US Justice Department Sues Landlords for Alleged Rent-Setting Scheme
Landlords Accused of Coordinating to Keep Rents High
The US Justice Department is suing several landlords for allegedly coordinating to keep Americans’ rents high by using an algorithm to help set rents and privately sharing sensitive information with their own competitors to boost profits. The lawsuit is a major development in the ongoing housing crisis, which has seen US renters struggle to keep up with rising rental costs.
Renters Struggle to Afford Housing
The latest figures show that half of American renters spent more than 30% of their income on rent and utilities in 2022, an all-time high. This means exhausting, day-to-day decisions between medications, groceries, school supplies, and rent. It also means eviction notices and protracted court cases, with 1.5 million evictions each year, according to Princeton University’s Eviction Lab.
Landlords Under Fire
The Justice Department, along with 10 states, is accusing six landlords of scheming to avoid lowering rents. The landlords, including Greystar Real Estate Partners LLC, are being accused of sharing sensitive data on rents and occupancy with competing firms via email, phone calls, or in groups. This information includes renewal rates, how often they accept an algorithm’s price recommendation, and even their approach to pricing for the next quarter.
RealPage’s Algorithm Under Scrutiny
The lawsuit also targets RealPage, which runs an algorithm that recommends rental prices to landlords. Prosecutors say the algorithm uses sensitive competitive information, allowing landlords to align their prices, avoiding competition that would otherwise push down rents.
Landlords’ Response
Greystar Real Estate Partners LLC declined a request for comment, but published an unsigned statement on its website. "Greystar has and will conduct its business with the utmost integrity. At no time did Greystar engage in any anti-competitive practices. We will vigorously defend ourselves in this lawsuit."
Conclusion
The US Justice Department’s lawsuit is a significant step towards addressing the housing crisis, which has left millions of Americans struggling to afford housing. By accusing landlords of coordinating to keep rents high, the government is taking a bold step towards ensuring that housing is made more affordable for millions of people across the country.
Frequently Asked Questions
Q: What is the US Justice Department accusing landlords of?
A: The Department is accusing landlords of coordinating to keep Americans’ rents high by using an algorithm to help set rents and privately sharing sensitive information with their own competitors to boost profits.
Q: Which landlords are being sued?
A: The lawsuit names six landlords, including Greystar Real Estate Partners LLC, which operates more than 1.3 million units in 43 states and the District of Columbia.
Q: What is the impact of the housing crisis on renters?
A: The latest figures show that half of American renters spent more than 30% of their income on rent and utilities in 2022, an all-time high. This means exhausting, day-to-day decisions between medications, groceries, school supplies, and rent, and often leads to eviction notices and protracted court cases.
