On Jan. 7, the United States Justice Department sued six of the country’s largest landlords for an “algorithmic pricing scheme that harms millions of American renters.” The case centers around an antitrust lawsuit against a company called RealPage which claims to “provide property management software, data analytics, and services to efficiently manage rental properties and real estate.”
According to the U.S. Department of Justice, “the amended complaint alleges that the property management companies Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc and Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC, and Cortland Management LLC participated in an unlawful scheme to decrease competition among landlords in apartment pricing, harming millions of American renters.”
Combined, these six companies own 1.3 million properties across the United States, including some notable properties in Philadelphia.
For example Greystar Real Estate Partners owns properties in Philadelphia, West Chester, Delaware County, and the surrounding suburbs. Greystar’s list of properties in Philly includes The Ludlow Apartments, Logan Lofts, Quaker Court at University City, and a dozen other apartment buildings.
Cushman & Wakefield owns and operates three apartment complexes in Philadelphia; Views at Fishtown, The Gio, and The Carson. Willow Bridge Property Company owns four; Vue 32, Rittenhouse Row, The Veranda and Brookview Apartments.
Camden Property Trust, Pinnacle Property Management Services and Cortland Management are not operating in Philadelphia, and assets belonging to Blackstone’s LivCor were difficult to find, but a 2019 study suggests they do not operate in Pennsylvania.
“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,” said Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division.
These six landlords are being accused of using RealPage’s anti-competitive pricing algorithms, directly communicating with competitors’ senior managers about rents, occupancy, and other competitively sensitive topics, participating in user groups hosted by RealPage, and sharing information with competitors about parameters in RealPage’s software.
In the lawsuit, the DOJ says that RealPage claimed “our tool ensures that (landlords) are driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.” Even citing that their Vice President of Revenue Management Advisory Services said “there is greater good in everybody succeeding versus essentially trying to compete against one another.”
The United States Department of Justice, along with ten other states — Pennsylvania not included — filed this lawsuit against RealPage and the six property management groups. One of the companies, Cortland Management LLC, has already agreed to cooperate with the Justice Department and enter into a settlement to end the use of common rental pricing algorithms and competitively sensitive data to set rents.
Thousands of Philadelphians were likely affected by this algorithmic price fixing scheme, and more information will come to light as companies decide whether to cooperate or go to trial.
