The Washington D.C. Attorney General recently filed a lawsuit alleging that at least 14 of the district’s major landlords were colluding to raise rents.
The Washington D.C. Attorney General Brian Schwalb recently filed a lawsuit against 14 of the District’s largest landlords for allegedly colluding to hike rents above market rates. The suit against RealPage, Inc. (RealPage) and 14 of the largest residential landlords in the District asserts that the parties colluded to illegally raise rents for tens of thousands of residents by collectively delegating price-setting authority to RealPage, which used a centralized pricing algorithm to inflate prices, costing renters millions of dollars.
The 14 landlords named in the lawsuit are:
- Avenue5 Residential, LLC
- AvalonBay Communities, Inc.
- Bell Partners, Inc.
- Bozzuto Management Company
- Camden Summit Partnership L.P.
- Equity Residential Management, LLC
- Gables Residential Services, Inc.
- GREP Atlantic, LLC
- Highmark Residential, LLC
- JBG Smith Properties, LP
- Mid-America Apartments, LP
- Paradigm Management II, LP
- UDR, Inc.
- William C. Smith & Co., Inc.
Specifically, OAG’s lawsuit alleges that:
- RealPage and the defendant District landlords colluded to use RealPage’s “Revenue Management” technology, making it market-dominant. RealPage contracts with property managers and owners to provide its software and services. The company’s unparalleled access to proprietary data and significant market share have positioned it as the “Big Tech” company of rental housing.
- The defendant landlords illegally coordinated to forgo competition and share sensitive company data and delegate rent-setting authority to RealPage in order to raise rents. RealPage and the defendant landlords transformed a competitive marketplace into one in which competing landlords work together for their collective benefit at the expense of renters. Their anticompetitive agreement is reflected in documents, has been publicly acknowledged by cartel members, and is closely policed by RealPage to ensure compliance. Participating landlords worked to recruit additional landlords into the illegal scheme, providing written and oral testimonials touting the benefits of using RealPage’s technology to inflate rent prices and increase revenues.
- The defendants’ illegal agreement to share information and collectively set rents led to artificially inflated rental prices and caused District tenants to pay millions of dollars above market rates. RealPage widely touts the impact of its products, publicly advertising revenue increases of 2-7%. Where RealPage’s market penetration increases, price effects tend to extend beyond just the users of the price-setting software itself, potentially impacting all market participants, illustrating the significant, widespread effects of the adoption of RealPage’s algorithmic pricing.
Impact on Maryland
While the DC Attorney General’s lawsuit may not directly impact Maryland’s housing landscape, policymakers will be keeping a close eye on how it unfolds. For some time now, Maryland’s state and county leaders have been keenly interested in addressing the rising cost of housing. The 2023 legislative session saw a record number of bills introduced in the General Assembly, a sizeable portion of which covered housing. Governor Moore is expected to announce his housing package sometime this month. Meanwhile, counties have even been taking their own bold actions, the most recent of which is Howard County’s HOME Affordable Housing Package. Also, last month, MACo’s legislative committee, which is comprised of representatives from all 24 counties, unanimously adopted advancing comprehensive housing solutions as one of its top four legislative initiatives for the 2024 legislative session. Housing is a hot topic not only in Annapolis but nationally, and it will surely stay that way for some time.
MACo Winter Conference
At the 2023 MACo Winter Conference general session, “Housing – What’s New, What’s Next,” county leaders will hear from the Secretary of the Maryland Department of Housing and Community Development and the Secretary of the Maryland Department of Planning on what the state and counties can do to address the housing crisis.
MACo’s Winter Conference, “Eye of the Storm,” is scheduled for December 6-8, 2023, at the Hyatt Regency Chesapeake Bay Hotel in Cambridge, MD. More information can be found on our conference website.
Learn more about MACo’s Winter Conference:
- Attendee Brochure (with full schedule)
- Exhibitor Details & Waitlist
- Sponsorship Opportunities
- Hotel Details (SOLD OUT – waitlist info)
- Winter Conference Photos