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Senators Had Questions for the Maker of a Rent-Setting Algorithm. The Answers Were “Alarming.”
ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.
After a ProPublica investigation last year, a group of senators demanded answers from a real estate tech company that helps landlords set rents across the country.
The investigation revealed how some of the nation’s biggest landlords share proprietary information with RealPage, a Texas company whose software uses the data to recommend rent prices for available units. Legal experts say the arrangement may facilitate cartel-like behavior among landlords, who could use the software to coordinate pricing.
Now, RealPage has responded to questions from Democratic Sens. Elizabeth Warren, Bernie Sanders, Tina Smith and Ed Markey. The company’s answers, the lawmakers said, revealed “alarming” new details.
In a letter to the Department of Justice, the senators said RealPage did not provide all the information they had asked for last November, but the answers the company did give raise concerns that its YieldStar software may play a role in driving rent inflation in some of the country’s biggest markets.
“YieldStar has been most prevalent in some of the regions most heavily targeted by corporate buyers and with the highest rent increases,” the senators wrote.
The legislators said that publicly available information shows the software is used in pricing more than 4 million units, representing about 8% of all rental units nationwide. RealPage has so many clients it has access to “transactional apartment data from the rent rolls of 13+ million units,” according to the company’s website.
“Given YieldStar’s market share, even the widespread use of its anonymized and aggregated proprietary rental data by the country’s largest landlords could result in de-facto price-setting by those companies, driving up prices and hurting renters,” the senators’ letter said.
The senators wrote that “the DOJ should act to protect American families and closely review rent-setting algorithms like YieldStar to determine if they are having anti-competitive effects on local housing markets that have seen increased institutional investor activity.”
In a response to questions from ProPublica about the lawmakers’ letter, a RealPage spokesperson said that the firm “appreciates the opportunity to work with the senators’ offices.” The company is “always willing to engage policy stakeholders to ensure an informed and comprehensive understanding of the benefits we contribute to the rental ecosystem,” the spokesperson said.
After ProPublica’s story ran, more than two dozen federal lawsuits were filed by renters alleging antitrust violations by RealPage and more than 40 landlords in multiple states. When the first complaint was filed, a RealPage representative told ProPublica that the company “strongly denies the allegations and will vigorously defend against the lawsuit.” She declined to comment further, saying the company does not comment on pending litigation.
In November, sources confirmed that the DOJ’s antitrust division had opened an investigation. At the time, RealPage did not respond to a request for comment .
In its 14-page response to the senators, RealPage said recent news stories, including ProPublica’s, “do not accurately describe how these products work, in particular with regard to the role that data about other properties plays in generating rent price recommendations for RealPage’s customers and the effect that the use of these products has had on rents and apartment occupancy rates.” The company said a shortage of supply in rental housing is responsible for driving rents higher, not its software. The letter was redacted in places to protect confidential business information.
The company said that the purpose of YieldStar is not to raise rents at every opportunity, but to “manage revenues” so they are in line with the owner’s needs and management strategy. Data “does not support the assertion that YieldStar uniformly pushes rents higher,” the company said, and the software will often recommend reducing rents to minimize vacancies.
ProPublica’s story did not assert that the software always pushes rents higher. But our data analysis found that five of RealPage’s largest clients controlled more apartments in cities where rents rose rapidly and fewer apartments in metro areas where rents increased more slowly. All five property managers used RealPage’s pricing software in at least some of their buildings, and together they control thousands of apartments in metro areas where rents for a typical two-bedroom apartment rose 30% or more between 2014 and 2019.
RealPage clients may gravitate toward high-rent-growth markets simply because the companies expect those areas to offer more opportunities to make money. But RealPage says pricing suggested by its software helps landlords beat their market.
In its letter to senators, RealPage said the software itself “never” recommends removing apartments from a landlord’s inventory — a move that reduces the supply of housing and could make it easier to command higher rents — though property managers can do so if a unit needs repairs or renovations, for example.
The company said that increased use of its software has not reduced the number of apartments available for rent overall. The company said the metro areas where YieldStar has the highest penetration “have not seen inflated vacancy rates.”
“While it is difficult to differentiate the impact of revenue management tools like YieldStar from other market forces that affect occupancy rates, the fact that apartment providers now have commercial revenue management products available to them has not resulted in a national increase in vacancy rates,” the company said. RealPage said vacancy rates have dropped over the decade — a trend that housing experts say is part of a crisis in housing availability and cost.
But we found examples where company officials had urged property managers to consider whether they could make more money from rentals by raising prices and not rushing to fill all vacant units.
RealPage’s former CEO, Steve Winn, boasted on an earnings call in 2017 that one large property company found it could make greater profits by operating at a lower occupancy rate that “would have made management uncomfortable before.”
“Initially, it was very hard for executives to accept that they could operate at 94% or 96% and achieve a higher NOI by increasing rents,” Winn said on the call, referring to net operating income. The company “began utilizing RealPage to operate at 95%, while seeing revenue increases of 3% to 4%.”
A RealPage blog in 2018 also warned student housing landlords that if they weren’t using revenue management software, they could be “leaving money on the table” by being too quick to decrease rents.
“Many of the beds renting earlier in the season were arbitrarily set at a lower tier price — and may have been rentable at a higher price,” the blog said. “Worse, in fear of empty beds, some properties offer concessions or discounts for early rental decisions when they might have been able to fill all the beds at a top tier price.”
Another page on RealPage’s website said: “By focusing on the right information — not just occupancy — capabilities like revenue management empower operators to assure that pricing is right and there’s no money left on the table.”
The company also told the senators that the final decision on what to charge rests with the property manager. “YieldStar customers are under no obligation — contractually or otherwise — to follow the pricing recommendations generated by YieldStar software,” the company said.
But former RealPage employees told ProPublica that landlords follow as much as 90% of the software’s suggestions.
The letter said that news reports “badly distort and overstate the role that non-public data about other properties plays.” RealPage said its software prioritizes a landlord’s internal rent data over external factors such as what competitors charge.
But it acknowledged that it draws information from “executed leases,” which are typically not public.
Even with RealPage’s explanation, Warren and the other senators expressed concerns about the use of such data.
“Notably, RealPage provided important information about the extent to which the company facilitates information sharing by and among large institutional landlords — a particular concern given the market share of the product,” the senators’ letter to the DOJ said.
The company said its software helps landlords offer prospective renters more options for the length and cost of a lease. It said that the algorithm removes human biases that can result in violations of laws barring discrimination in housing.
The letter said revenue management software is not unique to RealPage, or even to the housing market.
But ProPublica found that the company became the dominant provider of such services for apartment rentals in 2017, when it bought its biggest competitor.
Haru Coryne of ProPublica and Ryan Little contributed data analysis.
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Have a Student in New Mexico Schools? Here Is What to Know About How School Discipline Works.
We wrote this story in plain language. Plain language means it is easier to read for some people.
This is a guide to school discipline in New Mexico and Gallup-McKinley County Schools. You can print and share a short copy of this guide.
This guide is part of a project by ProPublica and New Mexico In Depth.
We are reporters. We are not lawyers or advocates. We want to give you information.
School discipline means how schools punish students for breaking rules. For example, schools can:
- Give students detention.
- Suspend students. Suspend means students are kicked out of school for a limited time.
- Expel students. Expel means students are kicked out of school for a long time.
New Mexico public schools expel Native American students more often than white students. Gallup-McKinley County Schools is the reason for most of this difference. Gallup-McKinley County Schools is in western New Mexico.
We wrote a story about how Gallup-McKinley County Schools expels students more often than in the rest of the state. Gallup-McKinley County Schools calls the police on students more than the rest of the state.
Mike Hyatt is the superintendent of the Gallup-McKinley County Schools. He did not respond to our questions. He called our story “completely false.” He said Gallup-McKinley County Schools expelled 15 students in the last 7 years.
But we found data that said Gallup-McKinley County Schools expelled students at least 211 times between fall 2016 and spring 2020.
We talked to many families in Gallup-McKinley County Schools. Many said they thought the district was harsh. Families also said school discipline is confusing.
Roxanne Arthur was a social worker. She worked with Gallup-McKinley County Schools.
Roxanne works for the Native American Disability Law Center. She said families do not understand the school discipline process. Some families do not speak English. That makes school discipline hard to understand.
Roxanne said, “I don't think the time is taken to really explain the situation to a parent.”
This guide explains how school discipline works in Gallup-McKinley County Schools and other New Mexico public schools.
- Some rules come from the national government. All schools must follow these rules.
- Some rules come from the state. All New Mexico schools must follow these rules.
- Some rules come from the Gallup-McKinley County Schools handbook. Gallup-McKinley County Schools must follow these rules.
You can visit this website to learn about rules in other states. You can also ask school officials about the rules in your state.
This guide answers these questions about discipline in New Mexico schools:
- Do New Mexico schools tell parents when they discipline students?
- Can New Mexico schools call the police on students?
- How do New Mexico schools decide how to discipline students?
- Do New Mexico schools have to hold disciplinary hearings for students?
- Can New Mexico schools search students or their things?
- What rights do students with disabilities have?
- How does Gallup-McKinley County Schools decide how to discipline students?
- Does discipline mean Gallup-McKinley students cannot play sports?
- How can I complain about schools in New Mexico?
You can ask us questions at NMSchools@propublica.org.
Do New Mexico schools tell parents when they discipline students?Schools in New Mexico have to tell parents when they discipline students. Schools must:
- Call parents.
- Meet parents in person.
- Or send a written note to parents.
If a school is kicking a student out, it has to tell parents why.
The student can say that the school is wrong. The school has to show how it knows the student broke a rule. The school has to let the student share their side of what happened.
Can New Mexico schools call the police on students?All schools in the United States have to call the police if a student has a gun at school.
Gallup-McKinley County Schools says it will call the police if a student:
- Sexually assaults someone (hurts someone sexually).
- Commits aggravated assault (hurts someone badly).
- Breaks into the school.
- Sells or gives out drugs or alcohol.
Gallup-McKinley County Schools can call police if a student:
- Fights.
- Does graffiti.
- Brings drugs or alcohol to school.
- Breaks other serious rules.
Each school district makes its own rules for how to discipline students.
Schools in New Mexico cannot hurt students.
The U.S. government has a rule that says schools need to expel students for 1 year if they bring a gun to school. But schools don’t have to follow the rule all the time.
Do New Mexico schools have to hold disciplinary hearings for students?Students can’t be kicked out of school for more than 10 days without a disciplinary hearing.
Disciplinary hearings are meetings. The meeting usually includes:
- The student.
- Their parent or caregiver.
- People who work for the school district.
The school district needs to tell parents there is going to be a hearing. The district can send a letter in the mail or give it to parents in person. In New Mexico, this letter has to:
- Be sent 5 or more days before the hearing.
- Explain what rules the student broke.
- Explain what discipline the student could get.
- Tell you when and where the hearing is.
- Tell you they can discipline the student even if you do not go to the hearing.
- Tell you how to reschedule. - Families in Gallup-McKinley can call 505-721-1074
 
At hearings in New Mexico, you can:
- Ask to have someone translate for you. You do not have to pay money for a translator.
- Tell your side of the story.
- Bring evidence and witnesses.
- Bring a lawyer. - You have to tell the school 3 days before the hearing if you want to bring a lawyer.
 
- Ask for a recording or notes from the meeting.
The person in charge of discipline makes a decision after the hearing. They should only use evidence from the hearing to decide. The school district needs to prove the student broke the rules.
They write the family a letter within 10 days of the hearing. The letter tells the family what discipline the student will get.
Can New Mexico schools search students or their things?Courts in the United States have said that students should not be searched without “reasonable suspicion.” Reasonable suspicion means the school has a valid reason to think the student broke a rule.
New Mexico rules say school officials need a witness when they search a student. A witness is an extra person who watches what happens. The witness and the school official must be the same gender as the student.
What rights do students with disabilities have?Some students with disabilities have individualized education programs, or IEPs. An IEP says what special education services the student gets.
Schools in the United States cannot suspend or expel students with IEPs for more than 10 days if:
- The student broke a rule because of their disability.
- The student broke a rule because the school did not follow their IEP.
The school has a meeting to decide if the student broke a rule for one of these reasons.
Schools can suspend students with IEPs for 45 days if the student brings a gun or drugs to school. The school would need to have a special meeting first.
The school needs to keep teaching suspended students who have disabilities. For example, the school can provide schoolwork to take home.
How does Gallup-McKinley County Schools decide how to discipline students?Gallup-McKinley decides how to discipline students based on:
- The student’s age.
- What rule the student broke.
- If the student has been in trouble before.
Gallup-McKinley can change its rules. The district puts the rules on gmcs.org. You can ask your student’s teacher about the rules.
There are four levels of discipline:
- Level 1: Warnings and conversations with students or parents. - Level 1 is for students who break small rules like:- Missing school a few times.
- Not wearing the right clothes.
- Interrupting class.
- Cheating.
- Using their cellphone.
- Gambling.
- Having energy drinks.
 
 
- Level 1 is for students who break small rules like:
- Level 2: Suspension from clubs, sports and other after-school activities. - Level 2 is for any of the rules in Level 1 or for things like:- Bringing tobacco or cigarettes to school.
- Bringing a small knife to school.
- Acting out or causing a disruption.
- Hurting someone.
- Showing affection publicly.
 
- At Level 2, students can also:- Get detention.
- Get in-school or overnight suspension.
- Have to pay for anything they break or destroy.
 
 
- Level 2 is for any of the rules in Level 1 or for things like:
- Level 3: Short suspension from school and activities.- Level 3 is for when a student breaks rules many times or breaks serious rules. Serious issues include:- Fighting.
- Threatening to hurt someone with a weapon.
- Bringing or using drugs or alcohol at school.
 
- At Level 3, the student is either:- Suspended for 3 to 5 days from school and activities.
- Taken out of school immediately for 1 day.
 
 
- Level 3 is for when a student breaks rules many times or breaks serious rules. Serious issues include:
- Level 4: Suspension from school and activities. - Level 4 is for when a student breaks rules many times or breaks very serious rules. Very serious issues include:- Hurting someone sexually.
- Bringing weapons to school.
- Breaking into the school.
- Setting something on fire.
- Selling or giving out drugs or alcohol.
 
- At Level 4, the student is:- Suspended from school for 5 to 10 days.
- Not allowed to do clubs, sports or other activities for 1 year.
 
 
- Level 4 is for when a student breaks rules many times or breaks very serious rules. Very serious issues include:
The school needs to have a disciplinary hearing if it wants to:
- Suspend a student for more than 10 days.
- Expel a student. Being expelled from Gallup-McKinley County Schools used to mean being removed from school for at least 90 days. Now being expelled means a student cannot ever come back to school.
The school district can decide to discipline the student at any level they want.
Does discipline mean Gallup-McKinley students cannot play sports?Suspended or expelled students cannot play sports.
The school can suspend students from sports, clubs and other after-school activities without a hearing.
- Level 2 Discipline:- The student cannot play sports for however long the school district says.
 
- Level 3 Discipline: - First time the student gets in trouble: The student cannot play sports for 30 days.
- Second time the student gets in trouble: The student cannot play sports for 45 days or until the end of the season.
- If the student uses or brings drugs or alcohol to school: The student cannot play sports for 45 days or until the end of the season.
 
Gallup-McKinley can change its rules. The district puts the rules on gmcs.org. You can also ask your student’s teacher about the rules.
How can I complain about schools in New Mexico?You can disagree with how the school wants to discipline your child. You can ask for an appeal. Appeal means you ask the district to look again at your child’s case.
You must tell the district you want to appeal. You have 10 school days to do this after getting the decision.
Your district does not have to review all cases. Reviews should be done in 15 days.
The 2022-2023 handbook for Gallup-McKinley County Schools does not tell families how to appeal.
You have the right to complain if you are not happy with discipline at your school.
It is against the law for the school to punish you or your student for complaining.
- The Department of Education’s Office for Civil Rights makes sure schools treat all students fairly. You can contact it by:- Emailing OCR@ed.gov.
- Calling 800-421-3481.
 
- If your student has a disability, you can complain to the state. You can contact it by emailing dispute.resolution@ped.nm.gov.
- The state says these are groups that support families with children with disabilities:- Parents Reaching Out: 505-247-0192 or 800-524-5176.
- EPICS (for parents of Native American children with disabilities): 505-767-6630 or 888-499-2070.
- Disability Rights New Mexico: 505-256-3100.
- Native American Disability Law Center: 505-566-5880 or 800-862-7271.
- Pegasus Legal Services for Children: 505-244-1101.
 
Bryant Furlow of New Mexico In Depth and Maya Miller of ProPublica contributed reporting. Rebecca Monteleone translated this story into plain language.
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As New York Pays Out Millions In Police Misconduct Settlements, Lawmakers Ask Why They Keep Happening
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Nearly two decades ago, the New York Police Department drew national headlines for its violent response to protests outside the 2004 Republican National Convention. Officers wrapped demonstrators in orange mesh netting and shipped them off to a dirty Manhattan pier, where they were fingerprinted and held, some for more than 24 hours.
The protesters sued, and after years of tense litigation, the city settled what the New York Civil Liberties Union then called the “largest protest settlement in history” — an $18 million payout to resolve claims that the police had violated the civil rights of about 1,800 people.
“While no amount of money can undo the damage inflicted by the NYPD’s actions during the Convention, we hope and expect that this enormous settlement will help assure that what happened in 2004 will not happen again,” Christopher Dunn, lead counsel in the NYCLU cases, said at the time.
But in June 2020, just six years after that settlement, history repeated. Facing mass demonstrations, this time in the wake of the Minneapolis police killing of George Floyd, the NYPD again became the focus of intense media scrutiny for its bellicose approach to protests, perhaps most notably for boxing in, or “kettling,” about 300 protesters in the Bronx before violently arresting them. Those protesters also sued, and earlier this month their lawyers announced yet another “historic” settlement, in which each protester would get $21,500. The total payout could cost taxpayers between $4 million and $6 million.
Now, the durability of that narrative is prompting some lawmakers to question not just the NYPD’s actions but whether the city effectively enables expensive payouts by aggressively defending against charges of police misconduct instead of leveraging its legal might to pressure the NYPD to change its behaviors and practices. Indeed, while the city charter requires the Law Department to represent “the city and every agency thereof,” it also says the department should “maintain, defend and establish” the interests of “the people.”
In the Floyd and RNC cases, city lawyers fought tooth and nail in court against misconduct charges, employing a litigation strategy that challenged disclosures and claims at every turn — an approach that critics say can prolong cases and actually drive up costs.
“It’s a bad practice,” said Councilmember Gale Brewer, a Manhattan Democrat, who plans on questioning Law Department officials when they appear before the City Council’s Committee on Governmental Operations for a budget hearing on March 22.
“The public may not care about the person getting arrested or the cops, but they do care about the money,” she said of settlements to civil rights lawsuits. “It’s millions and millions of dollars. And there’s always a push — ‘How can you push those settlements to be less?’ Well, that doesn’t answer the question: Why do they keep happening?”
It is a line of inquiry backed by the Council’s speaker, Adrienne Adams, whose spokesperson said in a statement that “city attorneys can play a constructive role in preventing future violations of constitutional rights, and they should.”
“It is a disservice to our city and its taxpayers when an agency tasked with protecting them not only violates their rights, but also passes on the cost back to them,” said Mandela Jones, the spokesperson for the Queens Democrat. “It’s equally bad when that agency is enabled to continue engaging in this problematic conduct that repeats this cycle.”
Spokespeople for the mayor’s office, the NYPD and the Law Department did not respond to requests for comment about the hearing. The NYPD said in a statement earlier this month that the department had “re-envisioned” much of its training and policies around “large-scale demonstrations” after the Floyd protests based on the recommendations of “three outside agencies who carefully investigated that period.” The Law Department has previously told ProPublica it takes its ethical responsibilities seriously and litigates each case with an open mind. “While we work to vigorously protect the interests of the city in every case, we are always mindful that opposing parties are also citizens who should be treated with respect and whose claims should be evaluated fairly,” a department spokesperson said last year.
The public scrutiny follows a December report from ProPublica and New York Magazine that examined the city’s Special Federal Litigation Division, the little-known unit within the Law Department that exclusively handles federal civil rights lawsuits alleging abuses by police officers, jail guards and prosecutors. Former attorneys described a culture within Special Fed that prizes winning, even if it means drawing out cases with merit and negotiating them down to the smallest possible payout. The hard-line approach has sometimes drawn rebukes from the bench. Last year, for example, in the Floyd protest case, a judge dressed down a senior Special Fed lawyer for failing to obey court orders. The city has also been sanctioned multiple times for not turning over records in a timely manner. (That lawyer has since been fired, though she denied any wrongdoing.)
Many within the Law Department see themselves as guardians of the city’s treasury, and argue that aggressively defending police cases weeds out frivolous claims, preventing undeserving plaintiffs from obtaining public monies that could otherwise fund city services. But plaintiffs’ attorneys and advocates for police reform counter that Special Fed actually wastes money and public trust by aggressively, and sometimes expensively, defending cases involving clear police misconduct. The NYPD has previously said that any allegation it has “undue influence” over Special Fed and its defense of officers is “outrageous and inaccurate.”
The purpose of damages in federal civil-rights litigation is “to incentivize the government to change policy so it doesn’t face the same exposure for similar kinds of violations in the future,” said Gideon Oliver, a civil rights attorney who represents protesters. “It doesn’t work if the city and the Law Department view cutting those checks as just the cost of doing business.”
Settlements and payouts for police misconduct cases totaled $121 million last year, up from about $85 million the year before, according to an analysis of city data by the Legal Aid Society, the city’s primary provider of indigent legal services. (The sharp increase was largely attributable to six payouts of $10 million or more stemming from decades-old wrongful conviction cases.) A Washington Post analysis of settlement data last year showed that, between 2010 and 2020, more than 5,000 NYPD officers were named in two or more claims, accounting for 45% of New York City taxpayer dollars spent on misconduct cases.
Meanwhile, the full price tag for lawsuits related to the Floyd protests will likely grow well beyond this month’s multimillion-dollar settlement. As of last July, 565 claims had been filed over the NYPD’s policing of the demonstrations, according to records maintained by the city’s chief financial officer, with 220 of them having cumulatively settled, many pre-litigation, for nearly $7 million. A consolidation of lawsuits that seeks widespread reform of how the police handle protests is also still active in Manhattan federal court.
An effort in the early years of then-Mayor Bill de Blasio’s first term sought to change the culture within the Law Department, pushing attorneys to think of their primary client as the broader public, not just the named officer in any given lawsuit. But that effort largely withered as the mayor’s relationship with the NYPD and its unions deteriorated. Brewer, citing the story by ProPublica and New York Magazine, said the role of the Law Department and how it represents the city should be subject to public debate. Lawyers for protesters agreed.
“The Council has an important opportunity when it’s approving its budget to demand that the city take a different approach to widespread NYPD legal violations,” said the NYCLU’s Dunn, who is also working on Floyd protest litigation. “When they’re there asking for large sums of public funds, the City Council should be demanding the Law Department be more responsible in the way it's addressing litigation like this.”
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From St. Louis to Smyrna (and Back Again)
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