WASHINGTON — A lawsuit has been launched against RealPage, Inc. and 14 of the largest residential landlords across the District by the attorney general for scheming to illegally raise rent for tens of thousands renters.
According to Attorney General Brian Schwalb, the lawsuit states that the scheme involves them collectively delegating price-setting authority to RealPage, which used a centralized pricing algorithm to inflate prices, costing renters millions of dollars.
The 14 landlords named in the lawsuits are Avenue5 Residential, LLC, AvalonBay Communities, Inc., Bell Partners, Inc., Bozzuto Management Company, Camden Summit Partnership L.P., Equity Residential Management, LLC, Gables Residential Services, Inc., GREP Atlantic, LLC, Highmark Residential, LLC, JBG Smith Properties, LP, Mid-America Apartments, LP, Paradigm Management II, LP, UDR, Inc., and William C. Smith & Co., Inc.
In the District, over 30% of apartments in multi-family buildings and around 60% of units in large multi-family buildings are priced using RealPage’s software. Many of the apartments whose rental prices were determined by this software are clustered along Connecticut Avenue in Northwest D.C., 14th Street from Columbia Heights to Shaw, and in NoMa and Navy Yard.
In the Washington-Arlington-Alexandria Metropolitan area, that number is even higher, with over 90% of units in large buildings being priced by using RealPage’s software. Leaving residents with no other choice than to be subjected to the inflated rental prices.
The technology was used to set rental prices for more than 50,000 apartments across D.C., in violation of the District’s Antitrust Act.
Christina Perry who has rented a Northeast apartment from Bozzuto Management Company says she feels vindicated by the recent lawsuit. She contacted the A.G.'s office about the high rent prices and increases. "It's like the kids out here robbing people. You just don't have a face mask on. You know what I mean? You just don't have a gun in your hand, but you're literally robbing and depriving people of life. When you take away someone's stability you take a life from a person,"
Perry says some of her neighbors have been forced out of their units because of the sky-high rent increases.
“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,” said AG Schwalb. “Defendants’ coordinated and anticompetitive conduct amounts to a District-wide housing cartel. At a time when affordable housing in DC 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.”
According to the lawsuit, allegedly RealPage and the landlords colluded to use Revenue Management technology, making it market-dominant; the landlords illegally coordinated to forgo competition and share sensitive company data to RealPage in order to raise rents; and the landlords illegally agreed to share information and collectively set rents led to artificially inflated pricing, which caused tenants in the District to pay millions of dollars above market rates.
The lawsuit is seeking to stop RealPage and the accused landlords from engaging in anticompetitive behaviors that artificially inflate rental prices, appoint a corporate monitor, and secure financial compensation for those who were affected.
The DC Attorney General Office is requesting that those that believe they may have been impacted by the alleged scheme to reach out to their office so they can help build a case.
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