Justice Department Sues Major Landlords for Rent Price-Fixing

News Summary

The U.S. Justice Department has filed a landmark lawsuit against six major landlords, including Greystar Real Estate Partners, alleging they conspired to inflate apartment rents in Savannah, Georgia. This conspiracy involves the use of a shared pricing algorithm to manipulate market prices, impacting the affordability of housing across the nation. State attorneys general have joined the federal suit, reflecting widespread concern over rising rental costs. The outcome of this lawsuit could significantly affect renters and landlords alike, signaling potential changes in how rental prices are set in the future.

Savannah Under Scrutiny: Justice Department Sues Major Landlords for Rent Price-Fixing

In a bombshell legal move, the U.S. Justice Department has filed a massive lawsuit targeting six major landlords, one of which is the well-known Greystar Real Estate Partners LLC. With a significant presence in Savannah, Georgia, owning 11 properties in the area, Greystar finds itself facing serious allegations that could shake the very foundation of the housing market.

The Accusations

The lawsuit alleges that these landlords have engaged in a conspiracy to artificially inflate apartment rents, using sophisticated algorithmic pricing tools. According to federal prosecutors, Greystar and its counterparts conspired to stifle competition by sharing sensitive market data, which resulted in a significant uptick in rental prices. This alleged scheme has affected housing affordability and aligns with rising concerns for millions of renters across the United States.

The heart of the investigation points to a shared pricing algorithm, reportedly developed by RealPage, that these landlords have been using to set rental prices. The Justice Department contends that this collaborative pricing tactic has led to unreasonably high rent increases in various cities, Savannah included, where everyday people are struggling to find affordable housing solutions.

Who’s in the Hot Seat?

In addition to Greystar, the lawsuit targets the following landlords:

LivCor, a subsidiary of Blackstone
Camden Property Trust
Cushman & Wakefield Inc and Pinnacle Property Management Services LLC
Willow Bridge Property Company LLC
Cortland Management LLC

Collectively, these landlords manage over 1.3 million rental units across the country, extending across 43 states and Washington, D.C. The size of these operations means that the implications of this lawsuit could reach far beyond Savannah, affecting renters nationwide.

State Attorneys Join the Fight

This lawsuit isn’t just a federal matter. The attorneys general of several states, including Illinois and Massachusetts, have joined the lawsuit, raising the total number of state co-plaintiffs to ten. This coalition emphasizes the seriousness of the accusations and indicates that many states are banding together to tackle the ever-growing issue of rental affordability.

Settlement & Response

A proposed consent decree related to the case has already emerged, specifically involving Cortland. Under this potential settlement, Cortland would cease using RealPage’s pricing algorithm, stop sharing sensitive data, and fully cooperate with governmental investigations. These steps could set a precedent for how other landlords operate.

While Greystar rejects the allegations, asserting that it has always done business with integrity, it is gearing up for a legal battle to defend itself against these claims. The Justice Department believes that the landlords prioritized their profits at the expense of renters, and they intend to put a stop to these practices.

Tenant Reactions

In Savannah, tenants are reacting strongly to the news. For many, the rising rents have become unbearable. Local residents, including tenants from properties managed by Cushman and Wakefield, have expressed frustration over what they perceive as rent gouging. Tenant advocates are urging state lawmakers to take further action against these major landlords.

As the dust settles from this lawsuit, landlords and tenants alike are watching intently. The outcome could shape the future of rental pricing and housing affordability in Savannah and beyond. Will this lawsuit curb the alleged practices of these major landlords? Renters are hoping for change in an environment where the affordability of housing hangs in the balance.