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RealPage Inc. has launched a legal offensive against the city of Berkeley, asking a federal judge to halt an upcoming ordinance that would ban the use of rent-pricing algorithms. The lawsuit, filed Wednesday, argues that the ordinance is an unconstitutional restriction on free speech and is based on "groundless" accusations that algorithmic pricing has driven up rental costs.

A Sweeping Ban on Data-Driven Pricing

The controversial Berkeley ordinance, set to take effect on April 24, prohibits the use of software to set or recommend rental prices, citing concerns that such tools contribute to price-fixing and housing instability. RealPage, whose revenue management software provides rental price suggestions based on market data, claims the city is unlawfully restricting access to information.

“The ordinance regulates speech — specifically, the creation and dissemination of information,” RealPage contends. “The First Amendment protects the right to generate, use, and share information. There is no ‘landlord’ or ‘algorithm’ exception to these rights.”

According to the complaint, the ordinance bans the use of publicly available data for rental pricing analysis—even extending to calculations as simple as an Excel spreadsheet input. Yet, it does not prohibit real estate groups from publishing their own rental market analyses, an inconsistency that RealPage highlights as evidence of discrimination against technology-driven pricing tools.

Free Speech or Market Manipulation?

The city of Berkeley contends that AI-driven pricing algorithms have exacerbated the housing crisis by allowing landlords to align rents artificially, thereby eliminating competition. RealPage rejects this claim, arguing that no evidence supports the notion that its software causes rent inflation or market manipulation.

“There are countless less burdensome alternatives to regulating rental prices—such as increasing housing supply or enforcing antitrust laws—rather than imposing a blanket ban on a lawful and beneficial technology,” RealPage states in its lawsuit.

Allegations of Misinformation and Political Pressure

Beyond constitutional concerns, RealPage alleges that the ordinance is the result of a deliberate misinformation campaign spearheaded by the American Economic Liberties Project (AELP), a nonprofit advocating for stronger antitrust enforcement.

“The AELP has falsely blamed rising rents on RealPage’s software rather than acknowledging the real issue: insufficient housing supply,” the lawsuit states. “Some municipalities have embraced this baseless narrative to deflect attention from their own policies that hinder new housing development.”

Broader Legal Challenges Loom

RealPage’s battle with Berkeley is just one front in a larger war. The company is currently embroiled in an antitrust lawsuit filed by the U.S. Department of Justice and nine states, accusing it of enabling coordinated rent-setting practices among landlords. The Justice Department’s case, filed in August 2024, argues that RealPage’s software aggregates rental data in a way that facilitates price-fixing.

“To RealPage, the ‘greater good’ is served by ensuring that competing landlords can align pricing—robbing renters of competitive pricing and leasing terms,” prosecutors claim.

The company is also facing related legal scrutiny in Washington, D.C., and Arizona, as well as a major multidistrict litigation in Tennessee, where similar claims have been playing out for two years.

Seeking Injunction Against Berkeley

In its lawsuit, RealPage is requesting an injunction to block the ordinance before it takes effect, asserting that the law would cause lasting damage to innovation in the rental market.

“Rather than enacting misguided bans, policymakers should focus on the real problem—housing shortages,” said RealPage CEO Dana Jones in a statement. “Until then, we must take legal action to defend the essential role of technology in supporting a healthier housing market.”

Berkeley city officials and AELP representatives did not immediately respond to requests for comment.

RealPage is represented by attorneys from Gibson Dunn & Crutcher LLP. Legal representation for the city of Berkeley was not immediately available.