Algorithmic Collusion: Major Landlords Face Antitrust Battle for Inflating Rent in North Carolina

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In a significant legal move, North Carolina Attorney General Jeff Jackson has joined forces with the U.S. Department of Justice and attorneys general from 10 states to sue six major landlords accused of colluding to inflate rents using RealPage’s pricing algorithms. These landlords, which include Greystar Real Estate Partners LLC and Willow Bridge Property Company, allegedly exploited sensitive data and artificial intelligence to keep rents high, negatively impacting renters across North Carolina and beyond.

Unveiling the Allegations: Major Landlords Accused of Rent Collusion

The lawsuit accuses the six landlords of using RealPage’s software to share non-public data and align rent prices, resulting in artificially high housing costs. According to the Justice Department, the landlords’ practices affected more than 1.3 million rental units across 43 states. The software reportedly enabled property managers to coordinate rental rates by analyzing sensitive data, including renewal rates, occupancy levels, and future pricing strategies.

Evidence submitted by the Justice Department includes emails and meeting notes that show property managers from Greystar, Cushman & Wakefield, and others discussing pricing tactics. One email highlighted how a Cushman & Wakefield manager dismissed concerns about “price-fixing laws,” suggesting that competitors continue sharing data to “preserve rent integrity.” These communications form the backbone of the government’s case against the landlords.

How Rent Collusion is Hurting North Carolinians

The alleged collusion has had a severe impact on renters in North Carolina, where the housing market is already strained. AG Jeff Jackson noted that two of the accused companies own 14 properties in Southeastern North Carolina, including Wilmington and Leland. These properties account for a significant portion of one-bedroom and two-bedroom apartments in the area, where rental prices have surged in recent years.

“North Carolinians are struggling to afford their rent as it is,” Jackson stated. “We won’t stand for landlords and real estate companies making the problem worse to line their own pockets.” The lawsuit alleges that the coordinated efforts to inflate rents forced residents to pay more than fair market value, exacerbating financial hardships and driving some to the brink of eviction.

What’s at Stake for the Accused Landlords?

If found guilty, the major landlords face significant legal and financial consequences. The Justice Department has proposed a settlement for one defendant, Cortland Management LLC, which includes strict limitations on using competitors’ data and algorithms for rent setting. This settlement could serve as a blueprint for penalties against the other landlords.

In addition to financial penalties, the landlords may be subjected to ongoing monitoring by court-appointed officials to ensure compliance with antitrust laws. They could also face reputational damage, which may impact their ability to attract tenants and investors. Moreover, tenants affected by inflated rents could pursue civil lawsuits for compensation, further increasing the defendants’ legal exposure.

Reshaping the Housing Market: The Far-Reaching Impact of the Lawsuit

The case against RealPage and the major landlords highlights a critical issue in the U.S. housing market: the role of technology in exacerbating affordability crises. While RealPage argues that its software is legally compliant and helps landlords optimize revenue, critics contend that its use has stifled competition and driven up rents nationwide. This case may set a precedent for stricter regulations on the use of algorithms in property management, aiming to prevent similar collusion in the future.

Housing advocates hope the lawsuit will lead to more transparency and fairness in the rental market. If successful, the legal action could prompt other states to investigate and challenge similar practices, potentially leading to systemic changes in how rental prices are set.

Conclusion: A Landmark Case for Renters

The lawsuit against RealPage and six major landlords is a pivotal moment in addressing housing affordability in the U.S. With mounting evidence of collusion and price manipulation, the outcome of this case could reshape the rental market and provide relief for millions of renters. As Attorney General Jackson emphasized, holding these landlords accountable is a critical step toward ensuring fair and affordable housing for all.

Do you think AI-powered rent-setting tools harm renters or help stabilize housing markets? Tell us what you think!

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