US Justice Department Accuses Six Major Landlords of Scheming to Keep Rents High
Tuesday, Jan 7, 2025 7:50 pm ET
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The US Justice Department has accused six major landlords of conspiring to keep rents high by sharing sensitive information and using common pricing algorithms. The lawsuit, filed on January 8, 2025, alleges that the landlords, collectively operating over 1.3 million units in 43 states and the District of Columbia, engaged in anti-competitive practices that harmed millions of American renters.
The landlords named in the lawsuit are Greystar Real Estate Partners LLC, Blackstone's LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc and Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC, and Cortland Management LLC. The Justice Department alleges that these landlords actively participated in a scheme to set their rents using each other's competitively sensitive information through common pricing algorithms.

The lawsuit details various methods used by the landlords to share sensitive information, including direct communication with competitors, "call arounds," and participation in "user groups" hosted by RealPage, a software company that provides pricing algorithms to landlords. The Justice Department claims that these practices allowed the landlords to align their prices, avoiding competition that would otherwise push down rents.
One of the six landlords, Cortland Management LLC, has agreed to cooperate with the Justice Department and has signed a proposed consent decree. If approved by the court, the decree would restrict Cortland's use of competitors' data and algorithms to set rents and require it to be supervised by a court-appointed monitor.
The Justice Department's lawsuit highlights the ongoing housing affordability crisis in the United States. According to the Associated Press, half of American renters spent more than 30% of their income on rent and utilities in 2022, an all-time high. The lawsuit also notes that 1.5 million renters are evicted each year, with children facing the highest eviction rates.
The proposed consent decree for Cortland could have significant economic and social consequences. If approved, it may limit Cortland's ability to optimize its pricing strategy, potentially leading to lower profits. However, it could also encourage Cortland to invest more in its own data analysis capabilities, fostering innovation in the industry. Socially, it may lead to more competitive pricing, benefiting renters who might see lower rents. Other landlords might be influenced to adopt more transparent and competitive practices to avoid similar restrictions, potentially leading to a more competitive rental market overall.
The Justice Department's lawsuit aligns with the broader housing policy landscape, addressing the issue of rent control and its impact on the housing market. The lawsuit highlights the need for a balanced approach to housing regulations, considering both affordability and market incentives to maintain a healthy housing market. In the long term, stricter antitrust regulations for the rental market could increase competition and potentially lower rents. However, it's important to note that rent control policies have historically had mixed results, with some studies showing they can lead to a decline in the rental stock and others suggesting they can help maintain affordability.
In conclusion, the US Justice Department's lawsuit against RealPage and six major landlords sheds light on the ongoing housing affordability crisis and the role of anti-competitive practices in exacerbating the problem. The proposed consent decree for Cortland could have significant economic and social consequences, potentially leading to a more competitive rental market. The lawsuit aligns with the broader housing policy landscape, highlighting the need for a balanced approach to housing regulations that considers both affordability and market incentives.