ATLANTA — The U.S. Department of Justice said it is expanding an antitrust lawsuit against property management software company RealPage, this time adding six landlord companies with national real estate holdings, including one in Atlanta.
According to the announcement, the USDOJ has added Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc and Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC and Cortland Management LLC as defendants in the lawsuit.
The lawsuit goes on to say the defendants participated in an “unlawful scheme to decrease competition among landlords in apartment pricing” and harmed millions of American renters by doing so.
Between the six companies named in the announcement, USDOJ said the landlords operate more than 1.3 million units in 43 states and Washington.
There are now also 10 states signed onto the lawsuit as co-plaintiffs, with Illinois and Massachusetts signing on to the amended complaint.
The Justice Department said Cortland, a real estate company based in Atlanta that was previously raided by federal agents, had signed a consent decree with them to cooperate with the government and stop using its competitors’ data to set rental prices.
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The agreement will also have Cortland “stop using the same algorithm as its competitors without a corporate monitor.”
“While Americans across the country struggled to afford housing, the landlords named in today’s lawsuit shared sensitive information about rental prices and used algorithms to coordinate to keep the price of rent high,” said Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “Today’s action against RealPage and six major landlords seeks to end their practice of putting profits over people and make housing more affordable for millions of people across the country.”
In December, Channel 2 Action News reported the White House said the City of Atlanta was the one most impacted by algorithm-based price setting, specifically mentioning RealPage’s software as a source.
Nationally, the White House said RealPage’s software products are used in at least 10% of rental properties.
“We find that coordinated rents from algorithmic pricing cost renters in algorithm-utilizing units $70 a month, or 4% of rent, on average nationally,” the White House report says.
But in Atlanta, that dollar count was an average of $181 instead.
RealPage told Channel 2 Action News that the White House report was full of flaws and disputed its claims.
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The companies named in the expanded antitrust lawsuit by the USDOJ collectively hold dozens of properties in the metro Atlanta area.
As published by federal officials, the amended complaint accuses the six landlord companies of actively participating in a scheme to set rental prices by using each other’s competitively sensitive information through common pricing algorithms.
The Justice Department said that along with using RealPage’s anticompetitive pricing algorithms, the companies they’re suing coordinated through a variety of means, including:
- Directly communicating with competitors’ senior managers about rents, occupancy, and other competitively sensitive topics
- In one example, Greystar supplied Camden with information not only about very recent renewal rates, but also its approach to pricing for the upcoming quarter, its acceptance of RealPage’s pricing recommendations, use of concessions and competitively sensitive information about occupancy. Likewise, executives at Camden and LivCor communicated over the course of months about their pricing strategies, including plans for certain price increases.
- Regularly conducting “call arounds”
- During these discussions, euphemistically referred to as “market surveys,” property managers called or emailed competitors to share, and sometimes discuss, competitively sensitive information about rents, occupancy, pricing strategies and discounts.
- Participating in “user groups” hosted by RealPage
- For instance, landlords discussed via user groups how to modify the software’s pricing methodology, as well as their own pricing strategies. In one example, LivCor and Willow Bridge executives participated in a user group discussion of plans for renewal increases, concessions and acceptance rates of RealPage rent recommendations.
- Sharing information with competitors about parameters in RealPage’s software
- As an example, at the request of Willow Bridge’s director of revenue management, Greystar’s director of revenue management supplied its standard auto-accept parameters for RealPage’s software, including the daily and weekly limits and the days of the week for which Greystar used “auto-accept.”
Currently, the co-plaintiffs in the case are the Attorneys General of California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee and Washington.
A Cortland spokesperson provided comment to Channel 2 Action News on the latest developments in the RealPage lawsuit and the previous investigation into the company, saying in a statement:
“Cortland is pleased to announce the US Department of Justice filed a proposed settlement that would resolve the Antitrust Division’s civil investigation into Cortland related to antitrust violations in the multifamily housing industry.
Additionally, last month, the Antitrust Division informed Cortland that it had closed its criminal investigation into pricing practices in the multifamily industry. As a result, Cortland and its employees are no longer subject to the criminal investigation that motivated the Department of Justice’s May 2024 search at Cortland’s headquarters in Atlanta.
We believe we were only able to achieve this result because Cortland has invested years and significant internal resources into developing a proprietary revenue management software tool that does not rely on data from external, non-public sources. The terms of Cortland’s settlement have been agreed to with the Department of Justice and will be filed with the court for its approval. We look forward to putting the federal government’s investigations behind us in 2025, as we continue to seek opportunities to invest in tools and services that will improve resident experience and the success of our managed communities.”
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