The US Department of Justice (DOJ) and 10 state attorneys general filed an amended complaint in its antitrust lawsuit against the software company RealPage to sue six of the nation’s largest landlords for allegedly using algorithmic pricing schemes to inflate the costs of rental housing.
The amended complaint alleges the landlords — Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc. and Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC, and Cortland Management LLC — schemed to decrease competition among landlords in apartment pricing. The DOJ noted the six companies are the landlords for more than 1.3 million units in 43 states and the District of Columbia.
The companies were also accused of participating in “user groups” hosted by RealPage where they discussed how to modify the software’s pricing methodology, as well as their own pricing strategies.
The DOJ also filed a proposed consent decree with landlord Cortland that requires it to cooperate with the government, stop using its competitors’ sensitive data to set rents and stop using the same algorithm as its competitors without a corporate monitor.
During his aborted re-election campaign, President Biden blamed “corporate greed” for rising costs in rental housing, although he stopped short of identifying specific corporations.
“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,” said Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “Today’s action against RealPage and six major landlords seeks to end their practice of putting profits over people and make housing more affordable for millions of people across the country.”
The co-plaintiffs in the case are the attorneys general of California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee and Washington.
The proposed consent decree, along with the competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed consent decree during a 60-day comment.
Housing costs are up, interest rates are up, insurance costs are up, property taxes are up, building costs and materials are up. The net result of all of this is, rents have to be higher. As a landlord, I resent the demonizing of housing providers. We respond to market forces and competition means if I charge too much in my market, people will rent from someone else. It’s the free market.. STOP weaponizing the DOJ against landlords. It’s not our fault that the endless government induced inflation is making the cost of everything higher.
Amen Lisa! For the most part when the government is run by Democrats their legislative actions give rise to inflation and more governmental control and governmental funding addictions. When their programs are harmful they blame it on the private sectors time and time again. Its a never ending grab for socialistic power and control. Landlords that earn a living in the real world of housing are a nice target to cover up their incompetency.
I get your point about landlords being portrayed as the enemy, but this antitrust lawsuit is not about honest landlords raising rents to cover rising expenses. It’s about corporate landlords, possibly REICs, pushing out smaller landlords and intentionally screwing millions of tenants by price fixing and artificially making the rental market look higher. The cost of living is bad enough, post-Covid, without price gouging! It has to be stopped. For my adult children’s sake and others like them trying to get by, I’m glad the DOJ is taking action.
Hi Lisa, these lawsuits are being pursued against 6 extremely large LLC’s who combined own millions of SFR units, these LLCs have intentionally and steadily been increasing rental prices on all their units and price fixing with each other. The lawsuits are not pursuing smaller Landlord / Investment property owners. These LLCs are some of the largest property owners in the US. They began buying up distressed properties in 2008 and have been buying fair market value properties ever since, they have created massive SFR portfolios, management companies to service these properties, then packaged and sold the concept and product to Wall Street as Rental Backed Securities for TIC Investment groups. It is the first time that this strategy has been used for Single Family Residential Properties, clearly it is proving to be an effective profit generator for these groups and it has had and continues to have detramental effect on the US housing and rental housing affordability and supply.
6 lanlords all using the same approach for pricing? isn’t that similar to price fixing?
One key peice of information has been left out of this discussion. Are the rents being charged by these companies in fact unjustifiably high? If yes, good for the DOJ. If no, this is yet more political grandstanding and meddling in the economy that will do more damage than good in the long run.
They need to look at Realtors for price fixing