The Department of Justice takes aim at major landlords in a lawsuit alleging a rent inflation conspiracy.
At a Glance
- DOJ sues six large landlords for alleged antitrust conspiracy to inflate rental prices
- Lawsuit involves over 1.3 million rental units across 43 states and D.C.
- Landlords accused of using RealPage’s algorithm and sharing sensitive data to coordinate pricing
- Action aims to dismantle practices and make housing more affordable
DOJ Targets Major Landlords in Antitrust Lawsuit
The U.S. Department of Justice has launched a significant legal offensive against six prominent landlords, accusing them of engaging in an antitrust conspiracy to artificially inflate rental prices. 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 sophisticated algorithms and shared sensitive information to coordinate rental prices, effectively stifling competition in the housing market.
The defendants 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 are alleged to have used RealPage’s software platform to exchange confidential information about rental pricing strategies, occupancy rates, and other sensitive data.
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
Alleged Collusion and Its Impact on Renters
The Justice Department contends that the landlords’ actions have had a detrimental effect on millions of American renters. By allegedly coordinating their pricing strategies and sharing competitive information, these companies are accused of artificially inflating rents and reducing market competition. The lawsuit claims that the landlords communicated directly about rents and occupancy, conducted “call arounds” to share sensitive information, and participated in RealPage user groups to discuss pricing strategies.
“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,” Acting Assistant Attorney General Doha Mekki said.
The DOJ’s action is part of a broader effort to address the ongoing housing affordability crisis in the United States. By targeting these alleged anti-competitive practices, the Justice Department aims to foster a more competitive rental market and ultimately reduce the financial burden on American renters.
Central to the lawsuit is RealPage, a company that provides an algorithm for setting rental prices. The DOJ alleges that RealPage’s software enabled landlords to align their prices and avoid competition. However, RealPage has defended its practices, stating that its software is used on less than 10% of U.S. rental units and that their price recommendations are not always followed by landlords.
The accused landlords have responded differently to the allegations. Greystar and Camden have denied any wrongdoing, with Camden attributing the claims to actions taken during the COVID-19 pandemic. Cortland has agreed to cooperate with the DOJ and enter into a proposed settlement, which will be subject to a 60-day public comment period before a final judgment is made.
