AUSTIN, Texas — The Justice Department is suing six of the country’s largest landlords, along with RealPage, alleging they took part in a pricing scheme that harmed renters.
We already know the increase in population and businesses moving to Austin raised rental prices. But lawyer and owner of Texas Tenant Law Jennifer MacGeorge said the new DOJ lawsuit could prove illegal rent hikes made it even worse.
“It’s about collusion versus competition,” said MacGeorge. “It’s just about trying to gouge the market and get as much as they can.”
The antitrust lawsuit claims six property management companies – Cushman & Wakefield, LivCor, Cortland, Willow Bridge, Texas-based Greystar and Camden, which have numerous locations in the Austin area – are using software like RealPage. Together, the landlords control 1.3 million apartment units.
According to the lawsuit, the software uses an algorithm to help set rents and privately share sensitive, non-public information with competitors, allowing landlords to align their prices and avoid competition.
MacGeorge said the result is higher rents, for not only residential but commercial properties. She said this type of behavior exacerbates affordability issues and displaces residents and small businesses.
“We’re getting rid of people that help the economy sustain itself and be stable, which is what everybody’s looking for in this environment where you can’t even afford your groceries, and now you’re worried about your rent. It’s absolutely unacceptable,” said MacGeorge.
The lawsuit names the Austin-Round Rock metro multiple times, saying 30% or more of the residential properties in the area are using this type of software.
While MacGeorge mainly represents tenants, she found out some of her landlord clients are using similar pricing strategies to artificially raise prices.
“They are engaging in other practices that are artificially raising prices, such as putting in a rental rate at a renewal that’s maybe 20% above what the tenant was paying before and leaving it that high only until the tenant moves out and then immediately dropping it,” MacGeorge.
Multiple states joined this lawsuit but Texas isn’t one of them. MacGeorge is urging tenants who feel they’re experiencing unfair price hikes to reach out to the attorney general’s office and local housing authority to make a change.
In a statement, Greystar said: “Greystar responded to the amended complaint that was filed today by the Department of Justice (DOJ) which added Greystar and other operators to its lawsuit against RealPage: We are disappointed that the DOJ added us and other operators to their lawsuit against RealPage. Greystar has and will conduct its business with the utmost integrity. At no time did Greystar engage in any anti-competitive practices. We will vigorously defend ourselves in this lawsuit.”
In a statement, Camden wrote in part: “Camden Property Trust (NYSE:CPT) disagrees with the allegations made in the amended complaint against RealPage, which added Camden and others as defendants. Camden will vigorously defend itself against these claims and intends to move for dismissal. Camden exists to improve the lives of our employees, residents, and shareholders one experience at a time.”