The U.S. Department of Justice (DOJ), along with ten states, has filed a lawsuit against six major l[...]
The U.S. Department of Justice (DOJ), along with ten states, has filed a lawsuit against six major landlords, accusing them of an unlawful scheme to inflate rents using algorithmic tools and sensitive data sharing. The lawsuit follows an August complaint against property management software company RealPage, which developed a pricing algorithm allegedly used by the landlords to manipulate the rental market.
Landlords named in the lawsuit, including Cushman & Wakefield, Greystar Real Estate Partners, and Blackstone’s LivCor, are accused of using RealPage’s pricing software to align rental prices with competitors, thereby eliminating the downward pricing pressure that competition typically enforces. The landlords, who collectively manage over 1.3 million rental units across 43 states, are also accused of collaborating through direct communication and sharing sensitive information to set rents.
The DOJ claims that the landlords used RealPage’s algorithms and each other’s sensitive information to set rents via direct communication between managers, “call arounds” during which property managers would share information as part of a “market survey,” discussing how to modify RealPage’s pricing methodology in “user groups” hosted by the software company, and sharing RealPage parameters. Acting Assistant Attorney General Doha Mekki stated, “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.” This alleged collusion affected millions of renters already burdened by rising costs.
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. Cortland Management, one of the accused landlords, agreed to cooperate with the DOJ and stop using common rental pricing algorithms and competitively sensitive data to set rents as part of a settlement agreement.
Additional Reading:
– Justice Department Sues Six Large Landlords for Algorithmic Pricing Scheme that Harms Millions of American Renters, Office of Public Affairs, U.S. Department of Justice (January 7, 2025)
– US Justice Department accuses six major landlords of scheming to keep rents high, AP News (January 7, 2025)
– US sues Cushman & Wakefield, other landlords over alleged rental price coordination, Reuters (January 7, 2025)
Image Credit: Sutthiphong Chandaeng
