DOJ sues RealPage, landlords for colluding to inflate rents: Houston renters impacted
HOUSTON - The U.S. Department of Justice (DOJ), joined by ten state attorneys general, has filed an amended antitrust lawsuit against RealPage Inc. and six large landlords, alleging they colluded to inflate rents using algorithmic pricing software, harming millions of renters nationwide. The lawsuit has significant implications for renters in the Greater Houston area, where many of the defendant landlords operate properties.
The complaint, filed in the Middle District of North Carolina, accuses RealPage and the landlords of using its revenue management software to coordinate rental prices, stifling competition, and driving up costs for renters. The defendants include major property management firms such as Greystar Real Estate Partners LLC, Camden Property Trust, LivCor LLC, Cushman & Wakefield Inc., Pinnacle Property Management Services LLC, and Willow Bridge Property Company LLC.
The lawsuit alleges that RealPage’s software, including YieldStar and AIRM, collects non-public, competitively sensitive rental data from landlords, such as lease terms, rents, and occupancy rates. This data is used to make pricing recommendations that align rents across competing properties, reducing competitive pressure to lower prices or offer concessions.
"These defendants are alleged to have conspired to drive rents up for their own benefit, harming millions of American renters," said Assistant Attorney General Jonathan Kanter.
The DOJ claims that this practice allowed landlords to artificially inflate rents, including in markets like Houston, where many properties managed by the defendants are located.
Cortland Management LLC, initially a defendant, has agreed to settle with the DOJ. The proposed settlement requires Cortland to discontinue its use of RealPage’s pricing software, cooperate with investigators, and implement reforms to prevent future collusion.
"This lawsuit seeks to hold accountable those who have sought to profit from anti-competitive practices at the expense of hardworking people," said Massachusetts Attorney General Andrea Joy Campbell. Some companies, such as Greystar and Camden, have released statements in response to the claims.
Get news, weather and so much more on the new FOX LOCAL app
Legal analysts suggest the case could set a significant precedent for the rental housing industry. FOX 26 Senior Legal Analyst Chris Tritico said the case could redefine how property managers use revenue management software and set rental prices.
"I would expect the DOJ will be saying that if you artificially raise your prices, you now have to reduce them back to where they should've been all along," Tritico said. "I would expect that's one of the things the DOJ would want to see happen in a settlement."
The DOJ contends that RealPage’s practices distorted free-market competition and allowed landlords to maximize rents, even during economic downturns. The lawsuit also alleges that RealPage controls about 80% of the commercial revenue management software market, reinforcing its monopoly through exclusive access to sensitive industry data.
The Source: FOX 26 Reporter Sherman Desselle spoke with FOX 26 Senior Legal Analyst Chris Tritico about the lawsuit.