Authorities are investigating nine large apartment owners in Arizona for allegedly working with a software company to illegally raise rents. Among those involved are three companies that are responsible for 39 apartment complexes with thousands of units in Oklahoma.
The District of Columbia Attorney General’s Office is also pursuing software company RealPage Inc. and 14 Washington, D.C., apartment owners and managers for alleged rent-fixing, as the dispute continues over what many consider excessive COVID-related rent increases, which have been attacked by President Joe Biden and others.
RealPage helps landlords use a type of “dynamic pricing,” also known as “surge pricing” or “peak pricing,” where customers pay more during times of high demand and rents are re-set daily.
Settlements have been reached with some commercial landlords, including a case in the US state of Tennessee.
In addition, in response, Democratic U.S. Senator Elizabeth Warren of Massachusetts recently introduced her “American Housing and Economic Mobility Act,” and Democratic Senator Amy Klobuchar of Minnesota introduced the “Housing Acquisitions Review and Transparency (HART) Act,” which, among other things, aims to provide more housing.
They also called on Congress to pass Biden’s proposal for a 5% rent cap.
It is not known whether Oklahoma apartment rents were set using the software, although one of the companies told The Oklahoman that it does not use the software.
Newer apartments will likely use a dynamic approach to setting and resetting rent, whether using RealPage or other software, says David Dirkschneider, partner and broker at Capstone Cos.
“It’s more common for newer properties to do what’s called daily pricing, where rents are changed daily based on market conditions,” he said. “It’s not as common for older properties, but some do.”
“Essentially, it looks at what other properties are charging, compares that to the size of the units (number of beds and baths) available in the area and on your property, and gives you the information on what rents you should charge to maximize occupancy and rents. This doesn’t always yield the highest rents. Sometimes it’s recommended to charge less because there’s less demand for a particular unit type.”
Arizona landlords own or manage 8,727 individual apartments in Oklahoma City
The three companies sued in Arizona that manage apartments in Oklahoma own 8,727 individual housing units, according to their online marketing.
Neither Weidner Property Management LLC nor Greystar Management Services LP, two of the companies with apartments in Oklahoma, responded to inquiries about rents and the rent-setting process here.
Weidner, based in Kirkland, Washington, owns 15 complexes in OKC and five in Tulsa. Greystar, based in Charleston, South Carolina, owns nine properties in OKC and six in Tulsa.
The third, Apartment Management Consultants LLC of Salt Lake City, Utah, responded with a statement it released in February when Arizona Attorney General Kris Mayes filed a lawsuit against it and the others. AMC manages the student-focused Norman Creek Apartments in Norman, a complex in Broken Arrow and two in Tulsa.
“AMC has not encouraged any client/owner in its managed property portfolio to use RealPage (rental management) software,” the company said, noting that the owner of one of the 85 properties it manages has entered into a direct contract with RealPage. “AMC is not a party to that contract.”
Sierra Bennett, AMC’s regional communications director, added: “AMC does not use the product in question in managing its four Oklahoma properties and never has.”
RealPage denies allegations of rent fixing and denounces “false claims”
RealPage, in turn, condemned the lawsuits, “false claims” and critics’ continued “inaccurate and distorted portrayal of RealPage, our revenue management solutions and the many benefits we provide to residents and housing providers, including a healthier and more efficient rental housing ecosystem.”
RealPage, based in Richardson, Texas, did not respond to a request for comment from The Oklahoman, but has posted a press kit online outlining its response to the allegations.
“The purpose of RealPage (rental management system) is to optimize revenue – not to maximize rents. It provides rent recommendations in all directions: higher, lower or at the current rental price,” the company says.
The criticism is misguided, says Dana Jones, CEO and President of RealPage, online.
“Housing affordability should be the real focus,” Jones says. “RealPage is proud of the role our customers play in providing safe and affordable housing for millions of people. Despite the noise, we will continue to innovate with confidence and ensure our solutions continue to benefit both residents and housing providers.”
Details of Arizona Attorney General’s allegations against RealPage and corporate landlords
Mayes identified RealPage as the main cause of the excessive rent increases.
“Over the past two years, apartment rents in Phoenix and Tucson have increased by at least 30%, largely due to this conspiracy that suppressed fair competition and essentially established a rental monopoly in our state’s two largest metropolitan areas. RealPage and its co-defendants must be held accountable for their role in the astronomical rent increases forced on Arizona residents,” he said in a press release earlier this year.
The Arizona Attorney General’s Office stated that its complaint specifically alleges:
- “The accused landlords illegally colluded with RealPage to artificially increase rents and concealed their conspiracy from the public.”
- “RealPage’s conspiracy with its co-defendants, the landlords, violates both the Arizona Uniform State Antitrust Act and the Arizona Consumer Fraud Act.”
- “The defendants’ illegal practices artificially inflated rental prices and caused Phoenix and Tucson residents to pay millions of dollars more in rent.”
Senator Elizabeth Warren (D-Massachusetts) and a government watchdog group are calling for a closer look at housing companies that use RealPage
Recently, Warren, Bharat Ramamurti, the former deputy director of the White House National Economic Council, and representatives of the government watchdog group Accountable.US held a virtual press conference to discuss what they see as the profiteering practices of large landlords, including alleged illegal rent-fixing collusion using RealPage’s algorithmic software.
They called for government investigations into large landlords who use RealPage and for passage of Warren and Klobuchar’s bills and Biden’s 5% rent cap proposal.
“While the most important long-term solution to rising rents is a greater supply of affordable housing, short-term steps to prevent collusion and price gouging by large landlords would provide relief to renters in many markets across the country,” Ramamurti said during the briefing.
During the call, Accountable.US reviewed its recent analysis and found that the six largest publicly traded homebuilders – none of which operate in Oklahoma – collectively generated nearly $300 million in excess profits in the first quarter of 2024, “much of it due to rent increases.”
All six landlords named in the report have been sued in connection with their use of RealPage.
“Large corporate landlords are bleeding their tenants dry to make more profit,” says Caroline Ciccone, president of Accountable.US. “Many of the same CEOs who claimed they had no choice but to raise rent for ordinary Americans have turned around and bragged to shareholders about massive profit increases.”
Oklahoma City area apartments managed by Weidner Property Management LLC
- 35 Degrees North Apartment Houses, 371 units, 2800 NW 192
- Residential complexes in the Aviare Arts District, 303 units, 301 N Walker Ave.
- Brookwood Village Apartment Homes, 1,144 units, 9401 S Shartel Ave.
- The Edge at Midtown Apartments, 250 units, 1325 N Walker Ave.
- The Encore Apartment Homes, 396 units, 3916 NW 164
- Indigo Apartment Homes, 896 units, 12601 and 12701 N Pennsylvania Ave.
- Liberty Pointe Apartment Homes, 324 units, 6600 SE 74
- Lincoln at Central Park Apartment Homes, 708 units, 500 Central Park Drive
- The Metropolitan Apartment Homes, 329 units, 800 N Oklahoma Ave.
- Quail Landing Apartment Homes, 216 units, 14200 N May Ave.
- Stoneleigh on May Apartment Houses, 244 units, 14300 N May Ave.
- Sycamore farms apartments, 398 units, 14900 N Pennsylvania Ave.
- reApartment in the North Penn Apartments, 276 units, 14520 N Pennsylvania Ave.
- Villas at Countryside Apartment Homes, 360 units, 9501 S Interstate 35 Service Road, Moore.
- Weidner Property Management also manages Apartments in Tulsa: 71 in Tulsa Hills, The Enclave in Brookside, Lincoln Villas at Memorial, Memorial Creek and Woodland Park.
Apartments in the Oklahoma City area managed by Greystar Management Services, Charleston, South Carolina
- Album Quail Springs, 140 units, 14201 N Kentucky Ave.
- Magnolia Row, 87 units, 6300 W Memorial Road
- Muse Apartments, 302 units, 700 NW 4
- Pure OKC, 150 units, 3300 S Mustang Road, Yukon
- The Avenue at Norman, 302 units, 3301 12th Ave. SE, Norman
- The port, 65 units, 601 Robert S Kerr Ave.
- The residences in the OAK, 320 units, 5200 Oak St.
- West Village Apartments, 345 units, 835 W Sheridan Ave.
- Forest paths, 543 units, 12401 N MacArthur Blvd.
- Greystar Management Services also manages Apartments in Tulsa: Cascades at Southern Hills, Coventry Park, Eagle Point Apartments, NOMA Apartments, Parc 1010 and The Laurel.
Oklahoma Apartments managed by Apartment Management Consultants, Salt Lake City, Utah
- Norman Creek Apartments, 300 Hal Muldrow Drive, Norman
- Heights at Battle Creek, Broken Arrow
- Stonehaven Villas, Tulsa
- View of Yale, Tulsa
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Senior business writer Richard Mize has covered housing, construction, commercial real estate and related topics for the newspaper and Oklahoman.com since 1999. Reach him at [email protected]. Subscribe to his weekly newsletter, “Real Estate with Richard Mize.” You can support the work of Richard and his colleagues by purchasing a digital subscription to The Oklahoman. Currently, you can get 6 months of exclusive access for $1.
