In January 2025, the U.S. Department of Justice sued six of the nation’s largest landlords, accusing them of using algorithmic pricing tools to artificially inflate apartment rents. The lawsuit argues that these companies—massive real estate holders managing over 1.3 million units—coordinated their rental pricing, using software developed by RealPage Inc. to exchange sensitive data and suppress competition in housing markets across 43 states.
This isn’t just about one piece of software. It’s about scale, structure, and a system that increasingly treats homes like stocks.
The lawsuit reveals a problem that goes deeper than bad behavior: The U.S. housing market is entangled with the financial system. We have been trained to see rising rents and home values as a sign of economic strength, but when those increases are the result of artificial manipulation rather than organic demand, that “growth” is an illusion. It’s profit without production — return without value.
The ripple effects of this entanglement are easy to see. High rents drive displacement. They prevent people from saving, starting families, or owning homes. They drain local economies. Yet, investors don’t consider these effects when making decisions. They are investing in a financial product, not in shelter. Their focus is on whether their fund continues to grow.
Our Planning Systems Are Complicit
The worst part? Our local planning systems often enable this kind of behavior. Barriers to approving new housing, such as lengthy permitting processes and zoning restrictions, don’t affect large institutional developers as much as they do small-scale builders. In this way, the system favors large-scale developments while making it difficult or impossible for incremental growth to occur.
At Strong Towns, we call this the bias toward bigness. The DOJ lawsuit shows what happens when bigness takes full control: manipulation, coordination, and the kind of market distortion that makes everyday life unaffordable for millions.
What Now?
We have to change how we treat housing. It’s not a speculative financial instrument but an essential piece of infrastructure for a healthy community. That means supporting policies and reforms that empower small-scale development, remove artificial barriers, and restore competition to local housing markets.
This court case may be about a pricing scheme that harms renters, but that is just the tip of the iceberg. If we want a housing system that actually meets people’s needs at prices they can afford, we need to address the root causes of the housing crisis.
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Previously Published on strongtowns.org with Creative Commons License
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