Phil Weiser, Justice Department add big landlords to price-fixing suit

Several large landlords allegedly colluded to try to keep apartment rents high, including by using an algorithm that influences prices, according to new legal documents filed by the Colorado attorney general, the U.S. Department of Justice and a coalition of other states.

An amended complaint filed Tuesday added six landlords to an antitrust lawsuit filed last summer against RealPage, the software developer whose algorithms have come under scrutiny for their alleged role in setting 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 owns 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 there, which equates to several thousand additional units.

In a statement, Weiser’s office accused the companies of participating in “an illegal scheme to lessen competition among landlords in apartment prices, thereby harming millions of American renters.” The suit accuses them of feeding their internal data into RealPage’s pricing algorithm, which was then used by landlords to set and adjust their rental prices.

The suit also alleges that the companies communicated directly about rents and occupancy rates while participating in “user groups” organized by RealPage.

RealPage has denied allegations that it facilitated price fixing or broke the law, and the company is seeking dismissal of the lawsuit. The Colorado Apartment Association has defended RealPage’s algorithm as a tool used by managers to help reduce rents.

In statements to Reuters, Greystar denied the allegations; Cushman defended his subsidiary named in the suit, Pinnacle, as a property manager incapable of setting prices; and Cortland said it does not rely on “external” data to set prices.

The Justice Department has already reached an agreement with Cortland, although Weiser said in a statement that Colorado is not “in a position to rejoin” that agreement, at least at this time.

Denver renters have been particularly affected by RealPage’s algorithm and the landlords who use it, according to a recent analysis by the White House Council of Economic Advisers. The report found that Denver renters in affected properties paid an average of $136 more per month due to the algorithms, the second highest monthly cost among more than 20 metro areas examined.

Weiser’s office joined the Justice Department’s initial lawsuit against RealPage in August, after advocacy groups urged the attorney general to investigate the company. He has filed similar consumer protection lawsuits in other areas, and he has incorporated that approach into his new campaign for governor.

In May, Colorado state lawmakers unsuccessfully attempted to ban the use of RealPage’s algorithm, although their bill was torpedoed by Senate Republicans and a group of Senate Democrats.

This measure is expected to return during the legislative session which begins Wednesday.

On Tuesday, new Senate President James Coleman, a Denver Democrat, trumpeted the bill’s imminent arrival and said increased public attention to RealPage’s practices would likely pave the way for passage of the bill. bill this year.

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