“These findings raise significant concerns that landlords are profiteering by taking taxpayer money that is intended to support military families.”
WASHINGTON – Senator Ruben Gallego (D-AZ), a member of the Senate Banking, Housing, and Urban Affairs Committee, and Senator Elizabeth Warren (D-MA), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee and member of the Senate Armed Services Committee led a letter to Secretary of the Department of Defense (DoD), Pete Hegseth, calling for an investigation into whether landlords may be using property management software company RealPage’s services to price gouge military families.
“Our military families already sacrifice so much to serve our nation, often having to relocate every few years,” said Senator Gallego. “It is vital we ensure RealPage’s algorithm is not used to price gouge military families. The Basic Housing Allowance is meant to support military families – not line the pockets of corporate landlords.”
DoD provides servicemembers with a Basic Allowance for Housing (BAH) to cover the costs of owning or renting privately managed housing, an allowance that is adjusted periodically by region to keep up with housing costs. In 2023, DoD spent $24 billion on housing allowances for servicemembers.
There are long-held concerns that landlords are raising rents to pocket these BAH increases, rather than raising rents because of market conditions. One recent studyeven found that it was, “common for landlords to base their rent on the BAH for a particular rank,” so servicemembers see no difference in their yearly income.
Services provided by RealPage may enable landlords to raise rents even more aggressively, to the detriment of military families, by allowing landlords to exchange proprietary information about lease terms and rents and to set prices using non-public information.
DOJ and state attorneys generals have already alleged that RealPage contributed to excessive rental costs in several places where DoD raised housing allowances, including in Arizona where RealPage is being utilized by landlords in the Phoenix Metro area, home to Luke Air Force Base, and Tucson, home to Davis-Monthan Air Force Base.
In addition to hurting military families, unsustainable housing prices have negative implications for recruitment and retention for our military. Increasing housing costs are forcing families to delay moves and choose housing in unsafe neighborhoods or with low-quality conditions. Unlike civilian families, military families “do not have the opportunity to stabilize their housing costs due to frequent relocation.”
A recent Government Accountability Office report on military housing confirmed the negative impacts of high housing prices, including servicemembers taking on debt or commuting long distances for quality housing.
“The Department of Defense has a responsibility to protect military families from predatory private housing companies and ensure that taxpayer dollars meant for military families are not being pocketed by unscrupulous landlords,” wrote the senators.
The senators requested that DoD provide information on whether algorithms like RealPage’s are artificially driving up housing prices for military families by December 31, 2024.
You can read the full text of the letter HERE.
Senators Richard Blumenthal (D-CT), Catherine Cortez Masto (D-NV), Tammy Duckworth (D-IL), Andy Kim (D-NJ), Ed Markey (D-MA), Jeff Merkley (D-OR), Chris Murphy (D-CT), Bernie Sanders (I-VT), Tina Smith (D-MN), Mark Warner (D-VA), Reverend Raphael Warnock (D-GA), Peter Welch (D-VT), and Ron Wyden (D-OR) joined the letter.
Last year, then-Representative Gallego sent a letter to the Federal Trade Commission calling on the Commission to investigate alleged anticompetitive practices by RealPage, citing that, on average, Phoenix residents living in units priced by RealPage pay an overcharge of 12 percent compared to non-RealPage units. He also applauded the Department of Justice for filing an anti-trust lawsuit against the company.