The Lawyer Common for the District of Columbia (DC) Brian Schwalb announced on Wednesday a lawsuit towards 14 of the town’s largest landlords. The grievance alleges that these landlords colluded with RealPage, a rental administration software program, to artificially inflate rental costs within the metropolis.
In a video assertion printed on his X (previously Twitter) web page, Schwalb likened the conduct of the landlords to a “housing cartel.” In response to the grievance, the landlords collectively set hire costs based mostly on RealPage’s expertise. Additionally they agreed to unlawfully “trade competitively delicate knowledge.” If true, the conduct doubtlessly violates the District of Columbia Antitrust Act.
RealPage’s income administration software program allegedly collected personal knowledge from the DC space, then used an algorithm to generate a revenue-maximizing rental value. Apparently, utilizing RealPage’s software program elevated hire earnings by between two and 7 p.c. Via communications and written agreements, the landlords agreed to delegate rental value setting to RealPage. Moreover, based on Schwalb, RealPage then enforced compliance with this settlement. When a rental proprietor tried to “override” the RealPage value for the unit, they had been contacted by a RealPage consultant. If the consultant couldn’t “persuade” the proprietor to adjust to the RealPage value, the problem was escalated to larger administration.
The conduct by the events was a marked change from the standard “free market” of rental costs, the place competitors often drives prices down. Particularly, the Workplace of the Lawyer Common (OAG) argued that the conduct violates § 28-4502 of the DC Code, which prohibits contract, mixture or conspiracy to restrain commerce.
The allegations by the OAG appear to be corroborated by unbiased data, which reveals a stark enhance in rental costs within the DC space over the past a number of years. Lots of the named defendants started utilizing RealPage expertise below 5 years in the past. Between 2021 and 2022, the typical value of a studio house increased by 23 p.c. The median earnings in that timeframe increased by simply 3.9 p.c. The typical value for a studio house is at the moment $2,358 per thirty days, which is about half of the typical month-to-month income within the space. The 14 actual property corporations named within the grievance are all massive companies, not simply from DC, however from locations like Houston and Seattle as nicely. The properties of those landlords characterize over 58,000 of the accessible multi-family housing items.
