Colorado has joined the U.S. Department of Justice and other states in a lawsuit against RealPage, a property management software company that allegedly worked with landlords to artificially inflate rental prices.
The lawsuit, filed in the U.S. District Court for the Middle District of North Carolina, says RealPage’s practice of collecting data on competitors’ rents and leases and using it to recommend rent increases despite market conditions “frustrates the natural forces of competition” and harms tenants.
“RealPage sells software to landlords that collects nonpublic information from competing landlords and uses that combined information to make price recommendations,” the lawsuit says, citing RealPage’s own description of its software, which “ensures that (landlords) take advantage of every possible opportunity to increase price even under the most downward or unexpected conditions.”
Colorado Attorney General Phil Weiser said in a statement that half of Colorado’s renters spend more than 30 percent of their income on housing, and that high rents are consistently reported to his office as one of the main problems.
“Tenants should benefit from healthy competition among landlords to find housing that fits their budget and needs. But RealPage’s software and market dominance have enabled landlords to collude to set rents, determine the number of apartments available on the market, and harm tenants by forcing them to pay rents above competitive levels,” Weiser said in a statement. “This anti-competitive behavior leads to rent increases. That’s why we filed this lawsuit to hold RealPage accountable and fight for tenants.”
The lawsuit also alleges that RealPage has a monopoly on commercial revenue management software, controlling about 80 percent of the market.
Jennifer Bowcock, RealPage’s senior vice president of communications and creativity, said in a statement that the company’s software was “deliberately designed to comply with regulatory requirements,” adding that the U.S. Department of Justice analyzed the company’s revenue management products without first raising objections.
“We are disappointed that after several years of education and cooperation on the antitrust issues surrounding RealPage, the Department of Justice has chosen this moment to bring a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” Bowcock said in a statement. “It is simply a distraction from the fundamental economic and policy issues driving inflation across our economy – and housing affordability in particular – that should be the focus of policymakers in Washington, DC.”
Bowcock added: “We believe the allegations made by the Department of Justice are without merit and will do nothing to make housing more affordable. We intend to vigorously defend ourselves against these allegations.”
In July, the business watchdog Accountable.US asked Weiser to investigate rental companies operating in Colorado that are accused of working with RealPage to fix rental prices in Washington, D.C. The accused companies include Mid-America Apartments, AvalonBay Communities, Equity Residential, Camden Property Trust and UDR. As of the end of March, Mid-America Apartments operated 1,202 units in Denver, AvalonBay Communities 1,539 units, Camden Property Trust 2,873 units, Equity Residential 2,505 and UDR 218 units.
The plaintiffs asked the court to stop RealPage from engaging in the “anti-competitive practices” described in the lawsuit. Other states included in the lawsuit include North Carolina, California, Connecticut, Minnesota, Oregon, Tennessee and Washington.
“A free market requires landlords to compete on the basis of merit, not coordinate pricing,” the lawsuit states. “Landlords should attract tenants by offering the combination of price and quality that seems most attractive to them.”
Editor’s note: This story first appeared on Colorado Newsline, part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) nonprofit organization. Colorado Newsline maintains its editorial independence. If you have any questions, contact Editor Quentin Young at [email protected]. Follow Colorado Newsline on Facebook and X.
