HPP: The U.S. Justice Department is suing a number of large landlords, including a property management company in Charleston, over a pricing system that officials claim hurt millions of renters.
An amended complaint against software vendor RealPage Inc. was filed in North Carolina on Tuesday, naming six companies, including Greystar Real Estate Partners LLC (Greystar).
In August 2023, RealPage was sued by the DOJ for allegedly engaging in an unlawful system that permits landlords to band together in order to raise rental fees. According to the lawsuit, the company’s algorithm, which landlords use to determine suggested rental pricing for millions of apartments nationwide, violates antitrust laws.
According to the DOJ, Greystar and other landlords “actively participated” in the plan to maintain high rents, including Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc., Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC, and Cortland Management LLC.
According to regulators, the businesses accomplished this by exchanging “sensitively competitive information” on rental rates, lease conditions, and occupancy with one another and by using RealPage’s algorithms to assist in setting rentals.
“In one example, Greystar supplied Camden with information not only about very recent renewal rates, but also its approach to pricing for the upcoming quarter, its acceptance of RealPage’s pricing recommendations, use of concessions and competitively sensitive information about occupancy,” a Jan. 7 news release stated. “Likewise, executives at Camden and LivCor communicated over the course of months about their pricing strategies, including plans for certain price increases.”
According to figures provided by the Department of Justice, the six landlords collectively manage more than 1.3 million units throughout 43 states and the District of Columbia.
“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 stated. “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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Although South Carolina has not joined the lawsuit, Greystar’s portfolio has properties in all of the state’s major cities.
Greystar denied any involvement in anti-competitive actions in a statement posted on the company’s website on January 7.
According to recent data, South Carolina’s rent costs have increased by almost 30% since January 2020, and state legislators are trying to find methods to lessen the financial strain on citizens.
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The “South Carolina Rent Control Act,” which would mandate that landlords alert renters to future rate hikes, is one bill that has been introduced for the next legislative session.
Additionally, it would limit the amount of rent that might be raised in specific situations and forbid landlords who operate on a lease other than a week-to-week agreement from boosting rents during the first year of tenancy.
The bill’s sponsor, Wendell Gilliard (D-Charleston), stated that “these companies are just getting way out of hand with these rent increases.” He also added that controlling rent pricing and apartment leases could assist address the state’s homelessness problem.