The U.S. Justice Department has filed an antitrust lawsuit against six major landlords, accusing them of using an algorithm to artificially inflate rent prices across the country.
At a Glance
- DOJ sues six large landlords for alleged price-fixing using RealPage’s algorithm.
- Lawsuit claims landlords shared sensitive data to coordinate rent prices.
- Over 1.3 million rental units across 43 states affected.
- Action aims to address housing affordability crisis.
DOJ Takes Action Against Alleged Rent Price Manipulation
The U.S. Department of Justice has launched a significant legal battle against six prominent landlords, accusing them of engaging in a sophisticated scheme to keep rental prices artificially high. The lawsuit, filed in North Carolina, alleges that these landlords, who collectively manage over 1.3 million rental units across 43 states and the District of Columbia, used an algorithm provided by RealPage to coordinate pricing and suppress market competition.
At the heart of the lawsuit is the accusation that these landlords shared sensitive information such as rental rates, occupancy statistics, and pricing strategies through RealPage’s property management software. This data was then allegedly used by the algorithm to propose pricing, effectively enabling collusion among competitors and driving rents upward across the sector.
Several large landlords in the U.S. are being sued by the Justice Department for allegedly coordinating to keep Americans’ rents high. Here’s what to know. https://t.co/YE05XLWD1X
— FOX 7 Austin (@fox7austin) January 8, 2025
The Defendants and Their Response
The landlords named in the lawsuit include industry giants 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 companies operate in various cities including Charleston, Chicago, Dallas, Houston, and Atlanta.
“Greystar has and will conduct its business with the utmost integrity. At no time did Greystar engage in any anti-competitive practices,” Greystar stated in response to the allegations.
Camden Property Trust has also denied the allegations, attributing the claims to actions taken during the national health crisis. Meanwhile, Cortland has agreed to cooperate with the DOJ and enter into a proposed settlement. The remaining three landlords have not responded to requests for comment.
RealPage’s Role and Defense
RealPage, the company providing the algorithm at the center of this controversy, has stated that the DOJ has closed its criminal probe into pricing practices. They maintain that the remaining lawsuits are based on misinformation. Jennifer Bowcock, a spokesperson for RealPage, defended the company’s position, stating, “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.”
RealPage claims their software is used on less than 10% of U.S. rental units and that their price recommendations are not always followed. However, the DOJ contends that the impact of this alleged collusion is significant enough to warrant legal action.
Implications for the Rental Market
The lawsuit comes at a time when housing affordability is a major concern across the United States. By challenging these practices, the DOJ aims to break the cycle of rent inflation and enhance housing affordability across the sector. The case has garnered support from multiple state Attorneys General, with ten states and commonwealths joining as co-plaintiffs.
As the case progresses, it could have far-reaching implications for the rental market, potentially reshaping how large landlords use data and algorithms to set prices. The outcome may lead to increased scrutiny of property management software and pricing practices across the industry.
Sources:
- US Justice Department accuses six major landlords of scheming to keep rents high
- Justice Department Sues Six Large Landlords for Algorithmic Pricing Scheme that Harms Millions of American Renters
- DOJ Sues 6 Landlords Over Alleged Algorithm Rent Pricing Scheme
