New Jersey Attorney General Matt Platkin and the state’s Division of Consumer Affairs filed a lawsuit against property management software company RealPage Inc. and 10 corporate landlords for allegedly colluding in a rent-raising scheme.
According to the lawsuit, RealPage and the landlords allegedly agreed to set rents for multifamily housing properties statewide by using the company’s algorithmic pricing software. The landlords exchanged non-public information to align their prices.
The lawsuit alleged the defendants engaged in multiple violations of the federal Sherman Act, the New Jersey Antitrust Act, and the New Jersey Consumer Fraud Act. Platkin, a Democrat, acknowledged his state has a shortage of over 200,000 affordable rental homes, while the average rents were among the highest in the nation.
“The defendants in this case unlawfully lined their pockets at the expense of New Jersey renters who struggled to pay the increasingly unlivable price levels imposed by this cartel,” said Platkin. “Today we’re holding them accountable for unlawful conduct that fueled the state’s affordable housing crisis and deprived New Jerseyans of their fundamental right to shelter.”
Along with the Texas-based RealPage, the complaint names Morgan Properties Management Company LLC; AvalonBay Communities Inc.; Kamson Corp.; LeFrak Estates LP and its subsidiary, Realty Operations Group LLC; Greystar Management Services LLC; Aion Management LLC; Cammeby’s Management Co. of New Jersey LP; Veris Residential, Inc.; Russo Property Management LLC; and Bozzuto Management Company. The complaint also references additional New Jersey landlords as unnamed co-conspirators.
The lawsuit seeks several remedies, including the appointment of a corporate monitor—at defendants’ expense—to ensure implementation of all structural or practice remedies ordered by the Court and to not engage in further unlawful conduct, along with equitable relief, civil penalties, and damages.
All landlords must and do gather information regarding their competitors’ properties and rents. It’s the only way one can compete successfully. As an owner of investment properties I find I must as the prospective tenants will mislead me if I don’t know. If you don’t believe it try not doing it.
There are two types of people in the world, those that work hard to earn money and those that see other people earning money and work hard to take that money from them. If the individuals and groups sueing, spent that effort in building additional rental housing, they would actually help cure the shortage and solve the problem. By taking the route they are on, they discourage other people from renting their multiple properties, actually making the problem worse.
The laws simply haven’t kept up with the pace of technology. Market-based pricing has always been the norm—technology just enables it to happen faster and more efficiently. Unless there is clear evidence of collusion, where parties explicitly agree to set prices at a fixed level, this is not a violation of the Sherman Act. What we’re seeing is competitive pricing behavior. The same dynamic would apply in a declining market, where landlords would undercut each other to remain competitive.
Having lived at one of the named property management’s developments I can say what was being done annually for the 5 yrs I lived there was outrageous! Rent was increased max amount every year started at $1650/mo and 5yrs later paying $2195/mo. Couldnt. afford to move since all the other developments followed the same price gauging guidelines. and that is where this Real Page stuff becomes illegal—- its collusion. This is a terrible way to run developments; basically forcing good tenants to stay and pay cuase everywhere else is charging the same. luckily I found a private owner rental.