The US Department of Justice is accusing six major landlords of conspiring to keep rents high

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DENVER (AP) – The U.S. Justice Department is indicting several large landlords for allegedly conspiring to keep Americans’ rents high by using both an algorithm to help set up tenants and secretly sharing sensitive information with their competitors to boost profits.

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The lawsuit comes as American renters continue to struggle under a merciless housing market, with incomes failing to keep up with rising rents. The latest statistics show that half of American employers will spend more than 30% of their rent on utilities by 2022, a record high.

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That means grueling, daily decisions between medicine, groceries, school supplies and rent. It means eviction notices and lengthy court cases where children face the highest rate of evictions, with 1.5 million evictions each year, according to Princeton University’s Eviction Lab.

While the housing crisis has been attributed to many reasons, including the collapse of housing stock built over the past decade, the Justice Department’s lawsuit alleges that large landlords played a role.

The department, along with 10 states including North Carolina, Tennessee, Colorado and California, accuses six landlords who operate more than 1.3 million units in 43 states and the District of Columbia of schemes to avoid reducing rents.

Landlord Greystar Real Estate Partners LLC, a defendant in the case, declined a request for comment from The Associated Press, but published an unsigned statement on its website.

“Greystar has and will conduct its business with utmost integrity. “Greystar has never engaged in anti-competitive practices,” the statement read. “We will defend ourselves vigorously in this case.”

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The lawsuit accuses landlords of sharing sensitive rent and occupancy data with competing companies via email, phone calls or groups. The information shared includes renewal rates, how often they accept the algorithm’s price recommendation, the use of concessions such as offering one month free, and their pricing strategy for the next quarter.

The Department of Justice said one of the six homeowners agreed to cooperate with prosecutors. The proposed solution would limit how a company can use its competitors’ data and algorithms to set rents.

“Today’s action against RealPage and six other landlords seeks to end their practice of putting profits over people and making housing more affordable for millions of people across the country,” Doha Mekki, acting assistant attorney general in the department’s antitrust division, said in a statement Tuesday. release.

Those landlords have been added to an existing lawsuit against RealPage, which uses an algorithm to recommend rental rates to landlords. Prosecutors say the algorithm uses sensitive competitive information, allowing landlords to match their prices and avoid competition that could lower rents.

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Jennifer Bowcock, senior vice president of communications at RealPage, said in a statement to the AP that their software is used by less than 10% of US rental units, and that their price recommendations are used less than half the time.

“It’s past time to stop bashing RealPage — and now our customers — about housing affordability issues when the root cause of high housing costs is a lack of housing,” Bowcock said.

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Bedayn is a member of the Associated Press/Reporting America Statehouse News Initiative team. Report for America is a national nonprofit service program that places journalists in local newsrooms to report on hidden stories.

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