Algorithmic rent-setting practices have been under scrutiny for several years, but the recent settlement between Greystar and the State of California has brought the issue to the forefront for Los Angeles multifamily owners. With regulators examining how large operators used RealPage’s revenue management software, the case is forcing owners, investors, and lenders to reassess how rents are set, how data is used, and where future regulatory pressure may go. For a market as constrained and price sensitive as Los Angeles, the implications are significant.
Source: Los Angeles Times

What the Greystar Settlement Actually Covers

According to reporting from the Los Angeles Times, California’s attorney general alleged that Greystar and other large operators relied on RealPage’s software in a way that allowed landlords to share nonpublic rental data. Regulators argue that this reduced price competition and contributed to upward pressure on rents across multiple Southern California submarkets.

As part of the settlement, Greystar agreed to:
• Stop using RealPage or any rent-setting software that relies on competitor data
• Cooperate with federal authorities in the ongoing investigation
• Pay penalties across nine states

The U.S. Department of Justice has filed a related federal case outlining how RealPage used confidential information to recommend rental pricing strategies across competing properties.
Source: U.S. Department of Justice
https://www.justice.gov

Why Los Angeles Multifamily Rent Pricing Is Under the Microscope

Southern California was one of the regions where RealPage’s revenue management tools were most widely used. Regulators argue that the software contributed to uniform pricing behavior across competing buildings and reduced incentives to offer concessions or adjust rents based on submarket conditions.
Source: Los Angeles Times

For the Los Angeles multifamily market, the effects may include:
• Greater variation in rent growth between buildings
• A return of concessions in slower leasing periods
• Recalibration of underwriting that assumed algorithm-driven rent increases
• Increased scrutiny from lenders who want documentation of independent pricing decisions

These shifts create operational pressure at a time when owners are already navigating regulatory changes, rising insurance costs, and a development pipeline that continues to slow.

How Owners and Investors Should Respond Now

The settlement does not outlaw revenue management software altogether, but it does limit tools that rely on pooled, nonpublic competitor data. Owners should review how their pricing systems work and ensure their management teams can demonstrate independent judgment in setting rents.

Key questions include:
• What pricing software is currently used, and what data powers it
• Whether on-site teams regularly override automated recommendations
• How conservative future rent forecasts may need to become
• Whether pricing practices introduce compliance or reputational risk

These steps are increasingly important as regulators focus more closely on how rental rates are determined and whether those practices support competitive market behavior.

Conclusion

The Greystar settlement marks a significant shift in how regulators evaluate rent-setting tools and how operators use market data. For Los Angeles multifamily owners, the case reinforces that pricing strategy is no longer only an operational consideration. It touches compliance, underwriting, and investor expectations.

As attention increases around Los Angeles multifamily rent pricing, owners who maintain transparent processes, document decisions, and understand the data behind their pricing models will be better positioned to adapt. The regulatory environment is evolving, and staying ahead of these changes will be essential for long-term portfolio stability.