U.S. Senators Ruben Gallego, Elizabeth Warren, and 13 other Democratic senators sent a letter to U.S. Defense Department Secretary Pete Hegseth, requesting an investigation into RealPage for algorithmically increasing rents based on tenants’ military status.
Military leaders have previously alerted officials that service members’ rent increases when their housing allowances go up. A 2022 study by economists at Old Dominion University revealed that landlords tend to raise rents in response to pay raises that service members receive when promoted to higher ranks. As a result, these rent increases effectively negate any rise in their take-home income.
The Defense Department has not yet responded to the senators’ request, and it remains unclear whether any action will be taken or if current investigations by other federal agencies will proceed under the Trump administration. During former President Joe Biden’s administration, the U.S. Justice Department’s investigation resulted in FBI raids on certain corporate landlords involved in rental price gouging. Additionally, attorneys general in several states collaborated to build a stronger nationwide case against this practice.
Understanding BAH and How It Plays a Role in the Lawsuit
“In fiscal year 2023, the Department of Defense (DoD) spent $24 billion on Basic Allowance for Housing (BAH). However, there are long-standing concerns that landlords are increasing rents to take advantage of these BAH increases. In 2022, the DoD raised the BAH for 28 military housing areas where rental costs surged by an average of over 20 percent. A lawsuit filed by the Department of Justice (DOJ) and state attorneys general claims that RealPage played a role in driving up rental costs in several of these areas, including San Diego, Wilmington, and Houston.”
Arizona Attorney General Kris Mayes, who announced her lawsuit against RealPage last February, explained to The Copper Courier that she deliberately decided not to align her efforts with the federal investigations into RealPage. She anticipated that President Donald Trump could stop those federal actions.
“One of the reasons that I have started to—shall we say, diversify our antitrust portfolio by filing some of these cases in state court is because we didn’t know for sure who was going to win the election,” Mayes said. “We will continue to bring antitrust cases—with or without them.”
Mayes case against RealPage is still in the pretrial phase, with trial dates expected later this year.
“Our military families already sacrifice so much to serve our nation, often having to relocate every few years,” Gallego said. “It is vital we ensure RealPage’s algorithm is not used to price gouge military families. ”More information can be found here.
