Business and industry
Attorney General Anthony G. Brown has filed a lawsuit against RealPage, Inc. and several of Maryland’s largest residential landlords, accusing them of colluding to artificially inflate rent prices for hundreds of thousands of residents across the state. The lawsuit, filed in Prince George’s County Circuit Court, claims that these landlords used RealPage’s centralized pricing algorithms to raise rents in violation of the Maryland Antitrust Act, ultimately causing renters to pay millions of dollars more than they should have.
“This is a classic case of corporations teaming up to line their pockets at the expense of Maryland’s working families,” said Attorney General Brown. “RealPage and its landlord partners have made it harder for Maryland renters to afford a roof over their heads, and we are committed to holding them accountable.”
RealPage, a technology firm that provides software solutions to real estate owners and property managers, offers a “Revenue Management” product that tracks sensitive data—like tenant visit numbers—and uses this information to suggest rental prices that maximize profits for landlords. However, the lawsuit alleges that the software was used to set inflated rent prices across Maryland, with the defendants allowing RealPage to dictate rent rates for more than 100,000 rental units statewide.
The six major landlords named in the lawsuit are some of the largest property management companies in Maryland, including:
- Morgan Properties Management Company, LLC
- Bozzuto Management Company
- Greystar Management Services, LLC
- AvalonBay Communities, Inc.
- UDR, Inc.
- Highmark Residential, LLC
According to the Attorney General’s Office, these companies worked in tandem with RealPage to inflate rental prices above competitive market rates, which is believed to have exacerbated Maryland’s already dire affordable housing crisis. RealPage not only provided the technology but also monitored and enforced the rents set by its algorithms, making it difficult for tenants to find reasonably priced housing.
The lawsuit claims that the defendants shared sensitive data, gave RealPage control over rent-setting decisions, and actively recruited other landlords to participate in the scheme. This coordination between competitors turned the rental market into a de facto cartel, where landlords profited from inflated rents at the direct expense of tenants.
The effects of RealPage’s pricing model were widespread, with rent increases not only affecting the properties directly using the software but also influencing broader market conditions. According to the lawsuit, RealPage’s software increased rents by an average of 2-7%, driving up costs for tenants statewide.
In addition to seeking to stop these anticompetitive practices, Attorney General Brown is asking the court to appoint a corporate monitor to ensure that RealPage and the defendant landlords cease any further misconduct. The lawsuit also demands monetary restitution for both the state of Maryland and for residents whose rents were unlawfully raised due to the collusion.
“This lawsuit is not just about holding companies accountable for breaking the law,” said Brown. “It’s about protecting Maryland’s renters and ensuring that the housing market works for everyone, not just the wealthy few.”
Earlier this year, the Justice Department, along with the Attorneys General from North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, initiated a civil antitrust lawsuit against RealPage Inc. The lawsuit accuses the company of engaging in illegal practices aimed at reducing competition among landlords regarding apartment pricing and attempting to dominate the market for commercial revenue management software utilized by landlords for setting apartment prices.
The actions attributed to RealPage are said to have deprived renters of the advantages that come with competitive leasing terms, negatively impacting millions of Americans. This legal action was filed in the U.S. District Court for the Middle District of North Carolina, claiming that RealPage breached Sections 1 and 2 of the Sherman Act.
“RealPage’s egregious, anticompetitive conduct allows landlords to undermine fair pricing and limit housing options while stifling necessary competition,” said Acting Associate Attorney General Benjamin C. Mizer. “The Department remains committed to rooting out illegal schemes and practices aimed at empowering corporate interests at the expense of consumers.”
AG Brown’s complaint outlines allegations that closely mirror claims regarding RealPage’s practices. It asserts that RealPage enters into agreements with rival landlords, who provide the company with confidential and sensitive information about their rental rates and lease conditions. This data is used to develop and operate RealPage’s algorithmic pricing software. The software then offers recommendations on rental prices and other lease terms for the landlords involved, utilizing both their own and their competitors’ sensitive information. Additionally, the complaint suggests that in a truly competitive market, these landlords would be vying independently for renters by offering various pricing strategies, discounts, concessions, lease terms, and other factors related to apartment leasing.
“As Americans struggle to afford housing, RealPage is making it easier for landlords to coordinate to increase rents,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Today, we filed an antitrust suit against RealPage to make housing more affordable for millions of people across the country. Competition – not RealPage – should determine what Americans pay to rent their homes.”
In connection with its revised antitrust lawsuit against RealPage, the complaint has been updated to include a lawsuit against six of the largest landlords in the country for their involvement in algorithmic pricing practices that negatively impacted renters.
The updated allegations claim that these landlords—Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc, Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC, and Cortland Management LLC— while using Real Page software, they engaged in an illegal scheme that stifled competition in apartment pricing, ultimately harming millions of renters across the United States. Collectively, these landlords manage over 1.3 million rental units across 43 states and the District of Columbia.
The Justice Department simultaneously submitted a proposed consent decree with landlord Cortland, mandating that the company collaborate with the government. This decree also prohibits Cortland from utilizing sensitive data from its competitors to determine rental prices and from employing the same algorithm as its rivals without oversight from a corporate monitor. Read here.
With a new administration taking charge, there’s a strong chance that these lawsuits could be indirectly delayed by presidential influence. A recent press release from the White House states that “President Trump is ordering all Federal agencies to untangle the American economy from Biden constraints and improve affordability of necessary goods and services and increase the prosperity of the American workers”. His initiatives includes measures to:
- Drastically lower the cost of housing and expand housing supply;
- Eliminate unnecessary administrative expenses and rent-seeking practices that drive up healthcare costs;
- Eliminate counterproductive requirements raising the costs of home appliances;
- Create employment opportunities for American workers including drawing discouraged workers into the labor force; and
- Eliminate harmful, coercive “climate” policies driving up the costs of food and fuel.”
Regrettably, as of this writing, Donald Trump has yet to propose a viable policy to Congress aimed at alleviating the cost of living. As the situation unfolds, it could have significant consequences for rent prices in Maryland and beyond, indicating a more stringent approach to corporate practices that negatively impact consumers in the housing sector.
