D.C.’s Attorney General Schwalb is bringing a lawsuit against fourteen D.C. landlords and the ‘tech’ company Real Page, who are accused of price fixing (boldface mine):
The rent is too damn high in D.C., and Attorney General Brian Schwalb claims in a new lawsuit that a tech company illegally colluded with 14 of the city’s largest landlords to keep it that way.
Schwalb announced Wednesday that he’s filing a federal lawsuit against RealPage, a Texas-based company that works with big commercial property owners to help them set rent prices, for a series of antitrust violations. He alleges that the firm and 14 of its clients exchanged confidential pricing information to jack up rents for more than 50,000 apartments across the District, forcing tenants to pay millions more than they would’ve in a traditional real estate market.
The use of the company’s software, which recommends rent prices for apartments by using an algorithm to calculate what the market will bear, has become so widespread in the D.C. area that Schwalb argues it has ripple effects for tenants beyond just those renting apartments from RealPage’s clients. His attorneys charge that this is “potentially impacting all market participants” and “illustrates the significant, widespread effects of collusive adoption of RealPage’s algorithmic pricing models,” according to a release shared with Loose Lips ahead of the lawsuit’s filing.
“RealPage and the defendant landlords colluded to forgo traditional market competition in favor of a centralized, price-fixing scheme that artificially raises rents for District tenants, causing residents to pay millions of dollars above fair market prices,” Schwalb says in a statement. “They communicated openly about their anticompetitive scheme at public events and through advertising campaigns, and actively worked to recruit new members into what amounted to a District-wide housing cartel.”
…Much of this attention sprung from a ProPublica investigation of RealPage last year, which found evidence that the company’s executives and their clients have spoken openly about how this software has empowered them to raise rents higher than they would have otherwise.
…Combined with its “unrivaled access to proprietary data,” this has helped RealPage achieve a “dominant market position,” Schwalb argues. He believes something like 30 percent of D.C. apartments in buildings with five or more units and 60 percent of apartments in buildings with 50 or more units are controlled by RealPage clients. The latter figure shoots up to 90 percent when evaluating the D.C. region, more broadly.
My landlord is one of those cited, and when I asked last year, after being informed of an eight percent* increase, after a year where there had been several problems in my apartment and the building, why they were doing that, I was told, “There’s an algorithm at the central office and we can’t do anything about that**.” At the time, I had recently read the ProPublica article and wondered if they had something like Real Page–and they did!
By the way, I was’lucky’: many people in the building received a 22% increase, and it wasn’t an underpriced or cheap building to start with.
And, yes, we are eagerly looking forward to “unspecified monetary damages for this behavior.”
BuT wHy Do PeOpLe ThInK tHe EcOnOmY sUcKs?
**That property manager, now gone, was a fucking asshole, by the way.