DENVER – The U.S. Justice Department is suing several large landlords for allegedly coordinating to keep Americans’ rents high by using both an algorithm to help set rents and privately sharing sensitive information with their competitors to boost profits.
The department, along with 10 states including North Carolina, Tennessee, Colorado and California, is accusing six landlords that collectively operate more than 1.3 million units in 43 states and the District of Columbia of scheming to avoid lowering rents.
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While the housing crisis has been assigned several causes, including a slump in homes built over the last decade, the Justice Department’s lawsuit claims major landlords are playing a part.
“I think it confirms probably what a lot of people were thinking, especially post-COVID, in terms of what the housing market seemed like from a rental perspective, how difficult it was, how expensive it was,” Board Certified Real Estate Attorney Zach Roth, said.
The lawsuit accuses the landlords of sharing sensitive data on rents and occupancy with competing firms via email, phone calls or in groups. The information shared allegedly included renewal rates, how often they accept an algorithm’s price recommendation, the use of concessions such as offering one month free, and even their approach to pricing for the next quarter.
The landlords accused in the lawsuit include:
- Greystar Real Estate Partners LLC (Greystar)
- Blackstone’s LivCor LLC (LivCor)
- Camden Property Trust (Camden)
- Cushman & Wakefield Inc and Pinnacle Property Management Services LLC (Cushman)
- Willow Bridge Property Company LLC (Willow Bridge)
- Cortland Management LLC (Cortland)
Florida is not a part of the lawsuit. However, two of the landlords, Greystar and Cushman and Wakefield, own at least 21 apartment complexes across Jacksonville. Those properties include:
Greystar (owned or managed by)
- 54 Magnolia Apartments
- Presidium Park
- Presidium Regal
- The Point at Tamaya
- SUR Southside Quarter
- Vista Brooklyn Apartments
- Avenue Royale
- Broadstone Riverhouse
- Eden at Kendall West
- The Four at Deerwood
- The Views at Harbortown
Cushman and Wakefield (owned or managed by)
- The Reserve at St. Johns Rivers
- The Mirage at Southpoint
- The Landings at Parkview
- Palms at Beacon Pointe
- The Element at River Pointe
- The Ridley
- Townsend Apartments
- Oasis at Mandarin
- The Marley at Trout River
- Houston Street Manor
Reggie Willson, who rents an apartment in Jacksonville, said he was “not surprised” when he learned about the lawsuit.
“I think it’s just a bad look for people who are trying to just make an honest living and have somewhere to stay,” Willson said. “It just, it just really turns off the market.”
The landlord Greystar Real Estate Partners LLC declined a request for comment from The Associated Press, but published an unsigned statement on its website.
“Greystar has and will conduct its business with the utmost integrity. At no time did Greystar engage in any anti-competitive practices,” the statement read. “We will vigorously defend ourselves in this lawsuit.”
The Justice Department said one of the six landlords agreed to cooperate with prosecutors. The proposed settlement would restrict how the company can use its competitors’ data and algorithms to set rents.
“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,” said Doha Mekki, the acting assistant attorney general for the department’s antitrust division in Tuesday’s press release.
Thoe six landlords were added to an existing lawsuit against RealPage, which runs an algorithm that recommends rental prices to landlords. Prosecutors say the algorithm uses sensitive competitive information, allowing landlords to align their prices and avoid competition that would otherwise push down rents.
Jennifer Bowcock, RealPage’s senior vice president for communications, said in a statement to the AP that their software is used on fewer than 10% of rental units in the U.S., and that their price recommendations are used less than half the time.
“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,” Bowcock said.
Roth said the judgment doesn’t provide any retroactive relief for renters— essentially, landlords are just being asked not to do it again.
“The problem with the mechanism is the only way to truly make it right is to reduce rents of the people that suffered as a result of this price fixing. But that’s never going to be a practical outcome. So anything in the future is nothing more than you mentioned, as a slap on the wrist in the eyes of the people who have suffered as a result,” Roth said.
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Bedayn is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.