National Landlord Settles Rent Gouging Case in Los Angeles, California

Greystar, a major operator of apartment complexes in Southern California, has reached a settlement in a significant rent gouging case. The lawsuit, initiated by the U.S. Department of Justice in January, accused Greystar and other landlords of colluding to inflate rents through a pricing software developed by RealPage.

Details of the Settlement

Under the agreement, Greystar will cease using any software, including RealPage, that shares sensitive competitive information to align rental prices. California Attorney General Rob Bonta highlighted the necessity of fair competition to avoid artificially high rents.

Key Facts

• Greystar manages nearly 1 million apartments in the U.S.
• The company oversees about 333 rental properties in California using RealPage software.
• Greystar has agreed to pay $7 million in penalties across nine states.

Concerns Over Pricing Practices

The lawsuit argued that RealPage’s software enabled landlords to share proprietary data. This practice hindered competition among property owners, contributing to excessive rental prices. Bonta emphasized that collusion, whether through direct conversation or software, is unlawful.

Reactions and Implications

Greystar’s spokesperson expressed satisfaction with the resolution, underscoring their commitment to residents and clients. Meanwhile, K Agbebiyi from the Private Equity Stakeholder Project noted that the settlement poses uncertainty for RealPage’s future, given that such a significant landlord is now restricted from using their rental pricing tools.

Broader Impact on Rental Market

Authorities believe this settlement will foster competition among landlords. By eliminating the ability to share pricing information, it is anticipated that rents will decrease, providing relief for renters in a challenging housing landscape.

Other Defendants Involved

Additional apartment management companies implicated in the suit include:

• Camden
• Cushman & Wakefield/Pinnacle
• LivCor
• Willow Bridge

The states joining the lawsuit and settlement include North Carolina, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, Oregon, and Tennessee. This outcome marks a noteworthy chapter in the ongoing battle against rent gouging practices across the country.