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Washington D.C.’s Lawyer Basic Brian Schwalb filed a lawsuit on Wednesday alleging that 14 of the town’s largest landlords colluded with a property administration software program firm to inflate rental costs throughout the town artificially.
In accordance with a Nov. 1 ArsTechnica report, the civil complaint accuses the landlords of conspiring with RealPage, a Texas-based supplier of lease pricing software program, of fixing rental charges above honest market worth. It claims the alleged scheme affected over 30% of condominium buildings with 5 or extra models and 60% of buildings with 50 or extra models in D.C.
RealPage and the defendant landlords illegally conspired to artificially increase rents by collaborating in a centralized, anticompetitive scheme, inflicting District residents to pay thousands and thousands of {dollars} above honest market costs,” stated Schwalb.
The lawsuit facilities round RealPage’s YieldStar lease optimization software program, which makes use of an algorithm to suggest pricing primarily based on market information. Schwalb alleges that by feeding information into YieldStar and adhering to its pricing recommendations, D.C.’s largest landlords successfully shaped a “cartel” that distorted the market.
One former high-level worker of defendant Greystar Administration Companies admitted landlords used the software program particularly to lift rents in unison, in response to the criticism. It additionally cites inner paperwork displaying landlords had been anticipated to intently comply with RealPage’s pricing in practically all instances.
This marks the most recent authorized motion in opposition to RealPage’s pricing practices, which have confronted rising scrutiny. The Division of Justice opened an antitrust investigation into the corporate final yr following a ProPublica investigation that exposed how YieldStar discourages negotiation and prioritizes excessive occupancy over decrease rents.
RealPage has maintained that it complies with antitrust legal guidelines and that its software program supplies a extra data-driven method to pricing than handbook strategies. The corporate didn’t reply to a request for touch upon the D.C. lawsuit.
Among the many defendants are outstanding actual property corporations, together with Greystar, Bozzuto Administration Firm, and Fairness Residential — which collectively personal and handle tens of 1000’s of models throughout D.C. Schwalb argues their coordination inflated rents by “lots of of {dollars} per 30 days” in a metropolis with a well-documented housing affordability disaster.
D.C. had the best median lease of any U.S. metropolis at over $2,100 final yr, in response to census information. The legal professional basic’s criticism estimates the alleged collusion generated over $200 million in extra rental revenue for defendants, depriving renters of honest market costs.
The lawsuit alleges violations of D.C.’s antitrust statutes and will search civil penalties and restitution for D.C. tenants impacted by inflated rents if profitable. It follows an identical price-fixing class motion go well with filed in opposition to RealPage and main landlords in California final yr.
Featured Picture Credit score: Picture by Ketut Subiyanto; Pexels; Thanks!
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