Expansion of Federal Lawsuit Targets Major Landlords
The U.S. Department of Justice has expanded its federal antitrust lawsuit, alleging that some of the nation’s largest landlords used an algorithmic pricing system to overcharge renters in parts of two major Alabama cities. The lawsuit now includes six large landlords who collectively manage approximately 1.3 million rental units across 43 states. This move follows the original complaint filed in August, which accused RealPage Inc., a Texas-based software company, of facilitating anticompetitive practices by collecting and sharing sensitive rental price data between competing landlords.
RealPage’s software, which is utilized by 80% of landlords, allegedly collects rental rates and lease terms from landlords and uses this data to generate pricing recommendations. These recommendations are then provided back to the landlords, despite them being in competition with each other. This system is at the heart of the expanded lawsuit, which now targets RealPage, along with six major landlords, for allegedly using this software to coordinate rental pricing, ultimately raising rents for tenants.
Landlords Named in the Lawsuit
The six landlords now included in the complaint are Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc., Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC, and Cortland Management LLC. These companies manage significant portions of rental properties in Alabama, particularly in Birmingham and Mobile, where they allegedly contributed to inflated rental prices through coordinated pricing strategies.
While Alabama is not directly involved in the lawsuit, many of the properties under the nation’s largest landlords’ control are located in the Birmingham and Mobile areas. The complaint claims that, in these regions, up to 80% of both 1- and 2-bedroom apartment units were affected by RealPage’s software. The lawsuit highlights how this widespread use of algorithmic pricing may have led to anti-competitive behavior, harming renters by limiting their ability to secure affordable housing.
Impact on Renters and Market Competition
Acting Assistant Attorney General Doha Mekki of the Justice Department emphasized that, while many Americans struggle with high housing costs, landlords used sensitive pricing data to keep rental prices artificially high. The lawsuit aims to curb such practices and restore fair market conditions, helping make housing more affordable for millions across the country.
The lawsuit accuses RealPage and some of the nation’s largest landlords of colluding to fix rental prices, thereby reducing competition. In a healthy market, renters would benefit from landlords competing to offer better rental terms, including pricing, discounts, and other incentives. However, the Justice Department claims that the use of RealPage’s platform has allowed landlords to bypass competition, resulting in higher costs for tenants.
Greystar, the largest apartment manager in the U.S., has expressed disappointment with the lawsuit. The company has stated that it will defend itself vigorously, claiming that it has not engaged in any anti-competitive behavior.
The Department of Justice is seeking a court order to halt these allegedly anticompetitive practices and restore competitive conditions in the affected rental markets.
