A major driver of inflation , median U . S . asking rents grew year-over-year by as much as 18 % this spring , before the growth rate slowed this fall , according to a study by real estate firm Redfin . This came , the representatives noted , after the 10 biggest publicly traded apartment companies saw profits rise by more than 50 % last year , to almost $ 5 billion .
The Justice Department and Federal Trade Commission did not respond to requests for comment .
The House letter adds to growing legal and regulatory pressure on RealPage . U . S . Sen . Sherrod Brown recently sent a similar request to the FTC calling for a review of the company ’ s practices . Last month , renters filed a lawsuit in San Diego alleging the company facilitated collusion among nine of the nation ’ s biggest property managers . Two more lawsuits have been filed since then . All of them seek class action status .
One suit filed Friday on behalf of two Seattle renters alleges a broad pattern of collusive behavior by RealPage and a group of 10 large property managers .
It says that in addition to using RealPage software to inflate rents in downtown Seattle , property managers had employees call competitors regularly seeking detailed nonpublic information on what they were charging — which the employees would change their prices to match . The lawsuit quoted what it said was a former employee of Greystar , the country ’ s largest property management firm .
“ You ’ d call up the competition in the area ,” the former employee said , according to the lawsuit . “ Sometimes there ’ d be a list of 10 people to call . Sometimes just one . You ’ d ask what they are charging for their apartments . Then you ’ d literally change the prices right there on RealPage . Manually bump it up .
“ It was price-fixing ,” the employee continued , according to the lawsuit . “ What else can you call it when you ’ re literally calling your competition and changing your rate based on what they say ?”
The lawsuit quoted another former Greystar employee who described making similar calls in Seattle . The worker said someone from another property manager would call looking for pricing information two or three times a day , and added , “ If somebody called me looking for numbers , I ’ d tell them and then turn around and say , ‘ now it ’ s your turn . What are your numbers ?’”
The lawsuit said that publicly available data showed that advertised rates for the properties offered by the defendants in the suit in the Seattle area were “ consistently higher ” than those of nondefendants .
Greystar and nine other firms named in the lawsuit did not immediately respond to requests for comment .
ProPublica found RealPage ’ s pricing software to be widely used in downtown Seattle , where rents have climbed steeply in recent years . In one neighborhood , ProPublica found , 70 % of apartments were overseen by just 10 property managers , every single one of which used RealPage ’ s pricing software .
Another lawsuit , filed by the same group of lawyers earlier this month in U . S . District Court in Seattle , accused RealPage of helping landlords engage in anti-competitive behavior in the student housing market .
That lawsuit alleges that a University of Washington student paid higher rent prices because of collusion between landlords using RealPage ’ s software .
The lawsuit names as defendants some of the largest real estate firms in the world , including Greystar and Cushman & Wakefield . It accuses them of artificially inflating rent in such college towns as Seattle ; Eugene , Oregon ; Tucson , Arizona ; Salt Lake City , Utah ; Ann Arbor , Michigan ; Columbus , Ohio ; and Gainesville , Florida .
A spokesperson for Cushman & Wakefield , which also owns another firm named in the lawsuit , declined to comment .
In response to the San Diego lawsuit alleging collusion , a RealPage representative said the company “ strongly denies the allegations and will vigorously defend against the lawsuit .” RealPage has said that the company “ uses aggregated market data from a variety of sources in a legally compliant manner .” RealPage did not immediately respond to a request for comment on the new lawsuits and congressional letter .
RealPage said previously that its revenue management software prioritizes a property ’ s own internal supply and demand dynamics over such external factors as competitors ’ rents . In an earlier statement , the company said its software helps eliminate the risk of collusion that could occur with manual pricing involving phone surveys of competitor prices .
RealPage ’ s software uses an algorithm to churn through a trove of data to suggest rent prices . The software uses not only information about the apartment being priced and the property where it is located , but also private data on what nearby competitors are charging in rents . The software considers actual rents paid to those rivals , not just what they are advertising , the company told ProPublica .
ProPublica ’ s investigation found that the software ’ s design and reach have raised questions among experts about whether it is helping the country ’ s biggest landlords indirectly coordinate pricing — potentially in violation of federal law .
Six other firms named in the student housing lawsuit did not immediately respond to requests for comment . One could not be reached .
The lawsuit alleges that before property managers began using RealPage ’ s software in around 2009 , the student housing market in the U . S . was competitive , with landlords offering concessions and giveaways as incentives . It says that RealPage called such maneuvers leaving “ money on the table .”
With the software , landlords in the highly concentrated market for student housing found they could set a “ top tier price ,” the lawsuit says . It adds that the company claims to have a comprehensive data set that includes key performance indicators for nearly 1,000 universities . YieldStar Student , pricing software tailored for student housing , served more than 50 clients as of 2019 , the company claimed , according to the suit .
Clients submit detailed internal data on the rent they are charging for each unit to RealPage , the lawsuit says , citing the
46 x The Trial Lawyer