
The Department of Justice has broadened its legal action against the real estate software firm RealPage to encompass six of the country’s top landlords.
The department initiated legal proceedings against RealPage in August, claiming that the company’s algorithms utilized private information from rival landlords to propose rent hikes that escalated housing expenses nationwide. Now, both federal and state prosecutors are asserting that six property owners were actively involved in this arrangement.
“While people throughout the country faced difficulties affording living spaces, the landlords identified in today’s case exchanged delicate data regarding rental rates and employed algorithms to collaboratively maintain high rental prices,” DOJ Acting Assistant Attorney General Doha Mekki expressed in a statement. “Today’s proceedings against RealPage and six prominent landlords strive to halt their practice of prioritizing earnings over individuals and to render housing more attainable for millions nationwide.”
The firms added to the lawsuit include Greystar Real Estate Partners LLC; Blackstone’s LivCor LLC; Camden Property Trust; Willow Bridge Property Company; Cortland Management LLC; alongside Cushman & Wakefield Inc. and Pinnacle Property Management Services LLC, which are co-owned. Together, these organizations control over 1.3 million units across 43 states, the DOJ noted.
Cortland Management, managing 80,000 leases, has already consented to a decree prohibiting it from deploying competitors’ confidential information for pricing strategies and from utilizing third-party pricing algorithms without oversight from a court-mandated supervisor.
The revised complaint against RealPage and the landlords asserts that the property operators openly exchanged information about their pricing tactics and configurations within RealPage’s YieldStar software amongst themselves. For instance, in September 2020, Camden’s revenue management director reportedly conversed with the Greystar revenue management team director to deliberate on their pricing strategy for the imminent quarter.
“Geystar’s director further disclosed its practices on accepting YieldStar rates and use of concessions,” per the lawsuit. “As the discussion unfolded, the two competitors exchanged more delicate intelligence on occupancy—including specific market areas—demand, and strategic concession utilization.”
The DOJ additionally claims that the landlords engaged in “user groups” orchestrated by RealPage where they deliberated on adjusting the algorithm’s pricing procedures along with their own rent strategies. The complaint encompasses numerous stories from these user group gatherings, where landlords allegedly divulged nonpublic information to rivals, and RealPage representatives reportedly advised landlords to “increase new and renewal pricing” and “trust the science” of RealPage’s algorithms.
The DOJ has been joined in the legal action by the attorneys general from ten states.