- RealPage filed a federal lawsuit against Berkeley, California, challenging the city’s ban on algorithmic rental pricing tools, calling the ordinance unconstitutional and a restriction on free speech.
- Berkeley’s new law, set to take effect April 24, 2025, bans the use or sale of software that helps landlords set rent or manage occupancy using algorithms.
- The lawsuit adds to ongoing legal scrutiny of RealPage, which is already facing federal antitrust suits and a DOJ investigation into potential price-fixing.
Background:
RealPage, a Texas-based property management software company, is pushing back legally after Berkeley became the first U.S. city to formally ban the use of algorithmic rent-setting software. The new law—Municipal Code Chapter 13.63—passed in a near-unanimous city council vote on March 25 and goes into effect later this month, according to GlobeSt.
In its complaint, RealPage argues the ordinance violates constitutional protections, characterizing it as an attack on “lawful speech” and claiming it prevents the company from using publicly available data to offer pricing advice to its customers.
The Core of the Debate:
RealPage’s pricing tools have come under fire since a 2022 ProPublica investigation alleged the software helped landlords coordinate rental rates, contributing to rising housing costs. The company denies the claims, saying the true driver of rent increases is limited housing supply, not technology.
Berkeley officials, along with policymakers in other cities, argue the use of such software may be artificially inflating rents—especially in competitive housing markets.
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Legal Landscape:
This lawsuit is the latest in a string of legal challenges facing RealPage:
- 2022: A class action lawsuit accused RealPage and several landlords of colluding to raise rents by sharing pricing data.
- 2024: The Department of Justice filed a price-fixing lawsuit, expanding its scope in 2025 to include additional property owners.
- 2025: A second class action added claims related to student housing.
Why It Matters:
With more municipalities considering similar tech bans, this case could set a precedent for how cities regulate algorithmic decision-making in real estate. If Berkeley’s ordinance holds, it may pave the way for other jurisdictions to crack down on rent-tech software, especially amid ongoing affordability crises in major metros.
What’s Next:
The ordinance is scheduled to take effect on April 24, but the outcome of the lawsuit could delay or overturn the law. All eyes are on this case, as its resolution could shape how far cities can go in regulating the use of data and algorithms in the rental market.
According to industry watchers, the case is also likely to influence ongoing federal scrutiny, with the DOJ’s antitrust investigation still expanding.
