Dive Brief:

• Washington, D.C., Attorney General Brian Schwalb has brought suit against RealPage and 14 landlords, accusing them of “unlawfully colluding” by collectively adopting the rents set by the Richardson, Texas-based company’s technology and “unlawfully agreeing to exchange competitively sensitive data in violation of the District of Columbia Antitrust Act.”
• By using RealPage’s revenue management system, landlords inflated the rents in thousands of apartments across the District, which caused renters to pay millions of dollars above what they would have, according to the lawsuit filed in the Superior Court of The District Of Columbia on Nov. 1. The defendants “extracted these inflated rents by agreeing to delegate their price-setting authority to a centralized entity — RealPage — rather than competing on price,” the suit said.
• Schwalb accused the 14 companies of agreeing in writing to share “competitively sensitive data,” including signed lease rents, to feed RealPage’s software. He claimed the company policed these contracts, and landlords abided by its suggested rents more than 90% of the time. If the market were truly competitive, he said the defendants would “keep their pricing strategies confidential.”

Dive Insight:

RealPage has a broad reach in the nation’s capital, according to Schwalb. He said that 90% of units in buildings with 50 or more apartments use RealPage software. Overall, the product is used by operators of 50,000 units in the District.

“RealPage and the defendant landlords illegally colluded to artificially raise rents by participating in a centralized, anticompetitive scheme, causing District residents to pay millions of dollars above fair market prices,” Schwalb said in a news release announcing the suit. “Defendants’ coordinated and anticompetitive conduct amounts to a District-wide housing cartel. At a time when affordable housing in D.C. is increasingly scarce, our office will continue to use the law to fight for fair market conditions and ensure that District residents and law-abiding businesses are protected.”

The 14 apartment firms listed in the Washington, D.C., suit include:

• AvalonBay Communities
• Avenue5 Residential
• Bell Partners Inc.
• Bozzuto Management Co.
• Camden Summit Partnership
• Equity Residential
• Gables Residential Services
• GREP Atlantic
• Highmark Residential
• JBG Smith Properties
• Mid-America Apartments
• Paradigm Management II
• UDR
• William C. Smith & Co. 

Multifamily Dive reached out to RealPage and the 14 landlords and received one response.

“As a general matter, we do not comment on pending litigation, and in this case to our knowledge we have not received any official court papers and as a result lack any actual information about the specifics of the matter,” said a spokesperson for William C. Smith & Co. “We incorporate a number of factors to determine rents.  Among these are our own vacancies and our own lease/renewal terms.  In any event, we alone make the final decision on rents for all of our units.”

With the suit, the Attorney General’s office is seeking to stop RealPage and the defendant landlords from engaging in what it says are anti-competitive behaviors, appoint a corporate monitor to ensure these entities don’t engage in misconduct and secure financial compensation for the District and residents whose rents were unlawfully raised.

This is just the latest in a series of litigation targeting revenue management. After a ProPublica report investigated RealPage’s pricing model in October 2022, multiple renters filed class-action lawsuits alleging antitrust violations by RealPage and several owners and operators that utilized the company’s revenue management systems.

In all, more than 30 class-action suits have been filed against RealPage and apartment owners and managers. These cases have been consolidated into one lawsuit that moved forward in U.S. District Court for the Middle District of Tennessee in August when Waverly D. Crenshaw Jr., chief U.S. District Court judge for the Middle District of Tennessee, deferred a series of motions asserting the case should be dismissed, according to Bisnow.

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