LAS VEGAS (KTNV) — Six of the nation's biggest landlords are being sued by the Department of Justice for allegedly using algorithms to fix rent prices and harm renters.
Those companies include Greystar Real Estate Partners LLC, Blackstone's LivCor LLC, Camden Property Trust, Cushman & Wakefield, Inc and Pinnacle Property Mangement Services LLC, Willow Bridge Property Company LLC, and Cortland Management LLC.
According to the Justice Department, the companies operate more than 1.3 million units in 43 states and the District of Colombia. That includes units right here in Las Vegas.
This is part of the antitrust lawsuit that the Justice Department filed against RealPage in August.
The amended complaint states the companies used Realpage software to post data like a landlord's rental prices from executed leases, lease terms, and future occupancy. RealPage collects a broad swath of such data from competing landlords, combines it, and feeds it to an algorithm.
Based on those numbers, the complaint alleges RealPage provides daily pricing recommendations back to competing landlords.
Prosecutors allege this is leading to higher rents, which are hurting working-class and low-income families.
"The percentage of income spent on rent for Americans without a college degree increased from 30% in 2000 to 42% in 2017, the complaint reads in part. "In 2021, the proportion of severely burdened households — households spending more than half of their income on gross rent — was 25%, or approximately 10.4 million households, an increase in approximately 1 million households since 2019. By 2022, this number increased to 12.1 million households."
You can read the full amended complaint below.
The complaint lists several market areas in which the agreements between RealPage and AI Revenue Management and YieldStar users to align pricing collectively have harmed, or are likely to harm, competition and thus renters.
Henderson, Northwest Las Vegas, and Summerlin/The Lakes are all listed in that chart.
"Everybody knows the rent is too damn high and we alleged this is one of the reasons why," Attorney General Merrick Garland said after filing the original complaint in August.
Deputy U.S. Attorney General Lisa Monaco said this was an example of a company using technology to harm consumers.
"Make no mistake. Training a machine to break the law is still breaking the law," Monaco said. "Price coordination using AI is still price coordination and monopolization advanced by an algorithm is still monopolization."
In addition to the amended complaint, the Justice Department has also announced a proposed consent decree, which would resolve its claims against Cortland, a landlord that manages over 80,000 rental units in 13 states.
In return, Cortland would cooperate in this investigation and be barred from, among other things:
- Using competitors' competitively sensitive data to train or run any pricing model
- Using third-party software or algorithms to price apartments without the supervision of a court-appointed monitor
- Soliciting, disclosing or using any competitively sensitive information with any other property manger as part of setting rental prices or generating rental pricing recommendations
You can read the proposed consent decree below.
At least 10 Attorneys General have joined the lawsuit against the landlords. They represent California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington.
In a statement to the Associated Press, RealPage said the suit is "devoid of merit and will do nothing to make housing more affordable."
