DOJ Adds 6 Major Landlords to Lawsuit Over Algorithmically Inflating Americans’ Rents

The Department of Justice has expanded its suit against the existent property bundle institution RealPage to see six of the nation’s largest landlords.

The section sued RealPage successful August, alleging that the company’s algorithms drew connected nonpublic accusation from competing landlords to urge rent increases that drove lodging costs up crossed the nation. Now, national and authorities prosecutors are accusing six existent property companies of being progressive participants successful the scheme.

“While Americans crossed the state struggled to spend housing, the landlords named successful today’s suit shared delicate accusation astir rental prices and utilized algorithms to coordinate to support the terms of rent high,” DOJ Acting Assistant Attorney General Doha Mekki said successful a statement. “Today’s enactment against RealPage and six large landlords seeks to extremity their signifier of putting profits implicit radical and marque lodging much affordable for millions of radical crossed the country.”

The companies added to the suit are Greystar Real Estate Partners LLC Blackstone’s LivCor LLC; Camden Property Trust; Willow Bridge Property Company; Cortland Management LLC; and Cushman & Wakefield Inc. and Pinnacle Property Management Services LLC, which are jointly owned. Collectively, the companies run much than 1.3 cardinal units successful 43 states, the DOJ said.

Cortland Management, which oversees 80,000 rental units, has already agreed to a consent decree that would barroom it from utilizing competitors’ delicate information to powerfulness immoderate pricing models and from utilizing third-party pricing algorithms without supervision from a court-appointed monitor.

The amended complaint against RealPage and the landlords alleges that the spot owners straight shared accusation astir their pricing plans and settings wrong RealPage’s YieldStar bundle with each other. For example, successful September 2020, Camden’s manager of gross absorption allegedly spoke with the manager of Greystar’s gross absorption squad to sermon however they planned to attack pricing successful the coming quarter.

“Geystar’s manager further disclosed its practices connected accepting YieldStar rates and usage of concessions,” according to the lawsuit. “As the speech continued, the 2 competitors shared further highly-sensitive accusation connected occupancy—including successful circumstantial markets—demand, and the strategical usage of concessions.”

The DOJ besides alleges that the landlords participated successful “user groups” hosted by RealPage during which they discussed however to modify the algorithms’ pricing methodologies arsenic good arsenic their ain rent strategies. The ailment includes a litany of anecdotes from these idiosyncratic radical sessions successful which landlords allegedly shared nonpublic accusation with their competitors and RealPage employees allegedly told landlords to “push up caller and renewal pricing” and “trust the science” of RealPage’s algorithms.

The DOJ has been joined successful the suit by the attorneys wide from 10 states.