DC Attorney General Sues 14 Landlords and RealPage Over Rent Fixing
By Chava Gourarie November 1, 2023 6:03 pm
reprints
Washington, D.C., Attorney General Brian Schwalb has sued 14 of the city’s biggest landlords, as well as software company RealPage, alleging that the landlords “illegally colluded” to raise rents utilizing the company’s rent-setting Yieldstar software.
The defendants include some of the nation’s largest landlords and property management companies such as AvalonBay Communities, Equity Residential (EQR) and Greystar, as well as local power players JBG Smith and Bozzuto Management Company.
“[The defendants] and RealPage have unlawfully agreed to use a centralized system to inflate rents for tens of thousands of apartments across the District,” Schwalb wrote in the complaint.
Landlords that use RealPage’s software agree to utilize the automated rent set by the program, and report those rents back into the system, per the complaint, resulting in a group of landlords agreeing to set rent prices in unison to the detriment of renters. This “anticompetitive scheme” has cost renters millions of dollars, the complaint alleges.
The D.C. lawsuit follows a 2022 investigation from ProPublica into Yieldstar’s effect on rent inflation, which spawned more than 20 class-action lawsuits against the Texas-based RealPage (which have been consolidated) as well as calls for the Department of Justice to investigate.
As in the earlier investigations, the D.C. suit also claims that landlords using rent-setting software artificially limit supply by leaving units empty, thus driving up rents, instead of competing with each other over price.
In D.C., the rent-setting software is used for about 50,000 units, per the complaint.
While this suit focuses on the District, it will certainly have national implications. The D.C. attorney general’s office has been involved in other national antitrust cases, including one against Amazon, which Schwalb’s predecessor, Karl Racine, filed in 2021.
The attorney general is seeking a jury trial, and did not name a dollar amount in damages.
“In seeking to draw a causal connection between revenue management software like ours and increases in market-wide rents, this copycat suit repeats the inaccuracies of predecessor cases,” a spokesperson for RealPage said in a prepared statement. “The complaint and others like it are wrong on both the facts and the law and we will vigorously defend against it.”
Chava Gourarie can be reached at cgourarie@commercialobserver.com.
Update: The story has been updated with a quote from RealPage.
