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RealPage Is Under Fire For Its Rent Algorithm — But A GOP Tax Plan Could Protect The Company From Lawsuits And Local Bans
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. RealPage, the Texas-based software company embroiled in a firestorm of controversy and legal struggles due to its algorithmic rental price setting, may have found an escape in its fight against state and local governments. The company has the latest GOP tax bill to thank for its possible lifeline. The bill, which passed the House on May 22, would hinder local and statewide efforts to ban algorithmic price-setting software, including RealPage and Yardi Systems, due to a provision that allows artificial intelligence-based decisions to prevail for 10 years. However, the bill would not prevent the civil lawsuit against RealPage brought by the Department of Justice from continuing. Don't Miss: Invest Where It Hurts — And Help Millions Heal: If there was a new fund backed by Jeff Bezos offering a ? Several U.S. cities, including San Francisco, Philadelphia, Providence, Rhode Island, and most recently, Jersey City, New Jersey, have implemented bans on the software, with several other cities on the verge of doing so, the Journal reports. The cities allege that RealPage and others help landlords engage in illegal collusion to ensure rental prices continue to rise by collecting and analyzing confidential data and using it against residents. Should the bill pass Congress, all that could change. "We would no longer be able to enforce this ban," Providence City Council President Rachel Miller told the Journal. Local governments would not take the new law lying down should it pass. Suing the federal government as a first retaliatory measure, Miller told the Journal. Secondly, they would lean on tenant-protection laws. "Rent control—that would be the biggest tool if folks are using algorithms to jack up rents," Jersey City Councilman James Solomon, who was recently successful in banning RealPage in his city, told the Journal. Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — RealPage is fighting back against the bans, suing Berkeley, California, over its ban. Meanwhile, landlord advocacy trade groups, such as the National Multifamily Housing Council, have intensified their lobbying efforts, arguing that the housing shortage, rather than algorithmic pricing, is the primary reason for rent increases. It has also reiterated RealPage's defense that landlords can refuse to follow RealPage's recommendations and set their own rental prices, and that large landlords do not contribute to the majority of rental units in the U.S. Rather, mom-and-pop landlords who do not use RealPage offer the majority of rentals. However, NMHC staff and others contributed suggestions to a House Financial Services Committee that shaped the current AI component in the GOP tax bill, according to The Wall Street Journal. "At a time when housing providers face increasing pressure to meet booming demand, tax policy should not stand in the way. Indeed, tax policy should lead the way," NMHC President Sharon Wilson Géno said in a letter of support sent to the chairman of the panel that added the provision to the new tax bill, the Journal has already suffered a reputation loss and the loss of potential business from landlords who have backed away from using it after the Atlanta offices of multifamily company Cortland were raided by the FBI last year as part of the DOJ investigation. Cortland ended up settling with North Carolina Attorney General Jeff Jackson, the only management company to have done so. "Everybody that I know has stopped using RealPage just out of sheer terror," Tony Julianelle, chief executive at real-estate brokerage Atlas Real Estate, told the Journal. RealPage has a lot to lose — $73 billion, according to the Journal, should it be unsuccessful in the lawsuits it is facing. Additionally, it would face significant restrictions on how its revenue management software is used. However, Congress could change the narrative should it diminish the influence of local and state lawmakers in their fight against RealPage, taking the wind out of the sails of the larger opposition. "It's not a get-out-of-jail-free card," Kevin Weller, a New Jersey tenant who filed one of the largest class-action lawsuits against RealPage, told the Journal "But it could muddy the waters." . With over $1 million in dividends paid out last quarter and a growing selection of properties across various markets, Arrived offers an attractive alternative for investors seeking to build a diversified real estate portfolio. In October 2024, Arrived sold The Centennial, achieving a total return of 34.7% (11.2% average annual returns) for investors. Arrived aims to continue delivering similar value across our portfolio through careful market selection, attentive property management, and thoughtful timing in sales. Looking for fractional real estate investment opportunities? The features the latest offerings. Image: Shutterstock This article RealPage Is Under Fire For Its Rent Algorithm — But A GOP Tax Plan Could Protect The Company From Lawsuits And Local Bans originally appeared on
Wall Street Journal
28-05-2025
- Business
- Wall Street Journal
How Self-Driving Truck Startup TuSimple Siphoned Trade Secrets to China - Tech News Briefing
TuSimple shared with Beijing data on its best-in-class autonomous driving system. WSJ reporter Heather Somerville explains how it became an example of Washington's shortcomings in keeping critical technology in the U.S. Plus: Rental-data company RealPage is clashing with state and local governments over its algorithmic pricing systems for apartments. WSJ reporter Rebecca Picciotto tells us why the GOP tax bill could provide relief for the company. Full Transcript This transcript was prepared by a transcription service. This version may not be in its final form and may be updated. Victoria Craig: Hey, TNB listeners, before we get started, heads up. We're going to be asking you a question at the top of each show for the next few weeks. Our goal here at Tech News Briefing is to keep you updated with the latest headlines and trends on all things tech. Now we want to know more about you, what you like about the show, and what more you'd like to hear from us. So, our question this week is, how often do you want new episodes, and how long do you want them to be? Do you want shorter shows more often or longer shows less frequently? If you're listening on Spotify, look for our poll under the episode description, or you can send us an email to tnb@ Now on to the show. Welcome to Tech News Briefing. It's Wednesday, May 28th. I'm Victoria Craig for The Wall Street Journal. Finding an affordable apartment in a big city can be like spotting a needle in a haystack. But what happens when you add in artificial intelligence, algorithmic pricing systems, even legal battles? Then, one of America's biggest self-driving truck startups shared sensitive data with China. We'll tell you how that's shaping the Trump administration's foreign investment rules. But first, using AI to crunch confidential data to set apartment rental prices has become a controversial topic in cities from Philadelphia to San Francisco. It's even led to dozens of lawsuits. But the tax bill that cleared the US House last week could throw companies like RealPage a lifeline, as WSJ reporter Rebecca Picciotto has been finding out. Rebecca, before we get into that, just help us understand how companies like RealPage work. Rebecca Picciotto: Yes. RealPage is a software firm that has a bunch of data about rentals all across the US and compiles that data into an automated algorithm to show landlords how certain rental prices affect rental demand and, in doing so, offers suggestions to landlords on how to set their prices. Victoria Craig: And the real issue with this is the AI part of this whole equation, right? Rebecca Picciotto: Yes. So, federal, state, and private plaintiffs have accused RealPage's algorithm of using proprietary data and crunching all of those numbers to help landlords basically collude on prices, see how their competitors are pricing, and then increase their rents. RealPage denies any allegations of antitrust or consumer protection violations. They say that their pricing recommendations are just that, suggestions. And so landlords don't have to take them. And in turn, that doesn't qualify as price fixing or collusion. Victoria Craig: The tax bill that was passed by the House could actually throw a lifeline to RealPage. How would that work? Rebecca Picciotto: Yeah. Tucked away in what Trump is calling his Big, Beautiful Bill is a provision that House Republicans added to essentially ban state and local officials from regulating AI models and automated algorithms for 10 years. So, that would essentially gut some of the local and state efforts to ban rent-setting algorithms like RealPage across the US. Victoria Craig: And the thing is, when you read your story, it's a little bit whiplash-inducing because there are all kinds of lawsuits that are already going on in local jurisdictions. This House bill could help RealPage, but then also state and local governments have plans in the works to fight back against what that bill may do. So, how does all that work? What kind of efforts are these local jurisdictions preparing for? Rebecca Picciotto: The House provision specifically will make unenforceable the local ordinances banning RealPage. But the provision likely will not affect ongoing lawsuits based on antitrust and consumer protection violations that are against RealPage. So RealPage is facing up to $73 billion in monetary damages across those lawsuits, and that will still be fair game even if the provision is passed. That said, local and state officials' first line of defense would be to sue the federal government if this tax provision is passed. And another consequence might be that if officials can't regulate rent-setting algorithms like RealPage, they'll turn to other tenant protection laws like upping rent control and leaning harder into other means of tenant protection. Victoria Craig: And what does this mean for the future viability of RealPage's business and its ability to continue operating? Because you mentioned some of those lawsuits and the damages that it could cause for the company. Rebecca Picciotto: Yeah. They're facing monetary damages. The DOJ wants to specifically adjust how RealPage's algorithm functions. Some landlords are already trying to create their own internal data systems away from RealPage. I spoke to one landlord who said that everyone he knows is scared to use RealPage. So, it's already affecting the business. That said, RealPage could definitely breathe a sigh of relief if they're able to function in markets that they've been essentially banned from. Victoria Craig: That was Rebecca Picciotto, who covers the residential rental market and housing policy for The Journal. Coming up, a US-based company shared its best-in-class autonomous driving system with China and became an example of Washington's shortcomings in keeping hold of critical technologies. We'll delve into some exclusive WSJ reporting after the break. In 2021, the San Diego-based company TuSimple set a record when its truck traveled 80 miles in Arizona without a human driver. But within a couple of years, the company voluntarily shut down its US operations, auctioned off its trucks, and delisted from the Nasdaq. WSJ reporter Heather Somerville has obtained exclusive details that show TuSimple siphoned trade secrets to Chinese companies, becoming the poster child for Washington's shortcomings in trying to keep critical tech and know-how in America. Heather, you spoke to former employees, and you've reviewed hundreds of pages of documents about how that transfer happened. Just walk us through the scale of what you found. Heather Somerville: TuSimple shared with Chinese companies what amounted to a full autonomous driving stack. This included the source code that would be effectively the brains of an autonomous truck, as well as numerous aspects of the design, the hardware, the integration of all of these systems. It's pretty difficult to just sort of slap an autonomous driving system onto a truck and make it work. All of these parts have to work together. You need a truck that is designed to accept a self-driving system. And so, in this data that TuSimple transferred included all of these components for this Chinese trucking company called FOTON to build a self-driving truck using TuSimple's autonomous system, which was developed by engineers in the United States. Victoria Craig: Now, TuSimple did sign a national security agreement with the US government at one point. What did that mean for its ability to share information with Chinese companies? Heather Somerville: That agreement, which was signed in February 2022, required that TuSimple separate its business and all its technology from China-based employees and China partners with a variety of firewalls and governance controls. It was also required not to share any intellectual property, such as source code. This was enforced by the Committee on Foreign Investment in the United States, or CFIUS, which is an interagency national security panel. But it was just about a week after signing that agreement that TuSimple transferred a trove of data to a Beijing-owned firm. And what we reviewed in documents is that the sharing of technology continued between when TuSimple signed the national security agreement and its deadline to comply with that agreement six months later. Victoria Craig: And what's been the response from TuSimple to your reporting? Heather Somerville: TuSimple co-founder Xiaodi Hou, who left TuSimple in 2023, told us that no information prohibited by the company's national security agreement was ever shared with anyone. A CFIUS investigation ultimately determined that TuSimple's technology sharing hadn't violated the national security agreement, but it did fine the company for other infractions. That's according to a person familiar with the events. TuSimple ended up paying $6 million in a settlement to CFIUS without admitting fault. Victoria Craig: And you point out in your story that company leadership was referred to the Justice Department for possible theft of trade secrets and espionage charges. The FBI, the SEC, the Commerce Department also all opened their own investigations. What came of all of these probes into the company and its dealings? Heather Somerville: Not very much. Many of the sources I spoke to, who are aware of what TuSimple did and have worked deeply on national security issues, are both flummoxed and really mad that things have played out this way. And ultimately, what we know so far is that the company paid $6 million to CFIUS for certain infractions. We don't know the precise status of other investigations, but when it effectively dissolved, its leadership moved on to do other things. One of the co-founders has another self-driving trucking company operating in Texas with Chinese investment. And other leaders have moved over to China where they're building an AI for animation company. Victoria Craig: Heather, the US considers autonomous vehicle technology as a matter of national security importance. And this whole story has really frustrated current and former government officials, as you point out in your story, because it's shown the weakness of US laws that are in place. So, what has the US government done to try to close some of those loopholes, can we call them, or problems in the laws? Heather Somerville: It is top of mind for a lot of people in the Trump administration. Technology is integral to US national security because it's important to our competition with China, it's important to our economic security. And we have this realm of export controls which tell companies they can't share or sell their technology to places like China. And we have this huge array of other technology that isn't really covered by laws or regulation, we know it's important. Autonomous driving is one of these technologies. And a couple of things that are happening right now is there is an office inside of the Commerce Department that was set up actually under the first Trump administration that has taken a much more aggressive approach to outright prohibiting Chinese technology from certain companies or certain types of technology that comes from China from being sold in the United States. Victoria Craig: That was WSJ reporter Heather Somerville. And that's it for Tech News Briefing. Today's show was produced by Julie Chang with deputy editor Chris Zinsli. I'm Victoria Craig for The Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.
