If you’ve been reading about America’s rental housing crisis lately, there’s one company you may have seen frequently quoted in the press: RealPage.
The property management software company is regularly cited by the media as a credible source of data and analysis on the rental housing crisis. Many of these quotes come courtesy of RealPage’s chief economist Jay Parsons, a former Dallas Morning News reporter who has quickly become the media’s go-to “explain the rent numbers” guy. Though rental growth numbers may fluctuate month-to-month, RealPage and Parsons’ take is fairly consistent: the rental crisis isn’t that bad – but rent control is the worst policy ever, and we should always let developers and landlords do whatever they want. (We’re obliged to point out that just the opposite is true – rents and evictions remain much higher than they were pre-pandemic, empirical studies show that rent control improves affordability without constraining supply, and greedy developers and speculators are the reason we’re in this mess).
Here’s a smattering of RealPage’s recent news appearances:
- CNBC, 3/15/23: “There are various surveys of economists. One done by IMG showed that only 2% thought that rent controls in places like New York and San Francisco were having a positive impact on affordable housing,” said Jay Parsons, chief economist at RealPage.
- Marketplace, 3/29/23: Jay Parsons, chief economist at the real estate analytics company RealPage, says rents have only grown 4.5% in the time since. “So rent growth for the new lease renters is about a third of what it was the same time last year,” he said. Parsons said a big reason for the slowdown is that apartment construction is booming.
- Business Insider, 6/25/23: “Rental growth in the US is now below pre-COVID norms, Jay Parsons, the SVP, chief economist, and head of industry principals at RealPage, told Insider. “We’re starting to see all of these units under construction be completed,” Parsons said. “All of that new product is giving renters a lot more options — it’s also forcing property managers to compete with each other.” The dynamic has led to a “predestined down ramp” for inflation, he said.”
- HousingWire, 7/13/23: A year ago, most of the nation’s 150 largest markets were seeing asking rent growth north of 6% but in June only 18 were, noted Jay Parsons, rental housing economist at RealPage. “And it’s definitely not the institutionally favored markets right now,” he said in a LinkedIn post. “The list is dominated by a mix of a) college towns, b) energy markets, and c) metros in the Northeast or Midwest.”
- GlobeSt, 8/8/23: “Rent growth declined to below 1% last month, only the second time since the 2010 Great Recession. And it could head down further in the next few months, according to a post by RealPage Chief Economist Jay Parsons. But he expects the rent growth slowdown to level off relatively soon.”
- Dallas Morning News, 8/11/23: “Asking rent growth continued to trend way downward in July — dropping below 1% for only the second time since the great financial crisis and setting up a potential drop into negative territory sometime in the next couple months,” said Jay Parsons, top economist for Richardson-based RealPage.
There’s just one small problem. RealPage isn’t an independent observer of the rental housing crisis – they’re one of the primary perpetrators of it.
Media Pretends RealPage Scandal Didn’t Happen
In October, ProPublica published a bombshell report detailing how RealPage’s Yieldstar algorithmic rent-setting software has enabled a nationwide cartel of corporate landlords to orchestrate exorbitant rent hikes over the past two decades – a potential violation of federal antitrust laws. RealPage’s clients include massive corporate landlords like Greystar, Camden Property Trust, and Crow Holdings (the family real estate firm of Harlan Crow, one of the early progenitors of RealPage itself). A rave review from Kortney Balas, an executive at YieldStar client JVM Realty, is featured on RealPage’s website: “The beauty of YieldStar is that it pushes you to go places that you wouldn’t have gone if you weren’t using it.”
According to ProPublica, RealPage’s top executives have openly pitched Yieldstar to corporate landlords who want to charge the highest rents possible, but fear losing their competitive standing in the rental market if they do it alone. Media darling Jay Parsons (who did not provide comment for ProPublica’s piece) was one of those executives.
ProPublica’s reporting has quickly landed RealPage in hot water. Several Democratic Senators – from progressives like Bernie Sanders to moderates like Dick Durbin – have called for a sweeping regulatory probe of RealPage. Last November, the DOJ’s Antitrust Division obliged by opening an investigation into whether Yieldstar illegally facilitates collusion among landlords. Since the YieldStar scandal broke, RealPage and its clients have also been named in over 30 tenant lawsuits. It’s worth noting that running afoul of the law is nothing new for RealPage: in 2018, the company paid a $3 million fine to the Federal Trade Commission for failing to ensure its tenant screening reports were accurate, causing some potential renters (disproportionately people of color) to be falsely associated with criminal records and turned down by landlords.
Curiously, you won’t find any of this information mentioned in the articles we highlighted at the top of this newsletter. Absent from every single one of those stories (and many others that cite RealPage and Parsons), is any mention of the YieldStar scandal, DOJ investigation, or lawsuits filed against RealPage for facilitating an illegal rent-gouging scheme. By omitting this vital information from their reporting, media outlets aren’t just running cover for some of the worst rent-gougers in America. They’re actively misleading their readers by presenting landlord-funded talking points as the fact-based findings of independent “experts”, rather than the self-interested conclusions of the very people profiting off of the rental housing crisis.
Survey Says… Everything’s Fine, Nothing To See Here
For an example of how transparently self-serving RealPage’s “market analysis” is, take their new Survey on Multifamily Rental Trends. Unveiled earlier this month at their annual RealWorld conference (a three-day landlord confab held in one of Vegas’ finest five-star resorts), the survey has an eyebrow-raising topline that reporters have latched onto: “Renters Are Mostly Happy With Their Situations, Especially Gen Z”.
We’ll pause for laughter.
According to the full survey published by RealPage, 66% of multifamily renters – including 51% of Gen Z renters – are “satisfied with their current housing situation, preferring the financial freedom afforded by being able to rent more cheaply than buy in the areas where they want to live, as well as the flexibility for remote work and trying new locations.”
Off the bat, there are several issues with the survey’s design. RealPage has conveniently left out several important details regarding the survey’s methodology: the exact questions that were asked (biased framing can skew participants’ responses), answer type (whether a question is Yes/No, multiple choice, or open response can provide wildly different responses), and how respondents were selected. Though RealPage claims their survey sample was representative of metrics like age, income, and geographic location, they do not say whether they controlled for race or ethnicity. This is a huge potential source of bias, as Black and Brown renters and immigrants experience housing insecurity at far higher rates than white renters. The same goes for trans or gender non-conforming people, who could have been left out of a survey that “equally surveyed male and female renters”.
RealPage drew a number of questionable conclusions from respondents’ answers, attributing cause-and-effect relationships to unrelated variables while failing to mention other factors (say, low consumer savings or high consumer debt) that could explain or influence the trends found in the survey. Consider the following “findings”:
- “73% of renters say they are renting in areas where they couldn’t afford to buy- showing that apartments help diversify preferred neighborhoods.”
- 66% of renters are satisfied with their current overall renting situation, with younger renters showing the highest satisfaction rates.
- 44% of American renters think renting is a smarter financial move than buying a house, with Gen Z renters leading the demographics at 51%.
- 48% of American renters say renting their home gives them financial freedom.
Without further context on the exact questions respondents were asked, these toplines are at best meaningless, and at worst nefariously misleading. Just because the majority of respondents say they rent in an area where they couldn’t afford to buy does not mean that apartments help to diversify preferred neighborhoods. In fact, it raises the question of why homeownership is so unattainable for most Americans (the answer may have something to do with private equity’s takeover of both the rental and homeownership markets!). What are renters “satisfied” in comparison to? Are they expressing an absolute appreciation for the generosity of landlords, or are they relieved they can narrowly afford an apartment and stay off the streets (until the landlord decides to jack up the rent)? How do renters define “financial freedom” and “smart financial moves”, and to what extent do high costs of living and personal debt combined with low savings and stagnant wages influence their decision-making?
It is telling that none of the survey’s questions get to the root problem of affordability. Nowhere in the survey are respondents asked what their monthly rent is, whether they think current rents are too high or low, or how the rising cost of rent factors into their “satisfaction” ratings. This survey is merely RealPage’s last-ditch effort to save face under the crushing weight of a DOJ investigation and 30 class-action lawsuits. The company’s direct participation in a rent-gouging scheme should demonstrate that it does not actually give a damn about “renter satisfaction.”
In a quote from the survey’s press release, Jay Parsons sums it up like this: “The research tells us that most apartment renters are happy being apartment renters.”
He might as well have quoted Leslie Nielsen: “Nothing to see here, please disperse.”
Letter To The Editors: Tell Readers The Whole Truth
It’s not hard to imagine that readers would view Jay Parsons as a far less credible source if they were told about the YieldStar scandal in the same articles that quote him. After all, the rent-gouging corporations whose massive profits would be threatened by rent regulations are his firm’s clients!
We have some first-hand evidence that can attest to this: when we recently replied to one of Jay Parsons’ Twitter threads with excerpts from ProPublica’s RealPage reporting, Parsons blocked us within seconds. His response speaks volumes: Jay understands better than anyone how much the YieldStar scandal threatens his credibility and brand as an “independent housing expert”, which is why he never wants to talk about it.
It’s clear that Parsons can’t handle the truth, but that doesn’t mean the media should be complicit in his cowardice. We at the Revolving Door Project have decided that enough is enough: housing reporters must be honest with their readers. This month, we sent a letter to the editors-in-chief of major media outlets calling on them to stop uncritically quoting RealPage and its executives in their rental housing coverage. You can read more about the letter in an article published this morning by the American Prospect’s Jarod Facundo.
As Jarod writes:
“A letter co-authored by the Revolving Door Project, National Housing Law Project, Liberation in a Generation, and Fairness & Accuracy in Reporting takes aim at several business news organizations that have uncritically cited RealPage and its senior staff as neutral housing experts. The media outlets include CNBC, Marketplace, Business Insider, GlobeSt, and HousingWire. […] The housing issues that media outlets consider RealPage as qualified experts to weigh in on include ‘rent prices, rent inflation, the current decline in rent market growth, housing construction, issues around multifamily housing construction, and rent control.’ The Revolving Door Project and the others are taking the stance that RealPage’s practices and its ongoing investigation by the Justice Department should be acknowledged when the company’s representatives weigh in on housing issues across the media.”
While we are hopeful that the mainstream press will heed our advice and change their ways, the same cannot be said for RealPage itself. Despite facing sprawling legal fallout from Yieldstar, RealPage recently announced another algorithmic rent-setting tool that greedy landlords are sure to flock to: Demandx. RealPage claims that this new AI-powered property management software will “reinvent the way operators harness and solve for demand for the multifamily industry” and “help property managers spend smarter, lease faster, and price right”. The launch customer for this new tool is none other than Yieldstar superfan JVM Realty.
Given RealPage’s track record, we imagine it won’t be long until Demandx lands the company under another federal investigation. In the meantime, journalists shouldn’t let the company continue to launder its reputation by giving its slick-talking executives more opportunities for self-serving softball quotes. And instead of elevating RealPage executives as the “experts” on housing policy, media outlets should actively seek opportunities to amplify the voices of those most impacted by the housing crisis— tenants themselves. Who better to quote as a rental housing subject matter expert than someone who’s lived through the issue and has a much more honest sense of the benefits of rent regulation and tenant protections? As the Homes Guarantee campaign often puts it, “Those closest to the problems are also closest to the solutions.”
The mainstream media ought to provide their readers with a well-rounded, transparent, and honest accounting of the facts – especially when it comes to something as vital to our lives as housing. The best way to do that is to stop quoting RealPage.