
U.S. Congressman Ruben Gallego speaking with attendees at a "Pachanga to the Polls" event for the Kamala Harris for President campaign at Ocotillo in Phoenix, Arizona. Photo by Gage Skidmore.
A software company under state and federal investigation for allegedly working with massive property management companies to create illegal rental monopolies could soon face its biggest opponent yet: the United States military.
US Sens. Ruben Gallego, Elizabeth Warren, and 13 other Democratic senators sent a letter Tuesday to US Defense Department Secretary Pete Hegseth, asking for an investigation into RealPage for algorithmically raising rents based on tenants’ military status.
“Our military families already sacrifice so much to serve our nation, often having to relocate every few years,” Gallego said. “It is vital we ensure RealPage’s algorithm is not used to price gouge military families.”
A series of surveys conducted by the nonprofit Blue Star Families found that in 2023, only about 25% of military families said their housing allowance covers all their housing costs. That number has plummeted since 2019, when that same allowance was enough to cover housing costs for over 40% of families surveyed.
Targeting military families
Traditionally, landlords raise rents based on market conditions such as housing supply versus demand, property taxes, or inflation. What RealPage is accused of is developing software to determine the maximum tenants could afford to pay, then collaborating with landlords so they could raise rent in tandem, essentially creating a rent monopoly. In Arizona, where rents across the state increased by 30% in just two years, one in ten rental units is managed by a company that uses Realpage’s software.
In a scheme targeting military families, the price-gouging could become much more targeted. Service members’ salaries are public knowledge, as is the amount they receive in housing assistance, known as the Basic Allowance for Housing (BAH). This information could be added to the algorithm’s decision-making process, allowing it to raise rents to the maximum each tenant receives in housing assistance—or even higher if they have a higher-earning military rank.
“The Basic Housing Allowance is meant to support military families – not line the pockets of corporate landlords,” said Gallego.
Military leaders have alerted officials in the past that service members’ rents have gone up to match increases in soldiers’ housing allowance, and a 2022 study by economists at Old Dominion University found that landlords raise rents to match pay raises services members receive when promoted to a higher rank, effectively erasing an increase in their take-home income.
Add these factors into an algorithm used by enough landlords to represent a dominant share of the rental market, and housing costs for service members could be raised to stretch their budgets even further—all at the taxpayers’ expense. The Defense Department’s current budget allots $24 billion for the BAH, a fact the senators make a point of in their letter to Hegseth.
“In fiscal year 2023, DoD spent $24 billion on BAH. There are long-held concerns, however, that landlords are raising rents to pocket these BAH increases,” the letter states. “In 2022, DoD increased the BAH for 28 military housing areas where rental housing costs increased by an average of more than 20 percent. The lawsuit of DOJ and state attorneys general alleges that RealPage contributed to excessive rental costs in several of these places, including San Diego, Wilmington, and Houston.”
What’s next?
The Defense Department has yet to comment on the senators’ request, but it is unclear if any action will be taken—or even if current investigations by other federal agencies will continue under the Trump administration. Under former President Joe Biden, the US Justice Department’s investigation led to FBI raids on some of the corporate landlords involved, and attorneys general in several states joined in to build a stronger, nationwide case against rental price-gouging.
Arizona Attorney General Kris Mayes, who announced her lawsuit against RealPage last February, told The Copper Courier that she purposely did not merge her efforts with the federal actions taken against RealPage in the event they were shut down by President Donald Trump.
“One of the reasons that I have started to—shall we say, diversify our antitrust portfolio by filing some of these cases in state court is because we didn’t know for sure who was going to win the election,” Mayes said. “We will continue to bring antitrust cases—with or without them.”
Mayes case against RealPage is still in the pretrial phase, with trial dates expected later this year.
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