Diossa Invested $30 Million of Pension Funds in a Firm Linked to Algorithm-Driven Company Tied to Rent Increases
James Diossa, General Treasurer PHOTO: FILE
Starting in 2022, investigations, lawsuits, and Congressional reviews targeted RealPage, an algorithm-driven software company accused of driving up rental costs nationwide. The company RealPage is owned by Thoma Bravo.
As investigations and allegations mounted, Rhode Island General Treasurer James Diossa green-lighted a $30 million investment by the Employees’ Rhode Island Retirement Fund in Thoma Bravo in 2024.
Diossa refuses to answer questions about the investment.
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His spokesperson seemed unaware of the issues or, initially, of a federal lawsuit against RealPage.
GoLocal asked Diossa’s spokesperson, Carla Rojo, about the investment in Thoma Bravo and the review process.
In response to GoLocal’s questions, Rojo wrote on Monday:
The staff recommendation was approved by the State Investment Commission in May 2024, several months before a complaint [U.S. Department of Justice lawsuit] was filed.
All proposed investments undergo thorough due diligence and careful deliberation in accordance with approved investment policy statements and established compliance procedures.
If you need anything else, please let me know.
Thanks!
Carla C. Rojo
Director of Communications
Office of RI General Treasurer James A. Diossa
GoLocal asked in follow-ups about the “due diligence and careful deliberation” and pointed out that a basic Google search would unveil dozens of articles, United States Senate action, actions by 17 members of the House of Representativem a civil lawsuit by renters, and coverage of federal investigations by both the U.S. Federal Trade Commission and the United States Department of Justice prior to the approval of the investment by Diossa’s team.
Rojo is correct that the U.S. Department of Justice lawsuit, joined by eight states, was filed shortly after the pension fund investment, but the investment occurred years after the press coverage, Congressional action, and the announcement of a Department of Justice investigation.
Rojo refused to answer multiple questions, including, “Does Treasurer Diossa think that the AI-driven tech companies like RealPage are not a factor in spiraling rents in America?”
It should be noted that during these investigations and lawsuits, RealPage has repeatedly denied engaging in any illegal activity.
Just a couple of months after the state’s investment, the U.S. Department of Justice filed a civil lawsuit against RealPage.
“RealPage has built a business out of frustrating the natural forces of vigorous competition,” said Assistant Attorney General Jonathan Kanter at a news conference in August of 2024 with top department officials. “The time has come to stop this illegal conduct.”
“We learned that the modern machinery of algorithms and AI can be even more effective than the smoke-filled rooms of the past,” Kanter said in 2024, referring to artificial intelligence. “You don’t need a Ph.D. to know that algorithms can make coordination among competitors easier.”
IMAGES: Headline of ProPublica News Articles and a Copy of a Letter by Then-U.S. Senator Sherrod Brown (D-OH)
Members of Congress Cite Claims That RealPage Has Created a “Cartel”
In November of 2022, ProPublica reported:
Seventeen Democratic members of the U.S. House of Representatives sent a letter Monday to the Department of Justice and the Federal Trade Commission asking the agencies to investigate RealPage’s rent-setting software. In an Oct. 15 story, ProPublica detailed how RealPage’s pricing algorithm uses competitor data to suggest new prices daily for available apartments.
In the letter, Reps. Jesús “Chuy” García and Jan Schakowsky, both from Illinois, and other Democratic leaders said that if big property managers and RealPage formed a cartel to artificially inflate rents and decrease the supply of apartments, they could face “potential criminal prosecution.”
But the genesis of the investigations into RealPage’s business strategy and technology goes back five years earlier. In 2017, Steve Winn, RealPage’s then-CEO, talked about how leaving apartments empty could help drive profitability.
“During an earnings call in 2017, Winn said one large property company, which managed more than 40,000 units, learned it could make more profit by operating at a lower occupancy level that ‘would have made management uncomfortable before,’ he said,” reported ProPublica.
ProPublica recapped the RealPages business model in a 2022 article:
On a summer day last year, a group of real estate tech executives gathered at a conference hall in Nashville to boast about one of their company’s signature products: software that uses a mysterious algorithm to help landlords push the highest possible rents on tenants.
“Never before have we seen these numbers,” said Jay Parsons, a vice president of RealPage, as conventiongoers wandered by. Apartment rents had recently shot up by as much as 14.5%, he said in a video touting the company’s services. Turning to his colleague, Parsons asked: What role had the software played?
The chair of a U.S. Senate committee asked the Federal Trade Commission on Tuesday to review whether a Texas-based property tech company’s rent-setting software violates antitrust laws.
The move comes after ProPublica published an investigation Oct. 15 into RealPage’s pricing software, which suggests new rents daily to landlords for all available units in a building. Critics say the software may be helping big landlords operate as a cartel to push rents above competitive levels in some markets.
“Alarmingly, recent reporting by ProPublica highlighted that RealPage’s algorithm-based price optimization software, YieldStar, is being used by a growing number of property managers and landlords, potentially impacting pricing and the supply of homes in the rental market,” said the letter signed by U.S. Sen. Sherrod Brown, the Ohio Democrat who chairs the Senate Committee on Banking, Housing, and Urban Affairs. “Renters should have the power to negotiate fairly priced housing, free from illicit collusion and deceptive pricing techniques.”
The U.S. Department of Justice civil lawsuit against RealPage was settled after the Trump administration took office in 2025. The company admitted to no wrongdoing and paid no penalty.
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