The Department of Justice has submitted a revised complaint against RealPage.
The property management software firm RealPage is once again facing scrutiny from the U.S. Department of Justice.
On January 7, the agency, along with several state co-plaintiffs, submitted an amended complaint in its antitrust case against RealPage, incorporating some of the largest multifamily companies in the United States into the lawsuit. Changes in the case's scope: In addition to RealPage, the defendants now include six prominent rental investment or management firms—Greystar, LivCor, Camden, Cushman, Willow Bridge, and Cortland—which collectively manage over 1.3 million units across 43 states and the District of Columbia, as stated in a DOJ news release.
These companies utilized RealPage's pricing algorithms, which the agency deems anticompetitive, and "engaged in an unlawful scheme to reduce competition among landlords in apartment pricing, adversely affecting millions of American renters," according to the release.
"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," said Doha Mekki, acting assistant attorney general of the Justice Department's antitrust division.
"Today's action against RealPage and six major landlords seeks to end their practice of putting profits over people and make housing more affordable for millions of people across the country," Mekki added.
In addition to the newly added defendants, attorneys general from Illinois and Massachusetts have also joined the plaintiffs. A swift development: Last month, it seemed that the DOJ was concluding its investigation into RealPage, as indicated by a company announcement. The original lawsuit was filed in August, with attorneys general from California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, and Washington participating at that time.
The company has staunchly defended its business practices by launching a website aimed at countering what RealPage President and CEO Dana Jones describes as "false claims." RealPage asserts that it frequently advises clients to reduce rental prices when market conditions necessitate such adjustments, emphasizing that the company "takes pride in the role our customers play in providing safe and affordable housing to millions."
What RealPage had to say:
In response to the amended filing, the company said it is "disappointed that the DOJ, just one month after abandoning its baseless criminal investigation and less than two weeks before the agency changes hands, is expanding its civil lawsuit related to use of revenue management software. Fewer than 10% of all rental housing units in the U.S. use RealPage software to suggest rental prices, and our software recommendations are accepted less than half the time, as the DOJ has acknowledged."
RealPage also noted its "software was purposely built to be legally compliant," arguing that "it's past time to stop scapegoating RealPage — and now our customers — for housing affordability problems when the root cause of high housing costs is the under-supply of housing which we have been saying from the beginning."
Furthermore, RealPage pointed out that its "software was intentionally designed to comply with legal standards," contending that "it is time to cease blaming RealPage — and now our customers — for issues related to housing affordability, as the fundamental cause of elevated housing costs is the insufficient supply of housing, a point we have consistently maintained."
In a potential resolution for one of the defendants, the DOJ has proposed a consent decree with Cortland, one of the six landlords implicated in the lawsuit. If the court approves this agreement, the DOJ would drop all claims against Cortland, which manages 80,000 rental units across 13 states. In exchange, Cortland would agree to assist with the agency's investigation and refrain from utilizing third-party software or algorithms for apartment pricing without oversight from a court-appointed monitor.
