Rents are on the rise, and the Justice Department warns that in certain instances, this increase may be unlawful.
The Department of Justice (DOJ) has taken legal action against six prominent landlords by filing an antitrust lawsuit on Tuesday. The lawsuit alleges that these landlords colluded to maintain high rent prices.
Houston-based companies such as Camden, Greystar, Cushman & Wakefield, LivCor, Cortland, and Willow Bridge are among the landlords who have control over 1.3 million apartment units.
Legal analyst Brian Wice emphasized the significance of collaboration and conspiracy, rather than mere cooperation.
During a purported conversation in April 2022, a LivCor executive reportedly stated, “Prices for nearly everything have risen by 20%. So, unless there is a compelling reason not to, should we consider raising rates on rentable items by 20%?”
The Camden executive reportedly responds, “I really like your thinking.”
“It’s truly unfortunate. It’s a real pity,” expressed Christa Stoneham, the CEO of the Houston Land Bank.
Stoneham mentioned that a significant number of individuals she is assisting are facing challenges due to rising rental prices.
She expressed her sympathy, acknowledging the unfortunate reality of people exploiting others and their vulnerable circumstances.
The lawsuit alleges that one property manager refused to share information with another company, citing concerns about price-fixing.
When the Greystar property manager shared this information with the Cushman & Wakefield property manager, the latter responded, “Hmm… Price fixing laws, huh? That’s interesting! Well, I’m glad to continue sharing, so feel free to ask any questions you have.”
The Department of Justice (DOJ) filed a lawsuit against RealPage, a company based in Texas, in August. The lawsuit is in relation to RealPage’s YieldStar software, which is used by landlords to aggregate private rent data for the purpose of determining rental prices.
According to the amended lawsuit filed on Tuesday, the landlords mentioned are allegedly utilizing the software.
“They have the ability to artificially inflate rental prices, even during times of extreme desperation,” Wice explained.
The Department of Justice (DOJ) has already put forward a settlement proposal with Cortland, a company that oversees 12 apartment complexes in the Houston area.
As part of the settlement, Cortland must cease sharing and receiving non-public data with competing companies and discontinue the use of RealPage software.
In a statement, Cortland expressed its satisfaction with the filing of a proposed settlement by the US Department of Justice. The settlement is aimed at resolving the Antitrust Division’s civil investigation into Cortland’s involvement in antitrust violations within the multifamily housing industry.
In a recent statement, Greystar expressed their perspective on the matter.
“We are deeply disappointed by the Department of Justice’s decision to include us and other operators in their lawsuit against RealPage. Greystar has always operated with the highest level of integrity and has never engaged in any anti-competitive practices. We will strongly defend ourselves in this lawsuit.”
The other landlords mentioned in the lawsuit did not respond to requests for comment.