DOJ charges landlords with rent collusion

The U.S. Department of Justice filed a complaint Jan. 7 against six of the nation’s largest landlords accusing them of colluding in algorithmic pricing schemes that result in overcharging renters.

That complaint is part of the Justice Department’s antitrust lawsuit filed in August against RealPage, a property management software company.

According to the DOJ, RealPage contracts with competing landlords who agree to share nonpublic, competitively sensitive information about their apartment rental rates to train and run RealPage’s algorithmic pricing software.

The lawsuit accuses RealPage of using that scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software that landlords use to price apartments.

The DOJ says, “RealPage’s alleged conduct deprives renters of the benefits of competition on apartment leasing terms and harms millions of Americans.”

The complaint filed last week charges these property management companies with collusion in rent pricing: Greystar Real Estate Partners, Blackstone’s LivCor, Camden Property Trust, Cushman & Wakefield and Pinnacle Property Management Services (Cushman), Willow Bridge Property Co., and Cortland Management.

Those companies operate more than 1.3 million units in 43 states.

An analysis by the Washington Post published Jan. 8 identifies projects all over the D.C. region managed by companies named in the lawsuit. That includes the following properties in the Annandale/Mason District area:

• Ravensworth Apartments, 4237 Ravensworth Road, Annandale.
• Arbor Park, 6340 Wingate Street, Lincolnia.
• Curve 6100, 6100 Lincolnia Road, Lincolnia.
• Olde Salem Village, 6084 Argyle Drive, Culmore.
• East Falls Apartments, 2913-A Peyton Randolph Drive, Seven Corners.
• The Loren, 6410 Arlington Boulevard, Seven Corners.
• Three Collective, 5203 Leesburg Pike, Bailey’s Crossroads.
• Sullivan Place, 5575 Vincent Gate Terrace, Bren Mar Park.

“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,” said Acting Assistant Attorney General Doha Mekki of DOJ’s Antitrust Division.

“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,” Mekki said.

According to the lawsuit, the six companies actively participated in a scheme to set their rents using each other’s competitively sensitive information through common pricing algorithms. 

In one example cited in the lawsuit, Greystar supplied Camden with information about recent renewal rates, its approach to pricing for the upcoming quarter, its acceptance of RealPage’s pricing recommendations, use of concessions, and competitively sensitive information about occupancy.

The suit says one landlord raised rents more than 25 percent over 11 months after it started using RealPage’s revenue management technology.

A report released by the White House in December found insufficient competition in the housing industry leads to significantly higher costs for renters.

“Anticompetitive pricing costs renters in algorithm-utilizing buildings an average of $70 a month,” the report states. That resulted in a total cost to renters of $3.8 billion in 2023.