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Home My WebLink About07-28-26 Public Comment - J. Pape - An actionable item regarding rent affordability in Bozeman...From:Mike Maas To:Bozeman Public Comment Subject:Fwd: [EXTERNAL]An actionable item regarding rent affordability in Bozeman... Date:Tuesday, July 28, 2026 7:20:42 AM Attachments:realpage MT.pdf Sent from my iPhone Begin forwarded message: From: Jerry Pape <jerry@triplecreek.com>Date: July 27, 2026 at 7:17:45 PM MDTTo: Mike Maas <Mike.Maas@bozemanmt.gov>Subject: [EXTERNAL]An actionable item regarding rent affordability inBozeman... CAUTION: This email originated from outside of the organization. Do not clicklinks or open attachments unless you recognize the sender and know the content issafe. Bozeman Commissioners, You will find attached a brief on algorithmic rent setting (RealPage andother services like them) and actions taken by the Federal Governmentand the City and County of San Francisco against this illegal pricefixing. This is a gravely serious matter, as this type of software isbeing used in Bozeman also. Keep in mind that solely banning a tool isthe wrong approach and San Francisco made this mistake. You must ban thetool and the behavior to have any meaningful positive impact. Jerry Pape --Jerry Pape, Supervising BrokerTriple Creek Realty of Bozemanwww.triplecreek.com(406) 579-3636 Algorithmic Rent-Setting Software: The RealPage Antitrust Matter A Brieﬁng for the Bozeman City Commission Prepared: July 26, 2026 Subject: Federal antitrust action against RealPage, Inc. and affiliated landlords; San Francisco's municipal ban on algorithmic rent-setting software; the federal settlement structure; and the structural reason a tool ban alone does not reach the underlying conduct. 1. Summary Since August 2024, the U.S. Department of Justice ("DOJ") has pursued a federal antitrust action alleging that a shared pricing-software architecture allowed competing landlords to coordinate rent increases across millions of rental units nationally — a market structure relevant to any jurisdiction, including Gallatin County, in which large, professionally managed multifamily housing has entered the local rental stock. San Francisco responded with the ﬁrst municipal ban in the country on the use of such software; the federal government has separately resolved its claims through a settlement (and a series of individual landlord settlements, most recently on July 6, 2026) built on behavioral rather than structural remedies. The central policy ﬁnding, developed at the municipal level and relevant to any local government considering a comparable response, is that banning the software does not ban the coordinated pricing behavior it trained into an industry — a distinction with direct implications for how, or whether, a municipality should legislate in this space. 2. The Federal Action: Allegations, Mechanism, and Market Impact 2.1 The complaint The DOJ's Antitrust Division ﬁled suit against RealPage, Inc. on August 23, 2024, alleging violations of Sections 1 and 2 of the Sherman Act (U.S. Department of Justice, 2024). The original complaint was amended on January 7, 2025 to add six large property-management companies as co-defendants — collectively alleged to manage more than 1.3 million rental units across 43 states (MassLandlords, 2025). The action has since expanded through a rolling series of individual landlord settlements; most recently, the DOJ ﬁled a proposed consent decree on July 6, 2026 resolving its claims against Willow Bridge Property Company, LLC, one of the nation's largest apartment managers with over 240,000 units under management (Concurrences, 2026; Lawyer Monthly, 2026). 2.2 The training and behavioral mechanism alleged The government's complaint, read as a whole, describes a six-step architecture rather than a simple recommendation engine: 1. Education — RealPage trained landlord staff to limit concessions and discounts they would otherwise offer competitively, and hosted user groups in which nominally competing landlords discussed pricing methodology directly (Vogell, 2025). 2. Constrained discretion — the software was designed to make accepting an algorithmic price recommendation faster and easier than overriding it, routing overrides through justiﬁcation codes and defaulting toward acceptance. 3. Data aggregation — competing landlords contributed nonpublic, competitively sensitive rate and lease-term data into a shared pool from which the algorithm derived its recommendations — data no single landlord could otherwise see. 4. Daily guidance — the system issued price recommendations for new and renewal leases on a running basis. 5. Compliance enforcement — the system tracked which staff deviated from recommendations, ﬂagged high override rates for audit, and in some organizations tied compensation to adherence. 6. Alignment — the intended and alleged result: pricing of nominally independent, competing owners moved in concert, which the complaint characterizes as eliminating "independent centers of decision-making on pricing" (Paul, Weiss, Rifkind, Wharton & Garrison LLP, 2025). In antitrust terms, this is a hub-and-spoke arrangement — RealPage as the hub, participating landlords as the spokes — distinguished from lawful parallel pricing by two factors alleged in the complaint: the shared data was nonpublic and competitively sensitive, and the coordination included direct communication among competitors in RealPage- hosted forums (Paul, Weiss, Rifkind, Wharton & Garrison LLP, 2025). 2.3 Market impact The practical effect alleged is a compression of the ordinary competitive discipline that keeps rents responsive to local vacancy and demand conditions. Coordinated pricing schemes are inherently unstable — any single operator who cuts rent ahead of a softening submarket, or extends an individual concession, begins to unwind the equilibrium — which is precisely why the architecture's enforcement layer (auto-accept defaults, override tracking, compensation linkage) exists: to suppress the ordinary commercial discretion whose exercise would cause the scheme to collapse (Yale School of Management, Thurman Arnold Project, 2025). The mechanism does not require every landlord in a market to participate; coordinated-effects analysis in antitrust doctrine treats a market as vulnerable once a sufficiently large combined share of the price-setting segment (not the total housing stock) is held by aligned operators. 3. San Francisco's Municipal Response San Francisco's Board of Supervisors enacted the ﬁrst municipal ordinance in the United States prohibiting the sale or use of algorithmic devices to set or recommend residential rents where those devices draw on the conﬁdential, nonpublic pricing data of competing landlords, with civil penalties of up to $1,000 per violation. The ordinance is a tool ban: it reaches the software and the speciﬁc data input it consumes, not the underlying conduct of coordinated pricing itself, nor the compensation structures or market concentration that sustain it once the software is withdrawn. 4. The Federal Settlement Structure 4.1 Terms The DOJ's settlement with RealPage (agreement announced November 24, 2025; ﬁnal judicial approval under the Tunney Act, May 2026) imposes no ﬁnancial penalty and secures no admission of wrongdoing. It requires behavioral modiﬁcations to RealPage's revenue-management products and establishes a three-year, court-appointed monitor with access to source code, model-training documentation, and runtime logic, plus annual compliance certiﬁcations (Hogan Lovells, 2025; U.S. Department of Justice, 2026). RealPage's own public statement characterizes the settlement as formalizing product modiﬁcations already underway and frames the monitor as conﬁrming, rather than constraining, its practices (RealPage, 2025). Individual landlord defendants are settling on a rolling basis rather than as a single bloc — Cortland and Greystar's settlements were agreed in 2025, and Willow Bridge's proposed consent decree followed on July 6, 2026 (AZBEX, 2026; Multifamily Dive, 2026). This pattern means the litigation, and the terms attaching to each operator, will continue to develop over the coming months. 4.2 What the settlement is, and is not In antitrust practice, remedies are typically classed as either structural (divestiture, de- concentration — altering market structure) or behavioral/conduct (ongoing rules of conduct policed over time). The RealPage settlement is a conduct remedy. The Antitrust Division's own remedial philosophy has historically treated conduct remedies as the weaker, disfavored class, for three reasons directly applicable here: they conscript the government into standing regulation of a market it does not operate; they are vulnerable to compliance with the letter while the substance persists; and they leave the underlying market structure and incentive architecture untouched (U.S. Department of Justice, Antitrust Division, 2020). Ten states that joined the federal complaint — including California — declined to sign the settlement, reserving the right to continue litigating if the relief proves insufficient (GovFacts, 2025). That reservation, from the enforcers closest to the affected renters, is itself informative. 5. Why Banning the Tool Is Not the Same as Banning the Behavior This is the operative ﬁnding for any municipality considering legislative action, and it follows directly from the settlement's own scope: • The monitor audits a vendor, not a market. Its mandate runs to RealPage's code and design; it has no purchase on how a regional or on-site property manager is compensated, or on submarket concentration. • The incentive survives the tool. Net-operating-income- and occupancy-linked bonus structures that reward adherence to the pricing equilibrium are untouched by either the SF ordinance or the federal settlement. • The behavior has been learned. As a former Acting Chair of the Federal Trade Commission observed of this category of case, wherever the word "algorithm" appears one may as well substitute "a guy named Bob" — it is the coordinating conduct, not the software automating it, that antitrust law should reach (Yale School of Management, Thurman Arnold Project, 2025, quoting Ohlhausen, 2017). Remove the software, or restrict the data it ingests, and a concentrated set of operators can still align pricing by following a public-data price leader and an equilibrium they have already internalized — compliance with the rule's letter, continuation of the coordinated outcome in substance. • Concentration is the ampliﬁer neither remedy reaches. Where a small number of professionally managed, similarly ﬁnanced operators control a majority of a submarket's price-setting segment (the recently built, large, market-rate stock — not the total housing count, which includes price-capped and administratively priced units that do not set the frontier), the market is structurally primed for this kind of alignment regardless of which software, if any, is nominally in use. Implication for Bozeman: a municipal ordinance modeled solely on San Francisco's — a prohibition on the software — addresses the visible instrument but not the underlying incentive and concentration dynamics that produced the conduct in the ﬁrst place. To the extent the Commission wishes to legislate in this area at all, the more durable interventions available at the municipal level are those aimed at the conduct and its visibility rather than the tool alone: disclosure requirements (when and how algorithmic or shared-data pricing tools are used in a lease negotiation), tenant-facing transparency obligations, and coordination with the Montana Attorney General's office and the DOJ's ongoing enforcement rather than a freestanding local ban whose reach a national vendor can engineer around. 6. A Conﬁdentially Sourced Local Report The preparer of this brief has been informed, in conﬁdence, by a Bozeman-based property manager, that a prior employer of that manager used RealPage's revenue-management software. The source's identity is withheld here to protect them, and the preparer attests to the source's reliability. Consistent with sound practice for a document submitted to elected officials, the following distinctions should nonetheless be preserved: • What is attested: that RealPage was used by a prior employer of a named-to-the- preparer, currently Bozeman-based property manager. • What is not yet independently corroborated: which company, which property or properties, and over what period — none of which the preparer is disclosing, in order to protect the source. • What this does and does not establish: it is credible evidence that RealPage-family software has had a footprint in the Bozeman rental market at some point, from at least one source the preparer regards as reliable. It does not, on its own, establish current, ongoing use at an identiﬁable property, which is the level of speciﬁcity that would typically support a defensible legislative record. This is offered to the Commission as a credible basis for directing staff to investigate further (§7, Recommendation 2), not as a substitute for that investigation. Public-record corroboration — a lease footer, a vendor contract, a job posting referencing the platform, or a public disclosure — remains available as an independent path to veriﬁcation that does not require identifying the source. 7. Recommended Next Steps for the Commission 1. Direct staff to monitor the DOJ docket (United States et al. v. RealPage, Inc. et al., M.D.N.C.) for the outcome of pending individual landlord settlements and any structural relief sought by non-settling states. 2. Investigate whether RealPage-family revenue-management software is in current use by any large, professionally managed multifamily property in Bozeman or Gallatin County. The report in §6 provides credible grounds to open this inquiry; veriﬁcation should proceed through public-record channels (vendor contracts, lease disclosures, job postings, direct inquiry to property managers) rather than through the conﬁdential source. 3. If legislative action is contemplated, prioritize disclosure and conduct-based measures over a tool-speciﬁc ban, given the federal experience documented above. 4. Consider coordination with the Montana Attorney General's consumer protection division, given that ten states (not including Montana) have preserved independent litigation rights against the settling parties. References (APA 7th) AZBEX. (2026, July 21). DOJ settles RealPage pricing collusion case.https://azbex.com/ federal/doj-settles-realpage-pricing-collusion-case/ Concurrences. (2026, July). The US DoJ reaches a proposed settlement with one of the largest residential property managers to resolve claims of algorithmic rent coordination and exchange of competitively sensitive data in the multifamily rental housing sector (RealPage / Willow Bridge).https://www.concurrences.com/en/bulletin/news-issues/july-2026-ii/the- us-doj-reaches-a-proposed-settlement-with-one-of-the-largest-us-residential GovFacts. (2025). How the DOJ settlement with RealPage will change the rental market. https://govfacts.org/tech-innovation/tech-competition/antitrust-enforcement/how-the-doj- settlement-with-realpage-will-change-the-rental-market/ Hogan Lovells. (2025, November 24). Proposed DOJ settlement provides guidance on use of competitive information in algorithmic pricing tools. JD Supra. https://www.jdsupra.com/ topics/data-sharing/enforcement-actions/settlement Lawyer Monthly. (2026, July 7). DOJ Willow Bridge RealPage settlement.https:// www.lawyer-monthly.com/2026/07/justice-department-willow-bridge-realpage- settlement/ MassLandlords. (2025). RealPage, Greystar, other landlords agree to settlement in DOJ antitrust lawsuit.https://masslandlords.net/realpage-greystar-other-landlords-agree-to- settlement-in-doj-antitrust-lawsuit/ Multifamily Dive. (2026, July). Willow Bridge agrees to settle in DOJ's RealPage price-ﬁxing case.https://www.multifamilydive.com/news/willow-bridge-settlement-realpage- lawsuit/824731/ Paul, Weiss, Rifkind, Wharton & Garrison LLP. (2025, December 2). Practical takeaways from the DOJ's algorithmic pricing settlement.https://www.paulweiss.com/insights/client- memos/practical-takeaways-from-the-doj-s-algorithmic-pricing-settlement RealPage. (2025, November 24). RealPage reaches settlement with U.S. Department of Justice [Press release]. https://www.realpage.com/news/realpage-reaches-settlement-with- us-department-of-justice/ U.S. Department of Justice. (2024, August 23). Justice Department sues RealPage for algorithmic pricing scheme that harms millions of American renters [Press release]. https:// www.justice.gov/archives/opa/pr/justice-department-sues-realpage-algorithmic-pricing- scheme-harms-millions-american-renters U.S. Department of Justice. (2026, May 8). United States et al. v. RealPage, Inc. et al.: Response to public comments. Federal Register. https://www.federalregister.gov/ documents/2026/05/08/2026-09147/united-states-et-al-v-realpage-inc-et-al-response-to- public-comments U.S. Department of Justice, Antitrust Division. (2020). Merger remedies manual. Vogell, H. (2025, November 26). DOJ backs tenants in price-ﬁxing case against big landlords. ProPublica. https://www.propublica.org/article/doj-backs-tenants-price-ﬁxing- case-big-landlords-real-estate-tech Yale School of Management, Thurman Arnold Project. (2025). Student paper on RealPage and algorithmic pricing remedies (quoting Ohlhausen, M. K., FTC, 2017, "Should we fear the things that go beep in the night?"). https://som.yale.edu/sites/default/ﬁles/2025-05/7. %20RealPage-%20TAP.pdf Reliability note: The six-mechanism training/behavior account and market-impact characterization are drawn from the federal complaint and contemporaneous legal/ journalistic analysis; they are allegations, not adjudicated ﬁndings — RealPage and settling defendants admit no wrongdoing. The structural-versus-behavioral remedy critique is this brief's analytical synthesis of established antitrust doctrine, offered as argument rather than as an adjudicated conclusion in this matter. Litigation status is current to July 26, 2026, and is fast-moving; the Willow Bridge consent decree remains subject to court approval.