is that RealPage’s strategy was bigger than the sum of either its quality oregon algorithmic parts. The company’s sprawling portfolio, its strategy of “checks and balances,” and its information empire made it imaginable to coordinate terms hikes connected a standard ne'er seen before. But the exertion besides gave landlords and spot managers thing arsenic valuable: cover. It gave them plausible deniability—the consciousness that they weren’t acting similar greedy price-fixers, conscionable doing what the astute bundle said.
RealPage some enabled price-fixing and sanitized it. It made participating consciousness little similar a conspiracy and much similar bully business. If a rival called maine and said, “Hey, let’s collude hole prices,” I’d astir apt archer him to get lost. But if that aforesaid rival told maine helium was utilizing caller bundle that accrued profits by 15 percent, I mightiness inquire wherever to motion up.
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From Gouged by Lindsay Owens, published by Viking, an imprint of Penguin Publishing Group, a part of Penguin Random House, LLC. Copyright © 2026 by Lindsay Owens.
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