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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 line with a Nov. 1 ArsTechnica report, the civil criticism accuses the landlords of conspiring with RealPage, a Texas-based supplier of lease pricing software program, of fixing rental charges above truthful market worth. It claims the alleged scheme affected over 30% of residence buildings with 5 or extra items and 60% of buildings with 50 or extra items in D.C.
RealPage and the defendant landlords illegally conspired to artificially increase rents by taking part in a centralized, anticompetitive scheme, inflicting District residents to pay thousands and thousands of {dollars} above truthful market costs,” mentioned Schwalb.
The lawsuit facilities round RealPage’s YieldStar lease optimization software program, which makes use of an algorithm to advocate pricing based mostly on market information. Schwalb alleges that by feeding information into YieldStar and adhering to its pricing options, D.C.’s largest landlords successfully fashioned 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, based on the criticism. It additionally cites inside paperwork displaying landlords have been anticipated to carefully comply with RealPage’s pricing in almost all instances.
This marks the newest 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 gives a extra data-driven strategy 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 items 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 very best median lease of any U.S. metropolis at over $2,100 final yr, based on census information. The lawyer common’s criticism estimates the alleged collusion generated over $200 million in extra rental earnings for defendants, depriving renters of truthful 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 the same price-fixing class motion swimsuit 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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