The U.S. Department of Justice (DOJ), along with ten states, sued six large landlords this week, alleging an unlawful scheme to inflate rents using algorithmic tools and sensitive data sharing. The amended complaint, following an August complaint against property management software company RealPage, accuses landlords, including Cushman & Wakefield, Greystar Real Estate Partners, and Blackstone’s LivCor, of manipulating the rental market through a pricing algorithm developed by RealPage Inc.
The amended complaint highlights that the landlords, who collectively manage over 1.3 million rental units across 43 states, collaborated using RealPage’s pricing software. The DOJ claims this software utilized sensitive market data to recommend rental prices that would align with competitors, thereby eliminating the downward pricing pressure that competition typically enforces.
According to the DOJ, in addition to using RealPage’s algorithms, the landlords schemed to use each other’s sensitive information to set their rents via direct communication between managers, “call arounds” during which property managers would share information as part of a “market survey,” discussing how to modify RealPage’s pricing methodology in “user groups” hosted by the software company, and sharing RealPage parameters.
DOJ Acting Assistant Attorney General Doha Mekki stated, “While Americans across the country struggled to afford housing, the landlords named in today’s lawsuit shared sensitive information about rental prices and used algorithms to coordinate to keep the price of rent high.” This alleged collusion affected millions of renters already burdened by rising costs.
RealPage defended its algorithm, emphasizing that it is utilized on less than 10% of U.S. rental units and asserting that housing shortages are the primary driver of high rents, not their software.
Cortland Management, one of the accused landlords, agreed to cooperate with the DOJ and stop using common rental pricing algorithms and competitively sensitive data to set rents as part of a settlement agreement.
Additional Reading
Justice Department Sues Six Large Landlords for Algorithmic Pricing Scheme that Harms Millions of American Renters, Office of Public Affairs, U.S. Department of Justice (January 7, 2025)
US Justice Department accuses six major landlords of scheming to keep rents high, AP News (January 7, 2025)
US sues Cushman & Wakefield, other landlords over alleged rental price coordination, Reuters (January 7, 2025)
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