Largest US landlord to pay $7 million to settle rent‑setting algorithm lawsuit
Greystar, the nation’s largest landlord, reached a $7 million settlement with nine states that sued the property management giant for its use of rent-setting algorithms that officials accused of driving up housing costs.
The proposed settlement, filed Tuesday in North Carolina federal court, is the latest settlement to arise from antitrust lawsuits targeting RealPage and similar software companies. Prosecutors argue the products helped rival property managers illegally set prices and raise rents. A judge still must approve the settlement.
“Colluding to raise prices is illegal, whether through smoke-filled backroom deals or through an algorithm on your computer screen,” Democratic California Attorney General Rob Bonta said in a press release. “Families across the country are facing an affordability crisis. Companies that deliberately fuel this unaffordability by raising prices to line their own pockets can rest assured that I will use the full power of my office to hold them accountable.”
As part of the agreement, Greystar will no longer use software that relies on other landlords’ confidential data to determine rents. Greystar also agreed last month to pay $50 million in a class-action lawsuit over its use of RealPage. In August, the company reached a separate non-monetary settlement with the Justice Department to stop similar practices.
“We are pleased that this matter has been resolved and we can continue to focus on serving our residents and customers,” Greystar said in a statement Wednesday.
Headquartered in South Carolina, Greystar manages more than 946,000 units nationwide, according to the National Multifamily Housing Council. Texas-based RealPage said its software is used in less than 10% of rental units in the U.S. and its price recommendations are used in less than half. There was no comment regarding the latest agreement.
RealPage denies any wrongdoing and argues that the plaintiffs misunderstood how their product worked. He argues that the real cause of high rents is a lack of housing supply, and says pricing proposals often encourage landlords to lower rents because they are incentivized to maximize revenue by maintaining high occupancy.
RealPage software provides daily recommendations to help homeowners and their employees price their existing apartments. Landlords are not required to comply with the recommendations, but critics argue that the software helps RealPage customers charge the highest possible rent because it has access to a wealth of confidential data.
The governors of California and New York signed laws last month to crack down on rent-setting software, and a growing number of cities, including Philadelphia and Seattle, have enacted ordinances against the practice.
States that are part of the agreement include California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon and Tennessee.
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