US Department of Justice charges six large landlords with conspiring to keep rents high

DENVER (AP) — The U.S. Department of Justice is suing several large landlords for allegedly coordinating to keep Americans’ rents high by using an algorithm to help set rents and privately sharing confidential information with their tenants. competitors to increase profits.

The lawsuit comes as American renters continue to struggle in a cutthroat housing market, where incomes fail to keep up with rent increases. The latest figures show that half of American renters spent more than 30% of their income on rent and utilities in 2022, an all-time high.

That means exhausting, everyday decisions between medications, food, school supplies and rent. It means lengthy eviction notices and court processes in which children face the highest eviction rates, with 1.5 million evicted each year, according to Princeton University’s Eviction Lab.

While the housing crisis has been assigned several causes, including a drop in housing built over the past decade, the Justice Department’s lawsuit claims that major landlords are playing a role.

The department, along with 10 states, including North Carolina, Tennessee, Colorado and California, accuses six landlords who collectively operate more than 1.3 million units in 43 states and the District of Columbia of conspiring to avoid lowering rents.

Owner Greystar Real Estate Partners LLC, one of the defendants in the case, declined a request for comment from The Associated Press but posted an unsigned statement on its website.

“Greystar has and will conduct its business with the utmost integrity. At no time did Greystar engage in anti-competitive practices,” the statement reads. “We will vigorously defend ourselves in this lawsuit.”

The lawsuit accuses landlords of sharing confidential rental and occupancy data with competing companies via email, phone calls or in groups. Information shared included renewal rates, how often they accept an algorithm’s price recommendation, their use of concessions such as offering a free month, and even their approach to pricing for the next quarter.

The Justice Department said one of the six owners agreed to cooperate with prosecutors. The proposed deal would restrict how the company can use its competitors’ data and algorithms to set rents.

“Today’s action against RealPage and six major landlords seeks to end their practice of putting profits before people and make housing more affordable for millions of people across the country,” said Acting Assistant Attorney General Doha Mekki. of the department’s antitrust division in Tuesday’s press. release.

Those owners were added to a existing lawsuit against RealPagewhich runs an algorithm that recommends rental prices to owners. Prosecutors say the algorithm uses sensitive competitive information, allowing landlords to align their prices and avoid competition that would otherwise drive down rents.

Jennifer Bowcock, senior vice president of communications at RealPage, said in a statement to the AP that its software is used in less than 10% of rental units in the U.S. and that its price recommendations are used in less than half of the time.

“It’s time to stop scapegoating RealPage, and now our customers, for housing affordability issues when the root cause of high housing costs is a shortage of housing supply,” Bowcock said .

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Bedayn is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.