The Scapegoats for Rising Multifamily Rents

RealPage is a widely used algorithm-based program that helps multifamily landlords determine individual apartment rents. There is an ongoing lawsuit against RealPage and landlords that claims they colluded, leading to higher multifamily rents. Multifamily rental rates have increased 20% in most markets since the beginning of the pandemic. RealPage is an advancement in how landlords determine rates, but they are the scapegoat, not the actual problem. The real blame lies with inflation and the pandemic for higher rates. How do you sue when the fault is so macro? You don't, but you look for the next best option.

STR has been providing data for decades to the hospitality industry. Although they anonymized the data, they are actually contacting hotels to get room rates, occupancies and ADR. There is no doubt that STR data helps hotel owners to make better decisions to increase NOI.

The difference between multifamily and hotels is that one is required for survival and the other is discretionary. The most recent RealPage data for landlords suggests that the rental rates should decrease as pressures on renters from inflation are having an impact on demand.

RealPage works both ways. Self storage fits in the “discretionary” box even though Americans deem it mandatory. I don't see self storage in the same position as multifamily with legal and political pressure to keep rental rates in check.