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Washington D.C.’s Attorney General Brian Schwalb filed a lawsuit on Wednesday alleging that 14 of the city’s largest landlords colluded with a property management software company to inflate rental prices across the city artificially.
According to a Nov. 1 ArsTechnica report, the civil complaint accuses the landlords of conspiring with RealPage, a Texas-based provider of rent pricing software, of fixing rental rates above fair market value. It claims the alleged scheme affected over 30% of apartment buildings with five or more units and 60% of buildings with 50 or more units in D.C.
RealPage and the defendant landlords illegally conspired to artificially raise rents by participating in a centralized, anticompetitive scheme, causing District residents to pay millions of dollars above fair market prices,” said Schwalb.
The lawsuit centers around RealPage’s YieldStar rent optimization software, which uses an algorithm to recommend pricing based on market data. Schwalb alleges that by feeding data into YieldStar and adhering to its pricing suggestions, D.C.’s largest landlords effectively formed a “cartel” that distorted the market.
One former high-level employee of defendant Greystar Management Services admitted landlords used the software specifically to raise rents in unison, according to the complaint. It also cites internal documents showing landlords were expected to closely follow RealPage’s pricing in nearly all cases.
This marks the latest legal action against RealPage’s pricing practices, which have faced growing scrutiny. The Department of Justice opened an antitrust investigation into the company last year following a ProPublica investigation that revealed how YieldStar discourages negotiation and prioritizes high occupancy over lower rents.
RealPage has maintained that it complies with antitrust laws and that its software provides a more data-driven approach to pricing than manual methods. The company did not respond to a request for comment on the D.C. lawsuit.
Among the defendants are prominent real estate firms, including Greystar, Bozzuto Management Company, and Equity Residential — which collectively own and manage tens of thousands of units across D.C. Schwalb argues their coordination inflated rents by “hundreds of dollars per month” in a city with a well-documented housing affordability crisis.
D.C. had the highest median rent of any U.S. city at over $2,100 last year, according to census data. The attorney general’s complaint estimates the alleged collusion generated over $200 million in excess rental income for defendants, depriving renters of fair market prices.
The lawsuit alleges violations of D.C.’s antitrust statutes and could seek civil penalties and restitution for D.C. tenants impacted by inflated rents if successful. It follows a similar price-fixing class action suit filed against RealPage and major landlords in California last year.
Featured Image Credit: Photo by Ketut Subiyanto; Pexels; Thank you!
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