43 votes

US Justice Department files amended complaint in rent price fixing lawsuit. Landlords colluded directly.

3 comments

  1. Carrie
    Link
    Nice share. It seems this is slightly different from the original claim in that there is direct evidence the landlords worked together via the following methods: This is different from before...

    Nice share.

    It seems this is slightly different from the original claim in that there is direct evidence the landlords worked together via the following methods:

    Along with using RealPage’s anti-competitive pricing algorithms, the Justice Department said the landlords coordinated through a variety of means, including:

    Directly communicating with competitors’ senior managers about rents, occupancy and other sensitive topics.

    Regularly conducting “call arounds” in which property managers called or emailed competitors to share and discuss competitively sensitive information about rents, occupancy, pricing strategies and discounts.

    Participating in “user groups” hosted by RealPage, where landlords would discuss how to modify the software’s pricing methodology as well as their own pricing strategies.

    This is different from before because before the claim was just that by nature of using the algorithm/RealPage this was anti-consumer. This would make it easy to say, “hey I didn’t know that was how the app worked, I’m not a computer scientist, and thus not responsible for that”.

    The new claim shows that the landlords were very aware of what was going on and actively participating in it. Good for those states for coming after the landlords, but I’m curious, is RealPage getting off scot free ?

    17 votes
  2. Hollow
    Link
    This is the press release that the article is based on itself, which I think has more details:...

    This is the press release that the article is based on itself, which I think has more details:
    https://www.justice.gov/opa/pr/justice-department-sues-six-large-landlords-algorithmic-pricing-scheme-harms-millions

    Landlord Cortland Agrees to Cooperate with Justice Department and Enter into a Settlement to End the Use of Common Rental Pricing Algorithms and Competitively Sensitive Data to Set Rents

    The amended complaint alleges that the six landlords actively participated in a scheme to set their rents using each other’s competitively sensitive information through common pricing algorithms. Along with using RealPage’s anticompetitive pricing algorithms, these landlords coordinated through a variety of means, including:

    • Directly communicating with competitors’ senior managers about rents, occupancy, and other competitively sensitive topics. In one example, Greystar supplied Camden with information not only about very recent renewal rates, but also its approach to pricing for the upcoming quarter, its acceptance of RealPage’s pricing recommendations, use of concessions and competitively sensitive information about occupancy. Likewise, executives at Camden and LivCor communicated over the course of months about their pricing strategies, including plans for certain price increases.
    • Regularly conducting “call arounds.” During these discussions, euphemistically referred to as “market surveys,” property managers called or emailed competitors to share, and sometimes discuss, competitively sensitive information about rents, occupancy, pricing strategies and discounts.
    • Participating in “user groups” hosted by RealPage. For instance, landlords discussed via user groups how to modify the software’s pricing methodology, as well as their own pricing strategies. In one example, LivCor and Willow Bridge executives participated in a user group discussion of plans for renewal increases, concessions and acceptance rates of RealPage rent recommendations.
    • Sharing information with competitors about parameters in RealPage’s software. As an example, at the request of Willow Bridge’s director of revenue management, Greystar’s director of revenue management supplied its standard auto-accept parameters for RealPage’s software, including the daily and weekly limits and the days of the week for which Greystar used “auto-accept.”

    The Justice Department also announced a proposed consent decree that, if approved by the court, would resolve its claims against Cortland, a landlord that manages over 80,000 rental units in 13 states. Under the proposed consent decree, Cortland would cooperate in the Justice Department’s investigation and litigation 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; and
    • Soliciting, disclosing or using any competitively sensitive information with any other property manager as part of setting rental prices or generating rental pricing recommendations.
    2 votes
  3. Hollow
    Link
    Also, gift link to the interactive map tool the Washington Post built to show affected buildings: https://wapo.st/425S7j5

    Also, gift link to the interactive map tool the Washington Post built to show affected buildings: https://wapo.st/425S7j5

    To assess how widespread use of RealPage’s rent software may be, The Post identified 3.1 million market-rate rental units managed by companies named in the lawsuits. That analysis found 10 counties where more than 1 in 3 multifamily units are managed by a property company allegedly using a rent-setting program from RealPage.
    Nationwide, the named companies manage at least 12 percent of all multifamily housing units, a Post analysis found, often concentrated in areas that have seen recent building booms. Of units built since 2020, more than 70 percent are managed by alleged clients of RealPage’s rent-setting software.
    In the region around D.C., the first government to file suit against RealPage, about 24 percent of multifamily units are managed by companies alleged to have used RealPage’s rent software.
    These buildings are often new high-rises chock-full of amenities. In just one square mile of Washington’s Navy Yard neighborhood, for example, where an onslaught of development has sent rents soaring, 22 buildings are managed by companies named in the suits, according to The Post’s analysis.

    1 vote