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Mass. joins Justice Dept. suit against property management platform
Alleges RealPage and several of its clients were involved in an “anticompetitive algorithmic pricing scheme that harms renters."
Massachusetts has joined the Justice Department and nine other states in the lawsuit against a property management software company and several of its clients, the office of Attorney General Andrea Campbell announced Tuesday.
The suit alleges that RealPage and several of its clients were involved in an “anticompetitive algorithmic pricing scheme that harms renters.” The platform and some of its clients violated the Sherman Antitrust Act by using RealPage software to collect actual rental data, analyze it, and suggest rent changes, the lawsuit alleges.
The announcement said the defendants “participated in an unlawful scheme to decrease competition among landlords in apartment pricing, harming millions of renters across the country. Together, these landlords operate more than 1.3 million units in 43 states and the District of Columbia.” The other states in the lawsuit are California, Colorado, Connecticut, Illinois, Minnesota, North Carolina, Oregon, Tennessee, and Washington.
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Massachusetts “seeks to end the illegal conduct, restore competition in the rental market, and recover civil penalties of up to $5,000 per each violation committed by the defendants,” the attorney general’s office said in the announcement.
RealPage, which announced last month that the Department of Justice had terminated it’s investigation of its multifamily rental housing practices, denied any wrongdoing. Spokesperson Jennifer Bowcock added in an email: “It is also unfortunate that [the] Attorneys General of Massachusetts and Illinois are joining this flawed civil case that seeks to blame pro-competitive technology that has been used responsibly for years. Lack of supply is the root cause of the housing affordability crisis.”
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Other defendants include Greystar Real Estate Partners LLC; Blackstone’s LivCor LLC; Camden Property Trust; Cushman & Wakefield Inc. and Pinnacle Property Management Services LLC; Willow Bridge Property Company LLC; and Cortland Management LLC.
Massachusetts, however, is suing only five of these six firms. The Justice Department announced a proposed consent decree that, if approved by the court, would resolve its claims against Cortland and would require the company to cooperate with the government, stop using its competitors’ sensitive data to train or run any rent-setting computer model, and stop soliciting, disclosing, or using any competitively sensitive information with any other property managers as part of setting rents. As a result, Massachusetts did not sue Cortland, according to Campbell’s office.
More in the courts
Greystar said that it was disappointed to be named in the suit and that the company would vigorously defend itself against the claims.
Camden Property Trust, which owns and operates 172 properties containing 58,250 units across the United States, also issued a statement vowing to fight the claim: “Much of the Department of Justice claims arise around actions that were taken during the COVID-19 pandemic. This was a time when Camden made the decision not to increase renewal rates, to waive late fees, to freeze evictions, and to take the unprecedented step of providing over $10 million in cash directly to our residents to assist them during that uncertain period, no strings attached. In fact, this support came before federal, state, or local governments had provided any form of financial assistance due to the pandemic.”
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A spokesman for Cushman & Wakefield said in a statement, “Cushman & Wakefield/Pinnacle should not have been named in this amended complaint. We do not operate as a “landlord” — we do not own any buildings or set pricing, we simply manage properties. We are not engaged in any of the behaviors the DOJ seeks to prohibit.”
Other defendants did not immediately return requests for comment.
“As residents continue to grapple with rising costs including high rents, our office will seek to hold accountable those who betray renters’ trust and undermine a fair and competitive housing market,” Campbell said in the announcement. “This lawsuit against RealPage and the named landlords is one step towards that accountability.”
“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,” Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division said in the release. “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.”
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