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Title: Federal Government Accuses Six Large Landlords of Artificially Boosting Rent Prices

In August, federal authorities filed a lawsuit against RealPage, a prominent real estate software company. Now, they've expanded their legal action to include some of RealPage's major clients.

Title: Federal Government Accuses Six Large Landlords of Artificially Boosting Rent Prices

In an escalation of its antitrust case, the Department of Justice (DOJ) has broadened its lawsuit against RealPage, a prominent property management software company, and six major landlords. The new allegations state that these entities were involved in a scheme to curb competition amongst landlords, leading to an increase in rental prices and causing financial hardship for millions of American renters.

The DOJ previously implicated RealPage for utilizing algorithms that leveraged non-public information from competitors to propose rent hikes, inflating housing costs nationwide. Now, suspicions have turned towards six real estate giants – Greystar, LivCor, Camden, Cushman, Willow Bridge, and Cortland – which together manage over 1.3 million rental units in 43 states.

Acting Assistant Attorney General Doha Mekki insisted, in a press statement, that these landlords illegally shared sensitive rental price information and engaged in coordinated efforts to maintain high rent prices. Mekki emphasized that the objective of the legal proceedings against RealPage and the six major landlords is to dismantle this unethical practice and make housing more affordable for the vast majority of people in the United States.

Cortland Management, with its oversight of 80,000 rental properties, has already agreed to a consent decree. According to the terms, the company will no longer rely on competitors' sensitive data to establish pricing models and will operate under the supervision of a court-appointed monitor where it uses third-party pricing algorithms.

The amended complaint against RealPage and the landlords alleges that these property owners exchanged encrypted rental price details and tactics within RealPage's YieldStar software. For instance, a director from Camden's revenue management division reportedly discussed pricing strategies with Greystar's revenue management team in September 2020, trading information on market-specific occupancy rates, demand, and concession use.

The DOJ further claims that landlords took part in user group events organized by RealPage to collaborate on modifying their algorithms' pricing methodologies and sharing strategies. The lawsuit delves into numerous instances from these conferences where landlords shared secret information with competitors and RealPage representatives encouraged them to boost renewal and new pricing and trust in the validity of the software's algorithms.

The DOJ has secured the backing of ten state attorneys general in the lawsuit.

The allegations against RealPage and the six major landlords also involve the use of technology, with suspicions that they exchanged encrypted rental price details within RealPage's YieldStar software. The future of affordable housing in the United States hinges on the dismantling of this unethical tech-driven practice, as highlighted by Acting Assistant Attorney General Doha Mekki.

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