The Brief

If you’ve hunted for apartments recently and felt like all the rents were equally high, you’re not crazy: Many landlords now use a single company’s software — which uses an algorithm based on proprietary lease information — to help set rent prices.

Federal prosecutors say the practice amounts to “an unlawful information-sharing scheme” and some lawmakers throughout California are moving to curb it. San Diego’s city council president is the latest to do so, proposing to prevent local apartment owners from using the pricing software, which he maintains is driving up housing costs.

San Diego’s proposed ordinance, now being drafted by the city attorney, comes after San Francisco supervisors in July enacted a similar, first-in-the-nation ban on “the sale or use of algorithmic devices to set rents or manage occupancy levels” for residences. San Jose is considering a similar approach.

And California and seven other states have also joined the federal prosecutors’ antitrust suit, which targets the leading rental pricing platform, Texas-based RealPage. The complaint alleges that “RealPage is an algorithmic intermediary that collects, combines, and exploits landlords’ competitively sensitive information. And in so doing, it enriches itself and compliant landlords at the expense of renters who pay inflated prices…”

But state lawmakers this year failed to advance legislation by Bakersfield Democratic Sen. Melissa Hurtado that would have banned the use of any pricing algorithms based on nonpublic data provided by competing companies. She said she plans to bring the bill back during the next legislative session because of what she described as ongoing harms from such algorithms.

“We’ve got to make sure the economy is fair and … that every individual who wants a shot at creating a business has a shot without being destroyed along the way, and that we’re also protecting consumers because it is hurting the pocketbooks of everybody in one way or another,” said Hurtado.

RealPage has been a major impetus for all of the actions. The company counts as its customers landlords with thousands of apartment units across California. Some officials accuse the company of thwarting competition that would otherwise drive rents down, exacerbating the state’s housing shortage and driving up rents in the process.

“Every day, millions of Californians worry about keeping a roof over their head and RealPage has directly made it more difficult to do so,” said California Attorney General Rob Bonta in a written statement.

A RealPage spokesperson, Jennifer Bowcock, told CalMatters that a lack of housing supply, not the company’s technology, is the real problem — and that its technology benefits residents, property managers, and others associated with the rental market. The spokesperson later wrote that a “ misplaced focus on nonpublic information is a distraction… that will only make San Francisco and San Diego’s historical problems worse.”

As for the federal lawsuit, the company called the claims in it “devoid of merit” and said it plans to “vigorously defend ourselves against these accusations.”

“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the (Justice Department) has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” the company’s statement read in part. “RealPage’s revenue management software is purposely built to be legally compliant, and we have a long history of working constructively with the (department) to show that.”

The company’s challenges will only grow if pricing software becomes another instance in which California lawmakers lead the nation. Following San Francisco’s ban, the Philadelphia City Council passed a ban on algorithmic rental price-fixing with a veto-proof vote last month. New Jersey has been considering its own ban.

Is it price fixing - or coaching landlords?

According to federal prosecutors, RealPage controls 80% of the market for commercial revenue management software. Its product is called YieldStar, and its successor is AI Revenue Management, which uses much of the same codebase as YieldStar, but has more precise forecasting. RealPage told CalMatters it serves only 10% of the rental markets in both San Francisco and San Diego, across its three revenue management software products.

Here’s how it works:

In order to use YieldStar and AIRM, landlords have historically provided RealPage with their own private data from their rental applications, rent prices, executed new leases, renewal offers and acceptances, and estimates of future occupancy, although a recent change allows landlords to choose to share only public data. This information from all participating landlords in an area is then pooled and run through mathematical forecasting to generate pricing recommendations for the landlords and for their competitors.

The San Diego council president, Sean Elo-Rivera, explained it like this:

“In the simplest terms, what this platform is doing is providing what we think of as that dark, smoky room for big companies to get together and set prices,” he said. “The technology is being used as a way of keeping an arm’s length from one big company to the other. But that’s an illusion.”

In the company’s own words, from company documents included in the lawsuit, RealPage “ensures that (landlords) are driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.” The company also said in the documents that it “helps curb (landlords’) instincts to respond to down-market conditions by either dramatically lowering price or by holding price.”

Providing rent guidance isn’t the only service RealPage has offered landlords. In 2020, a Markup and New York Times investigation found that RealPage, alongside other companies, used faulty computer algorithms to do automated background checks on tenants. As a result, tenants were associated with criminal charges they never faced, and denied homes.

Impact on tenants

Thirty-one-year-old Navy veteran Alan Pickens and his wife move nearly every year “because the rent goes up, it gets unaffordable, so we look for a new place to stay,” he said. The northeastern San Diego apartment complex where they just relocated has two-bedroom apartments advertised for between $2,995 and $3,215.

They live in an area of San Diego where the U.S. Justice Department says information-sharing agreements between landlords and RealPage have harmed or are likely to harm renters.

The department in August filed its antitrust lawsuit against RealPage, alleging the company, through its legacy YieldStar software, engaged in an “unlawful scheme to decrease competition among landlords in apartment pricing”. The complaint names specific areas where rents are artificially high. Beyond the part of San Diego where Pickens lives, those areas include South Orange County, Rancho Cucamonga, Temecula, and Murrieta and northeastern San Diego.

In the second quarter of 2020, the average rent in San Diego County was $1,926, reflecting a 26% increase over three years, according to the San Diego Union-Tribune. Rents have since risen even more in the city of San Diego, to $2,336 per month as of November 2024 – up 21% from 2020, according to RentCafe and the Tribune. That’s 50% higher than the national average rent.

The attorneys general of eight states, including California, joined the Justice Department’s antitrust suit, filed in U.S. District Court for the Middle District of North Carolina.

The California Justice Department contends RealPage artificially inflated prices to keep them above a certain minimum level, said department spokesperson Elissa Perez. This was particularly harmful given the high cost of housing in the state, she added. “The illegally maintained profits that result from these price alignment schemes come out of the pockets of the people that can least afford it.”

Renters make up a larger share of households in California than in the rest of the country — 44% here compared to 35% nationwide. The Golden State also has a higher percentage of renters than any state other than New York, according to the latest U.S. Census data.

San Diego has the fourth-highest percentage of renters of any major city in the nation.

The recent ranks of California legislators, however, have included few renters: As of 2019, CalMatters could find only one state lawmaker who did not own a home — and found that more than a quarter of legislators at the time were landlords.

Studies show that low-income residents are more heavily impacted by rising rents. Nationally between 2000 and 2017, Americans without a college degree spent a higher percentage of their income on rent. That percentage ballooned from 30% to 42%. For college graduates, that percentage increased from 26% to 34%.

“In my estimation, the only winners in this situation are the richest companies who are either using this technology or creating this technology,” said Elo-Rivera. “There couldn’t be a more clear example of the rich getting richer while the rest of us are struggling to get by.”

The state has invested in RealPage

Private equity giant Thoma Bravo acquired RealPage in January 2021 through two funds that have hundreds of millions of dollars in investments from California public pension funds, including the California Public Employees’ Retirement System, the California State Teachers’ Retirement System, the Regents of the University of California and the Los Angeles police and fire pension funds, according to Private Equity Stakeholder Project.

“They’re invested in things that are directly hurting their pensioners,” said K Agbebiyi, a senior housing campaign coordinator with the Private Equity Stakeholder Project, a nonprofit private equity watchdog that produced a report about corporate landlords’ impact on rental hikes in San Diego.

RealPage argues that landlords are free to reject the price recommendations generated by its software. But the U.S. Justice Department alleges that trying to do so requires a series of steps, including a conversation with a RealPage pricing adviser. The advisers try to “stop property managers from acting on emotions,” according to the department’s lawsuit.

If a property manager disagrees with the price the algorithm suggests and wants to decrease rent rather than increase it, a pricing advisor will “escalate the dispute to the manager’s superior,” prosecutors allege in the suit.

In San Diego, the Pickenses, who are expecting their first child, have given up their gym memberships and downsized their cars to remain in the area. They’ve considered moving to Denver.

“All the extras pretty much have to go,” said Pickens. “I mean, we love San Diego, but it’s getting hard to live here.”

“My wife is an attorney and I served in the Navy for 10 years and now work at Qualcomm,” he said. “Why are we struggling? Why are we struggling?”

On Friday, Southern California Edison filed lawsuits against Los Angeles County and several other agencies over their alleged roles in the Eaton Fire.

Two lawsuits were filed.

In one suit, the utility company alleges Southern California Gas delayed shutting off gas in the burn area for several days after the fire, making the blaze worse.

“SoCalGas’ design and actions caused gas leaks, gas fires, reignition of fires, gas explosions and secondary ignitions during the critical early stages of the Eaton Fire,” according to the suit.

The claim goes on to say this contributed to the spread of the fire and made firefighting and evacuation efforts more difficult.

In the second suit, the utility company alleges the Eaton Fire was made worse by the local government response, “including due to the failures of LASD, LACoFD, OEM and GENASYS in issuing timely evacuation alerts and notifications,” the claim reads.

The same filing says L.A. County was to blame for vegetation and overgrown brush in the Eaton Canyon area that fueled the blaze.

It also named the city of Pasadena and its utility system, Pasadena Water and Power, the city of Sierra Madre, Kinneloa Irrigation District, Rubio Cañon Land & Water Association, Las Flores Water Company and Lincoln Avenue Water Company as parties responsible for water systems running dry in Altadena as the fire broke out.

Edison says hydrants running dry compounded the extent of the disaster.

Those claims will be heard in the L.A. County Superior Court, which is also handling L.A. County’s lawsuit against SoCal Edison.

Edison itself is the subject of hundreds of lawsuits from survivors of the Eaton Fire, which could cost the company billions of dollars in settlements.

Edison has said its equipment likely sparked the Eaton Fire and filed these suits, in part, because it believes these various entities should share some of the blame for the disaster, which resulted in the destruction of thousands of buildings and the deaths of 19 people.

A compensation program Edison established for fire survivors who forgo suing the company has made settlement offers to more than 80 of those who applied.

A new organization is taking over production of the MLK Day Parade, almost 40 years after the first parade was held in South L.A. to commemorate the civil rights leader.

Bakewell Media, publisher of the Los Angeles Sentinel newspaper (a partner of The LA Local), was granted the permit in September to organize the parade for the first time by the Los Angeles Board of Police Commissioners. Formerly called the Kingdom Day Parade, the parade has been rebranded as the Los Angeles Official Martin Luther King Day Parade. The parade was previously produced and organized by Adrian Dove and the L.A. chapter of the Congress of Racial Equality California (CORE-CA).

With less than a week before the parade kicks off, LA Local reporter LaMonica Peters sat down with Danny Bakewell Jr., president and executive editor of the LA Sentinel, to discuss the details and what attendees should expect.

This Jan. 12 interview has been edited for brevity and clarity.

Why did you decide to produce the MLK Day Parade this year?

Bakewell: It all started because Adrian Dove, who was the previous promoter, had announced that he was retiring. When he announced he was retiring, LAPD, city council offices and other people said, “Hey, we still want to do the MLK Day parade. Would you guys be interested? You have the infrastructure to put it together.” And we said yes.

What’s different about this year’s production?

We’re going to start the parade with a singer performing “Lift Every Voice.” We’re going to play the message from Bernice King at the start of the show. Obviously, we have Cedric the Entertainer as our grand marshal to add the entertainment value, but the community has always been and will continue to be a major part of this parade.

Is ABC 7 covering the parade this year? 

It’s still going to be televised by ABC. We’re working diligently on how the show is going to be, but ABC has been a great partner.

What was the preparation for this parade?

Thanks to our corporate sponsors, we have a number of bands. The truth is, particularly in LAUSD at this time, and other school districts, they don’t have the funding to just get a bus and get here. I can’t say enough about Airbnb to Bank of America, all of our corporate sponsors, who are supporting all of the youth organizations.

Were there any unexpected challenges while preparing for this parade? 

This [The LA Sentinel office on Crenshaw Blvd.] is usually our command center during The Taste of Soul. It dawned on me last week that we’re going to be a mile away [from the parade route]. So, we made the decision to bring in a trailer to be our office at the corner of King and Crenshaw boulevards.

Any special guests this year besides the grand marshal?

I’m working on a surprise guest to be the singer for the national anthem. No matter what, we will give tribute to the Black national anthem “Lift Every Voice” as loud as we can next Monday.

What’s the long-term vision for this parade, if Bakewell Media continues to produce it?

We see the MLK Day Parade, and we want the world to see and expect to see this parade, the same way they see the Macy’s Parade, the Hollywood Parade or the Rose Parade. BET has come in this year as a partner. So there’s an opportunity to possibly do a national broadcast on BET. Not that we would lose our local television, but we see this as a major parade in this community and in the national African American community, celebrating the great work of Dr. Martin Luther King Jr. So, we are very excited.

Bits of conversation drift out of Aladdin Used Books as people lined up at the register with stacks of books.

The bustle of activity is bittersweet as the Koreatown bookstore will close its doors at the end of January after 13 years in the neighborhood.

Jina Lee, store manager, said declining sales at the Koreatown branch led to the decision to close the store. In recent years, staffing at the 5,000-square-foot store on the third floor of Madang Mall dropped from six to two, Lee said.

“This was a happy place for everyone,” she said, “but we were struggling.”

On a recent January afternoon, the shop looked lively as customers took advantage of the clearance sale on Korean and English books, CDs, DVDs and other media.

Koreatown resident Jin Lee wishes he visited the bookstore more often.

“It would have been great if it had been this crowded all the time,” Lee said. “But nowadays, people don’t read paper books and prefer devices, so it’s hard for all bookstores.”

Some customers traveled from as far as Orange County and the Inland Empire to visit one last time.

Minjung Kim, who moved from Koreatown to Fullerton five years ago, still made trips to the bookstore after she moved away.

“It’s the only place that sells this many new and used Korean books,” she said.

Each visit to the bookstore was important to David Artiga of Pomona, because it gave him a chance to connect with friends over literature.

“I feel like this is really negative for the community,” he said. “The importance of having a well-versed society, keeping in touch with literature and art is so important. And now this place is just going to be gone.”

South Korea-based Aladdin Used Books opened its first U.S. brick-and-mortar store in Los Angeles in 2013. The store carries around 50,000 new and used books, with a majority in Korean.

Customers will still be able to order books through Aladdin’s website after the store closes.

Ken Derick, a Koreatown resident, walked around the store aisles with a stack of books.

“It’s like we’re kind of moving towards a new technology, like everything’s virtual and online,” he said.

Longtime customer Anthony Kim said he’s enjoyed looking for gems in the English-language shelves.

“My Korean ability is rather limited but I’ve always enjoyed browsing their English language sections,” he said. “And now that I have a niece and nephew, their children’s book section has always been a great place to pick up new books for them.”

Valerie Laguna perused the shop’s CD section, a bygone experience in the era of streaming.

“I really like their CD collection and their literature collection they have in English,” she said.

“I was so sad about it, I immediately texted my friend,” she said. “I’ve gotten so many of my favorite books and my favorite CDs from this place. I feel like losing a place like this is just so sad and makes a huge dent in the community and culture.”

Less than a mile away on Western Avenue, Happy Bookstore owner Jung Jae-seung said it has been difficult for bookstores for some time now. His Korean-language bookstore is also struggling in an era when so many people have abandoned print media.

“It’s really about how long printed books can survive,” Jung said. “From that point of view, it’s hard to be optimistic.”

South L.A. or South Central? More than 20 years ago, that question came with high emotions for some residents who were sick of the stereotypes they saw in media coverage of their neighborhoods.

So in 2003, the Los Angeles City Council renamed the collection of communities south of the 10 freeway in an attempt to cut ties with the connotations of poverty and crime that some believe came to represent South Central after the turbulence of the 1980s and ‘90s. Today, you see South L.A. on official documents, maps and even historical and cultural districts.

Even though city officials moved to wipe away the old name, some locals never stopped calling the area South Central — a name that for them represents history, resilience and Black and Latino culture.

“I think it will always be South Central for its residents and for the people that were born and raised here,” said Evelyn Alfaro-Macias, a social worker who was raised in Historic South Central and whose office is on Hoover Street. “It means home. It means culture. People should respect the name South Central.”

What and where is South LA, anyway?

By the early 2000s, television news and pop culture had given South Central a reputation for violence and chaos that some were eager to shake.

Helen Johnson, a resident of Vermont Square, helped lead the campaign to change the name.

“I think the media can make you or either break you,” 72-year-old Johnson told reporters in 2003 after the city council approved the name change, according to the L.A. Times. “This is what you’ve done to us. You’ve broke us.”

Supporters of the change included then-Councilmember Janice Hahn, who is now a county supervisor and said at the time that the South Central name had become “mostly derogatory.”

L.A. Mayor Karen Bass, who was working then as executive director of the nonprofit Community Coalition, said the area’s image problem wasn’t just about its name.

“If the media paid a little more attention to covering positive things in the community, that will also help,” Bass said, according to an L.A. Times report.

The LA Local has reached out Bass and Hahn’s offices, as well as L.A. City Council President Marqueece Harris-Dawson.

The exact borders of South Los Angeles, or the area formerly known as South Central, are fuzzy.

The South Central name originally only applied to the neighborhood around Central Avenue south of downtown Los Angeles, but it spread west as populations grew.

City planning documents today designate a strip of neighborhoods between Interstate 110 and Arlington Avenue as South Los Angeles and tag the Central Avenue neighborhood as Historic South Central. Others, including academics and the city tourism board, use a map of South Los Angeles that stretches to the border of Culver City.

This is what the community told us

Some businesses in the area adopted the South L.A. name, notably South LA Cafe, the coffee shop that has grown to five locations and become a local institution.

More recently, some groups have made a concerted effort to embrace South Central, like the South Central Run Club or South Central Clips, an Instagram-based group that sells skatewear-inspired “South Central” apparel. (Even South LA Cafe today sells some merch with the South Central name.)

Several locals told The LA Local the official designation never changed anything for them.

“It’s South Central for me. That’s where my roots are,” April Brown said. “When you go anywhere across the country, across the world and you say South Central, they know exactly what you’re talking about.”

To Emily Amador, the name change erases the history of South Central, including “the Black migration that occurred, redlining that created what we know today to be South Central and the demographics, which are here today, which is Black and brown and undocumented.”

Ulysses Alfaro, who was born and raised in the Historic South Central neighborhood, said he uses South L.A. with people from out of town but South Central with locals.

South L.A. is a geographic designator, he said, but he considers South Central to be an identity: “That’s where the grinders are, the hard-working people that work their butts off, their asses off. The ones that keep the city running.”