AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman.

We look now at how high rent and housing costs are shaping up to be a key issue in these November elections here in the United States. On the campaign trail, Democratic presidential nominee Vice President Kamala Harris has criticized landlords’ use of price-setting software to drive rent up. This is Harris in in Raleigh, North Carolina, last week.

VICE PRESIDENT KAMALA HARRIS: Some corporate landlords collude with each other to set artificially high rental prices, often using algorithms and price-fixing software to do it. It’s anti-competitive, and it drives up costs. I will fight for a law that cracks down on these practices.

AMY GOODMAN: This comes as the Department of Justice has filed a major lawsuit against a software company called RealPage, alleging it enabled price fixing by landlords on rent prices nationwide. Attorney General Merrick Garland announced the antitrust lawsuit.

ATTORNEY GENERAL MERRICK GARLAND: When the Sherman Act was passed, an anti-competitive scheme might have looked like robber barons shaking hands at a secret meeting. Today, it looks like landlords using mathematical algorithms to align their rents.

AMY GOODMAN: In a minute, we’ll be joined by the ProPublica reporter whose investigation into RealPage in 2022 helped lead to the DOJ’s lawsuit. The explosive report quotes from a video in which RealPage executives boast about their software that uses an algorithm to help landlords push the highest possible rents on tenants. In this clip from the video, RealPage executives Andrew Bowen and David Polewchak speak with RealPage Vice President Jay Parsons in 2021.

JAY PARSONS: We are seeing unprecedented rent growth, 14.5% growth, lease over lease, on new leases. Never before have we seen these numbers. So, Andrew, I’ll start with you. What is the role of revenue management in some of the price growth we’re seeing right now?

ANDREW BOWEN: Well, I think it’s — I think it’s driving it, quite honestly, because when you think about, as a property manager, very few of us would be willing to actually raise rents double digit within a single month by doing it manually. So, that opportunity to actually review price systemically on a day-to-day basis with optimized rents is what’s driving that growth, in my opinion.

DAVID POLEWCHAK: Yeah, I think it’s challenging operators to new heights that they haven’t been at before, and really looking out where they can get, and beyond expectations that they had ever thought of before.

JAY PARSONS: Yeah, it’s interesting. When we talk to our clients here, they’re saying the same thing. It’s they wouldn’t be at those numbers without revenue management. So, definitely interesting.

AMY GOODMAN: Those are executives with RealPage, the company sued by the Department of Justice Friday.

For more, we’re joined by two guests. In Kansas City, Tara Raghuveer is with us, an organizer with KC Tenants, KC Tenants Power and the newly launched Tenant Union Federation, the first major national effort at tenant organizing in 40 years. Also with us is ProPublica reporter Heather Vogell. Her major 2022 investigation was headlined “Rent Going Up? One Company’s Algorithm Could Be Why.”

Your report really led to this Department of Justice lawsuit, Heather. Why don’t you lay out for us what RealPage is? And explain exactly what this algorithm does.

HEATHER VOGELL: Sure. Thanks so much for having me on, Amy.

So, what RealPage is is a Texas tech company that makes a variety of software to support landlords, but among that suite of software is one that focuses on helping landlords set rent prices and figure out what the optimal price is for rent. And what’s controversial here about this software — because we have lots of software that is helpful in so many different ways these days — but what sets this apart is that the way it works is that the clients of RealPage all feed their own proprietary data into a data warehouse which collects that information, and then that assists the algorithm — that information is part of what the algorithm draws on when it sets those rents.

So, if you have a lot of landlords that are using the same algorithm in a neighborhood, they’re kind of all drawing on the same data source in order to get the recommendations. And both what — you know, some of the statements that those landlords have made that we have seen and also that the DOJ has collected suggests that they all see it as a way to have a rising tide that lifts all boats. So, the idea is that if we all raise rents at the same time or we all keep our rents up when we have a downturn, then, you know, we’ll all make more money, versus competing against each other and having somebody offer a special deal that drives everybody else to reduce their rents a bit because they’re losing business. It’s this idea of if we all kind of band together and stick with the software, we can increase rents together and all make more money. And that’s the case that the DOJ is making.

AMY GOODMAN: So, RealPage claims landlords can reject the price recommendations that are generated by its software, Heather.

HEATHER VOGELL: Right. Right, they do say that. What DOJ found and — well, first, I’ll say, one of the things that DOJ found was that there’s an auto-accept feature in the software that allows a landlord to accept the suggestion without debate internally on the side of the landlord, that they just can sort of auto-accept it. And what DOJ said was that effectively allows RealPage to just go ahead and directly set the rent.

And then, secondly, I’ll say that people said to me, you know, during my reporting, and as well as, you know, this was something that DOJ found, as well, that it’s not always easy, depending on the landlord, for a leasing agent on the ground to reject those recommendations. There can be bureaucratic steps. There can be approvals that they need to get, either from within their company or from RealPage itself and their pricing advisers. And so, they kind of create, according to the way DOJ sees it, a series of hurdles that makes it harder to reject than to accept those suggestions. And the way DOJ frames that is that that is a way to basically police this cartel-like behavior.

AMY GOODMAN: YieldStar and RealPage merged. You write, “One of YieldStar’s main architects was a business executive who had personal experience with an antitrust prosecution. A genial, self-described 'numbers nerd,' Jeffrey Roper was Alaska Airlines’ director of revenue management when it and other major airlines began developing price-setting software in the 1980s.” Tell us more about Roper’s role at RealPage.

HEATHER VOGELL: Well, you know, he was there early on developing, and he left a number of years ago, so he’s more of a founder. But, you know, he was willing to sort of describe what the driving forces were that they were trying to — you know, that were basically driving the efforts early on. And that was kind of illuminating, because one of them was this idea of making pricing more uniform, predictable, and essentially taking it out of the hands of the leasing agents, who he said were often peers of the people who were trying to rent. And he said, you know, the goal was to take pricing off state — I’m sorry, offsite, because there was too much empathy going on. And so, that gives you just an idea of what sort of the view was from the landlord-owner side of things in terms of what they were looking for in this software.

And also, you know, he said that, to me, that if you have a — I think it was like, if you have a bunch of idiots undervaluing the system, that it costs everyone, that this was a view that he had while he was helping develop this software. He did tell me that he did have antitrust concerns in his mind while he was developing the software and did try to avoid anything that would create a sort of collusive situation.

AMY GOODMAN: Give us one example, Seattle, and talk about how RealPage actually works.

HEATHER VOGELL: Yeah, sure. I was so surprised by this. So, we found a neighborhood in Seattle, and we were able to get a list of all the property managers who were in these bigger buildings, because that is really, you know, where the software is used most frequently. So, we’re talking about, like, big buildings, more than five units. And what we found was that, first of all, it really reflected some other reporting I’ve done on how consolidated this industry has become in terms of the property managers and the owners, because 70% of all the multifamily — these big apartment buildings were overseen by just 10 property managers. So, it’s thousands of units. And then, when we looked into those 10, they were all big property managers, and every single one of them, we could confirm that they were using the pricing software sold by RealPage in at least some of their buildings. So, it gives you an idea of what can happen. And again, we only did these top 10. We didn’t look at every landlord in the neighborhood, so we didn’t — we couldn’t — it could be more that were using RealPage, a higher percentage potentially.

AMY GOODMAN: Let me bring in Tara Raghuveer, organizer with KC Tenants — KC, Kansas City — KC Tenants Power and the newly launched Tenant Union Federation, the first major national effort at tenant organizing in 40 years. Can you talk about the DOJ lawsuit against RealPage and also, overall, Kamala Harris’s plan for U.S. housing, which includes cracking down on abusive landlords?

TARA RAGHUVEER: Thanks for having me, Amy. Absolutely.

I think Merrick Garland, the attorney general, said it best the other day in a press conference about RealPage. He said, “Everybody knows the rent is too damn high. And we allege that this is one of the reasons why.”

And I think it’s important to note that RealPage is a perpetrator of some of the grossest, most extractive business practices that we’ve seen in recent years, but RealPage is also not alone, right? For so much of the market which is a catastrophic failure, landlords’ business model is predicated on tenants’ instability. The rent is too damn high. And the rent is not based on the quality or condition of our homes; it’s based on whatever the market will allow. And that market is orchestrated by the people who want to make more and more money off of our basic need for a home.

So, speaking about national politics, rent has emerged as one of the critical economic issues this year during election season, and that’s well overdue, right? Rent is the biggest bill that most poor and working-class people pay every year. Twenty-two million households pay over 30% of their income in rent. And we’re also talking about a time in the richest country in the history of the world where 650,000 people are sleeping outside. So, it’s high time that national politics paid attention to this issue. And Vice President Harris and former President Trump have started to be forced to talk about housing in a big way. They both have plans that speak to some of the scale and breadth of the crisis. And tenants need to see a lot more. Vice President Harris started talking about rent caps, which is great, and for right now it’s just messaging, and tenants are desperate to see material action.

AMY GOODMAN: During her first major campaign rally in Atlanta, Harris pledged, quote, “take on corporate landlords and cap unfair rent increases.” Can you talk about what this would mean for the kind of organizing you’re doing in Kansas City and around the country in your newly launched Tenant Union Federation, Tara?

TARA RAGHUVEER: A regulatory agenda that takes seriously the disproportionate power that landlords and property managers have over our lives is well overdue, right? Heather describes this in her reporting. The RealPage lawsuit is one example of this kind of anti-competitive, violent, extractive behavior in the market. And what we really need is for the federal government to intervene. Until this point, the federal government has not intervened to protect tenants. In fact, the government has been an enabler of some of the worst business practices. The government backs financing to the tune of $150 billion every year through Fannie Mae and Freddie Mac. They issue government-backed loans to landlords across the country, and some of those same landlords are the landlords participating in these price-fixing schemes.

So, we need a regulatory agenda. This is not a problem that will be solved by simply building more housing, as the RealPage executives and a bunch of other sort of mainstream economists might suggest. And that regulatory agenda has to include tenant protections. It has to include rent caps. So, Vice President Harris and current President Biden have been talking about rent caps. And as I said, that’s a good thing. The thing that they’re talking about, though, is simply a directive to Congress, and it’s tied to a tax benefit that landlords [inaudible] —

AMY GOODMAN: We have 15 seconds.

TARA RAGHUVEER: So, what we want to see is more assertive, proactive regulatory action from the executive branch and from the Federal Housing Finance Agency.

AMY GOODMAN: Tara Raghuveer, we want to thank you for being with us — we’ll certainly stay on this — with KC Tenants and the newly launched Tenant Union Federation. And thank you to Heather Vogell, ProPublica reporter. We’re going to link to your 2022 report, “Rent Going Up? One Company’s Algorithm Could Be Why.” And we’re going to have you back on to talk about the baby formula shortage and what the U.S. government can do about it. I’m Amy Goodman. Thanks so much for joining us.