WASHINGTON (AZ Family/AP) — The Justice Department filed an antitrust lawsuit against real estate software company RealPage Inc. on Friday, accusing it of an illegal system that allows landlords to coordinate on raising rents.
The lawsuit, filed jointly with the attorneys general of states including North Carolina and California, accuses the company of violating antitrust laws with its algorithm, which landlords use to determine recommended rental prices for millions of apartments across the country.
In Arizona, the state’s Attorney General, Kris Mayes, sued RealPage and nine corporate landlords, accusing them of illegally fixing prices for apartments and other rental properties in the Phoenix and Tucson metropolitan areas.
“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,” Mayes said in a press release Wednesday morning.
Which condominiums or operators are named in the Arizona lawsuit?
According to Mayes, 36% of households in Phoenix are renters, and their rents have increased 76% since 2016. In Tucson, however, 37% of households are renters, and their rents have increased 30%.
“Earlier this year, I called on the administration to investigate RealPage because I saw the negative impact their unfair practices were having on Arizonans – raising rents and overcharging hard-working families by more than 10 percent,” said Rep. Ruben Gallego. “I’m glad the Department of Justice has followed my lead and is working to stop these unfair, anti-competitive practices. I will never stop fighting for the affordable housing Arizonans deserve.”
Rents in the United States have risen tremendously in 2021 and 2022. Although their growth has now slowed, they remain stubbornly high for many renters, due in part to a huge shortage of housing.
Justice Department officials claim that RealPage is another reason for high rents because its algorithm allows landlords to match their prices and avoid competition that would otherwise keep rents low.
“Americans should not have to pay more rent just because a corporation found a new way to conspire with landlords and break the law,” Attorney General Merrick Garland told reporters.
In a statement, RealPage said the Justice Department’s demands were “baseless and would do nothing to make housing more affordable.”
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