The Justice Department sues major landlords for allegedly employing anti-competitive strategies to manipulate rental prices through RealPage software.
At a Glance
- The DOJ targets landlords for alleged rent price-fixing schemes using RealPage algorithms.
- Landlords implicated include Greystar, Camden Property Trust, and others, affecting over 1.3 million units.
- RealPage allegedly facilitated data sharing among landlords to suppress competition.
- The lawsuit aims to make rental housing more affordable for Americans.
Price-Fixing Allegations
The U.S. Justice Department has filed a lawsuit against major landlords, claiming they allegedly collaborated to artificially inflate rents. This was reportedly achieved through an algorithm developed by RealPage, which landlords used for sharing sensitive data that influenced rental pricing strategies. This lawsuit represents an effort to rein in practices that may have contributed to high rental costs, affecting around 1.3 million housing units across various states.
These landlords stand accused of directly communicating about rent rates and occupancy. Allegedly, they conducted “call arounds” to share competitive information and participated in user groups focused on pricing strategies within the RealPage platform. This cooperation among competitors purportedly led to a synchronized pricing strategy, preventing natural market competition.
Wider Implications and Legal Actions
The lawsuit extends to companies such as Greystar Real Estate Partners LLC, Camden Property Trust, and others, impacting housing affordability significantly. The accusations suggest a breach of competitive practices, alleging landlords used shared data to keep rents artificially high, which violated antitrust laws across multiple states, including Illinois and Massachusetts.
“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
RealPage reportedly defended itself, claiming its software is not primarily accountable for high rents given its application in less than 10% of U.S. rental units. They argue their solutions align with market demands rather than manipulating the market. However, the DOJ’s move indicates otherwise, aiming to promote fair practices and help stabilize runaway living expenses.
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
Conclusion and Future Developments
The consent agreement proposal with Cortland Management LLC indicates potential changes, such as ceasing to use competitive data for pricing determinations. The consent decree would undergo a public comment phase before any regulatory enforcement. This legal pursuit underscores the government’s endeavor to ensure a level playing field and protect citizens’ welfare from concealed corporate tactics.
The DOJ’s commitment to resolving these issues reflects the underlying need for accountability among powerful corporate entities in a market integral to everyday life. The lawsuit remains under judicial consideration, with further statements from implicated parties pending settlement negotiations.
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
