DC Attorney General Begins Antitrust Probe Into Housing Industry ‘Targets’

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District of Columbia Attorney General Brian Schwalb has launched an antitrust investigation into targeted companies in the housing industry over alleged noncompetitive behavior, according to a letter he sent to the D.C. City Council. 

In his letter to the D.C. Council, Schwalb was seeking approval for a proposed contract negotiated in May to hire law firm Cohen Milstein Sellers & Toll to assist with the antitrust investigation.

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While Schwalb did not name names, the investigation’s likeliest target is rent-setting software from companies such as RealPage. That company is already facing an antitrust probe from the U.S. Department of Justice for allegedly engaging in noncompetitive “rent-fixing” through its Yieldstar software, which helps landlords set rents. 

Separately, RealPage is facing a federal class-action lawsuit along similar lines in Nashville, Tenn., along with some of the country’s largest multifamily landlords like Essex Property Trust, Equity Residential and Greystar Real Estate Partners, who also use the Yieldstar software. In August, the judge in the Tennessee Middle District Court allowed the probe — which consolidated more than 20 different lawsuits — to move forward

The plaintiffs’ chief antitrust claim is that rent-setting software raises rents by aggregating information from the millions of units that use the platform. Additionally, plaintiffs argue that the software encourages landlords to leave apartments empty rather than rent them at lower prices, among other tactics, which artificially raises prices.

Schwalb’s letter only indicated that it was looking to hire Cohen Milstein for an “investigation of and potential litigation against identified targets in the housing industry for violations of antitrust laws,” without specifying any names. A source told Washington City Paper, which first reported news of the probe, that the target of the investigation was RealPage. 

The D.C. attorney general’s office is no stranger to national antitrust cases. Schwalb’s predecessor, Karl Racine, took on Amazon, first filing an antitrust lawsuit against the e-commerce giant in 2021, and later a consumer protection case as well. 

The AG’s office and RealPage did not immediately respond to requests for comment.

Chava Gourarie can be reached at cgourarie@commercialobserver.com.