Several large landlords allegedly colluded in an effort to keep apartment rents high, including by using an algorithm that influences prices, according to new legal filings by the Colorado attorney general, the U.S. Justice Department and a coalition of other states.
An amended complaint filed Tuesday added six landlords to an antitrust lawsuit levied last summer against RealPage, the software developer whose algorithms have faced scrutiny for their alleged role in fixing rents. The landlords added to the suit are Greystar, LivCor, Camden Property Trust, Cushman & Wakefield, Willow Bridge, and Cortland, all of which own or operate properties in Colorado and are among the largest landlords in the country.
Greystar alone has more than 45,000 units in Colorado, according to Lawrence Pacheco, a spokesman for Attorney General Phil Weiser. Cortland operates at least 15 apartment complexes here, equating to several thousand more units.
In a statement, Weiser’s office accused the companies of participating “in an unlawful scheme to decrease competition among landlords in apartment pricing, harming millions of American renters.” The suit accuses them of feeding their internal data into RealPage’s pricing algorithm, which was then used by the landlords to set and adjust their rental prices.
The suit also alleges that the companies directly communicated about rents and occupancy rates while participating in “user groups” organized by RealPage.
RealPage has denied allegations that it has facilitated price-fixing or otherwise broken the law, and the company is seeking the dismissal of the lawsuit. The Colorado Apartment Association has defended RealPage’s algorithm as a tool used by managers to help lower rents.
In statements to Reuters, Greystar denied the allegations; Cushman defended its subsidiary named in the suit, Pinnacle, as a property manager that couldn’t set prices; and Cortland said it did not rely on “external” data in price setting.
The Justice Department has already reached a settlement with Cortland, though Weiser said in a statement that Colorado was not “in a position to join” that deal, at least for now.
Denver renters have been particularly affected by RealPage’s algorithm and the landlords that use it, according to a recent analysis by the White House’s Council of Economic Advisors. The report found that Denver renters in affected properties pay $136 more per month on average because of the algorithms, the second-highest per-month cost among more than 20 metro areas examined.
Weiser’s office joined the Justice Department’s initial suit against RealPage in August, after advocacy groups urged the attorney general to investigate the company. He has pursued similar consumer-protection litigation in other areas, and he’s made that approach a part of his newly launched run for governor.
In May, state lawmakers unsuccessfully sought to ban the use of RealPage’s algorithm in Colorado, though their bill was torpedoed by Senate Republicans and a group of Senate Democrats.
That measure is set for a comeback in the legislative session that begins Wednesday.
On Tuesday, incoming Senate President James Coleman, a Denver Democrat, trumpeted the bill’s imminent arrival and said the increased public focus on RealPage’s practices would likely pave a path for the bill’s passage into law this year.
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