Landlords Accused of Price-Fixing Using Algorithm
Several major landlords have been accused of colluding to keep apartment rents high, allegedly using an algorithm that influences prices, according to legal filings by the Colorado attorney general, the U.S. Justice Department, and a coalition of other states.
An amended complaint filed recently added six landlords to an antitrust lawsuit filed last summer against RealPage, the software developer whose algorithms have come under scrutiny for their alleged role in fixing rents. The landlords named in the lawsuit are Greystar, LivCor, Camden Property Trust, Cushman & Wakefield, Willow Bridge, and Cortland, all of which own or operate properties in Colorado and are among the largest landlords in the country.
Greystar alone has more than 45,000 units in Colorado, while Cortland operates at least 15 apartment complexes in the state, totaling several thousand more units.
The lawsuit accuses the companies of participating in an unlawful scheme to decrease competition among landlords in apartment pricing, ultimately harming millions of American renters. It alleges that the companies fed their internal data into RealPage’s pricing algorithm, which was then used to set and adjust rental prices.
Additionally, the suit claims that the companies communicated directly about rents and occupancy rates while participating in user groups organized by RealPage.
RealPage has denied the allegations of price-fixing and is seeking the dismissal of the lawsuit. The Colorado Apartment Association has defended RealPage’s algorithm as a tool used by managers to help lower rents.
In statements to Reuters, Greystar denied the allegations, Cushman defended its subsidiary Pinnacle as a property manager that couldn’t set prices, and Cortland stated that it did not rely on external data for price setting.
The Justice Department has already reached a settlement with Cortland, although Colorado has not yet joined that deal. Denver renters have been particularly impacted by RealPage’s algorithm and the landlords using it, with a recent analysis by the White House’s Council of Economic Advisors showing that renters in affected properties pay an average of $136 more per month in Denver.
Colorado Attorney General Phil Weiser joined the Justice Department’s suit against RealPage in August and has made consumer protection litigation a focus of his run for governor. Lawmakers attempted to ban the use of RealPage’s algorithm in Colorado in May, but the bill was not successful. It is expected to be reintroduced in the upcoming legislative session.
Incoming Senate President James Coleman believes that the increased public scrutiny on RealPage’s practices will lead to the bill’s passage into law this year.
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