{"id":3666,"date":"2025-01-11T16:59:00","date_gmt":"2025-01-11T16:59:00","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/doj-sues-six-major-landlords-alleging-rent-inflation-scheme-justia-news-january-9-2025\/"},"modified":"2025-01-18T06:59:39","modified_gmt":"2025-01-18T06:59:39","slug":"doj-sues-six-major-landlords-alleging-rent-inflation-scheme-justia-news-january-9-2025","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/doj-sues-six-major-landlords-alleging-rent-inflation-scheme-justia-news-january-9-2025\/","title":{"rendered":"DOJ Sues Six Major Landlords Alleging Rent Inflation Scheme \u2014 Justia News \u2014 January 9, 2025"},"content":{"rendered":"
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The U.S. Department of Justice (DOJ), along with ten states, sued six large landlords this week, alleging an unlawful scheme to inflate rents using algorithmic tools and sensitive data sharing. The amended complaint, following an August complaint against property management software company RealPage, accuses landlords, including Cushman & Wakefield, Greystar Real Estate Partners, and Blackstone\u2019s LivCor, of manipulating the rental market through a pricing algorithm developed by RealPage Inc.<\/span><\/p>\n

The amended complaint highlights that the landlords, who collectively manage over 1.3 million rental units across 43 states, collaborated using RealPage\u2019s pricing software. The DOJ claims this software utilized sensitive market data to recommend rental prices that would align with competitors, thereby eliminating the downward pricing pressure that competition typically enforces.<\/span><\/p>\n

According to the DOJ, in addition to using RealPage\u2019s algorithms, the landlords schemed to use each other\u2019s sensitive information to set their rents via direct communication between managers, \u201ccall arounds\u201d during which property managers would share information as part of a \u201cmarket survey,\u201d discussing how to modify RealPage\u2019s pricing methodology in \u201cuser groups\u201d hosted by the software company, and sharing RealPage parameters.<\/span><\/p>\n

DOJ Acting Assistant Attorney General Doha Mekki stated, \u201cWhile Americans across the country struggled to afford housing, the landlords named in today\u2019s lawsuit shared sensitive information about rental prices and used algorithms to coordinate to keep the price of rent high.\u201d This alleged collusion affected millions of renters already burdened by rising costs.<\/span><\/p>\n

RealPage defended its algorithm, emphasizing that it is utilized on less than 10% of U.S. rental units and asserting that housing shortages are the primary driver of high rents, not their software.<\/span><\/p>\n

Cortland Management, one of the accused landlords, agreed to cooperate<\/a> with the DOJ and stop using common rental pricing algorithms and competitively sensitive data to set rents as part of a settlement agreement.<\/span><\/p>\n

Additional Reading<\/b><\/p>\n

Justice Department Sues Six Large Landlords for Algorithmic Pricing Scheme that Harms Millions of American Renters<\/span><\/a>, <\/span>Office of Public Affairs, U.S. Department of Justice<\/span><\/i> (January 7, 2025)<\/span><\/p>\n

US Justice Department accuses six major landlords of scheming to keep rents high<\/span><\/a>, <\/span>AP News<\/span><\/i> (January 7, 2025)<\/span><\/p>\n

US sues Cushman & Wakefield, other landlords over alleged rental price coordination<\/span><\/a>, <\/span>Reuters<\/span><\/i> (January 7, 2025)<\/span><\/p>\n

Image Credit: <\/b>\u00a0Sutthiphong Chandaeng \/ Shutterstock.com<\/span><\/p>\n<\/div>\n