Colorado joined the U.S. Department of Justice and other states in a lawsuit against RealPage, a property management software company that allegedly colluded with landlords to artificially inflate rent prices.
Filed in U.S. District Court for the Middle District of North Carolina, the lawsuit says RealPage’s practice of collecting rent and lease data from competitors and using it to recommend rent increases despite market conditions “frustrates the natural forces of competition” and harms renters.
“RealPage sells software to landlords that collects nonpublic information from competing landlords and uses that combined information to make pricing recommendations,” the lawsuit says. It quoted RealPage’s own description of its software, which it says “”ensures that [landlords] are driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.”
Colorado Attorney General Phil Weiser said in a statement that half of renters in Colorado spend over 30% of their income on housing, and high rent is continuously reported to his office as a top concern.
“Renters should benefit from healthy competition between landlords to find an apartment that fits their budget and needs. But RealPage’s software and market dominance have enabled collusion between landlords to fix rents, set the number of apartment(s) available in the market, and harm renters by forcing them to pay rents above competitive levels,” Weiser said in a statement. “This anticompetitive conduct is driving rent increases. That’s why we filed this lawsuit to hold RealPage accountable and to fight for renters.”
The lawsuit also claims RealPage has monopolized commercial revenue management software, controlling about 80% of the market.
Jennifer Bowcock, RealPage senior vice president of communications and creative, said in a statement the company’s software is “purposely built to be legally compliant,” adding that the DOJ has analyzed its revenue management products without objecting to them before.
“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the DOJ has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” Bowcock said in a statement. “It is merely a distraction from the fundamental economic and political issues driving inflation throughout our economy — and housing affordability in particular — which should be the focus of policymakers in Washington, D.C.”
Bowcock added: “We believe the claims brought by DOJ are devoid of merit and will do nothing to make housing more affordable. We intend to vigorously defend ourselves against these accusations.”
In July, corporate watchdog Accountable.US encouraged Weiser to investigate rental companies operating in Colorado that are accused of working with RealPage to fix rental prices in Washington D.C. Accused companies include Mid-America Apartments, AvalonBay Communities, Equity Residential, Camden Property Trust, and UDR. As of the end of March, Mid-America Apartments operated 1,202 units in Denver, AvalonBay Communities 1,539 units, Camden Property Trust 2,873 units, Equity Residential has 2,505, and UDR 218 units.
Plaintiffs asked the court to stop RealPage from engaging in the “anticompetitive practices” detailed in the lawsuit. Other states included in the lawsuit are North Carolina, California, Connecticut, Minnesota, Oregon, Tennessee and Washington.
“A free market requires that landlords compete on the merits, not coordinate pricing,” the lawsuit says. “Landlords should win renters by offering whatever combination of price and quality they think is most attractive.”
Editor’s note: This story first appeared on Colorado Newsline, which is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Colorado Newsline maintains editorial independence. Contact Editor Quentin Young for questions: [email protected]. Follow Colorado Newsline on Facebook and X.
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Publish date : 2024-08-26 03:46:00
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