The U.S. Department of Justice has launched a high-profile antitrust lawsuit against six major landlords, accusing them of manipulating rental prices through a sophisticated software platform.
At a Glance
- DOJ sues six large landlords for alleged rent price manipulation using RealPage software
- Lawsuit involves over 1.3 million rental units across 43 states and D.C.
- Landlords accused of sharing sensitive data and using algorithms to keep rents artificially high
- Action aims to make housing more affordable by addressing anti-competitive practices
DOJ Takes Aim at Alleged Rental Price Scheme
In a move that could reshape the rental housing market, the U.S. Department of Justice has filed a lawsuit against six major landlords, accusing them of colluding to manipulate rental prices. The lawsuit alleges that these companies, which collectively manage over 1.3 million rental units across 43 states and the District of Columbia, used RealPage’s management software to share critical rental data and artificially inflate rent prices.
The landlords named in the lawsuit include prominent companies such as Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc, Willow Bridge Property Company LLC, and Cortland Management LLC. These firms are accused of using RealPage’s algorithm to align prices and avoid competition, effectively distorting the market and keeping rents artificially high.
Justice Department Sues RealPage for Algorithmic Pricing Scheme that Harms Millions of American Rentershttps://t.co/ogsjWvVyO0
— U.S. Department of Justice (@TheJusticeDept) August 23, 2024
Allegations of Collusion and Data Sharing
The Justice Department’s complaint paints a picture of widespread collusion among the accused landlords. The lawsuit alleges that these companies shared sensitive information on rents, occupancy rates, renewal rates, and pricing strategies. This data sharing reportedly went beyond the use of RealPage’s software, with landlords allegedly conducting “call arounds” to exchange information and participating in user groups to discuss pricing tactics.
“While Americans across the country struggled to afford housing, the landlords named in today’s lawsuit shared sensitive information about rental prices and used algorithms to coordinate to keep the price of rent high,” Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division said.
The lawsuit claims that by using RealPage’s algorithm and sharing competitive information, these landlords were able to synchronize their pricing strategies, effectively reducing competition in the rental market. This coordination allegedly allowed them to maintain higher rent prices than would be possible in a truly competitive market.
The accused landlords have largely denied the allegations. Greystar, one of the largest property management companies in the United States, stated, “Greystar has and will conduct its business with the utmost integrity. At no time did Greystar engage in any anti-competitive practices.”
Camden Property Trust attributed the claims to actions taken during the COVID-19 pandemic, while others have not yet responded to requests for comment.
“It’s past time to stop scapegoating RealPage — and now our customers — for housing affordability problems when the root cause of high housing costs is the under-supply of housing,” Jennifer Bowcock, a spokesperson for RealPage, said.
In a significant development, Cortland Management LLC has agreed to enter into a proposed settlement with the DOJ. This consent decree requires Cortland to cease using competitors’ data for pricing and to cooperate with the Justice Department’s ongoing investigation. The proposed settlement will be subject to a 60-day public comment period before a final judgment is made.
