Greystar, a property management company with locations in Berkeley, reached a $7 million settlement as part of an ongoing antitrust lawsuit against RealPage last Tuesday. The payment will be divided amongst the plaintiffs, including the state of California. The defendants include Greystar, RealPage and other property management companies.
According to a press release by California Attorney General Rob Bonta, additional conditions of the settlement require Greystar to refrain from using any anti-competitive algorithmic software “that generates pricing recommendations using its rivals’ competitively sensitive data or (one) that incorporates certain anticompetitive features” to share sensitive information with competitors. Additionally, Greystar must accept a court-appointed monitor if they use any uncertified third party software.
In August 2024, Bonta, the U.S. Department of Justice and eight other attorneys general filed a lawsuit against RealPage. In January, they amended the complaint to include more property management companies.They alleged that the conduct of these companies, including RealPage and Greystar, violates federal antitrust laws and California’s Unfair Competition Law.
“We are pleased this matter is resolved and remain focused on serving our residents and clients,” Greystar wrote in an email regarding the settlement.
According to the lawsuit, Greystar allegedly used software created by RealPage, a company that uses a software program to make calculations of rent prices, and claims to generate suggested rent increases, according to the press release.
“While I’m happy that this settlement seems to be halting Greystar’s use of price fixing software like RealPage, I’m worried that (a) settlement of just $7 million for a landlord which rents upwards of 950,000 units across the country is not sufficient to disincentivize other landlords from forming effective cartels in the future,” said Avery Arbaugh, a member of the Berkeley Tenants Union.
The lawsuit further alleges that “RealPage develops, markets, and sells this software to enable landlords to sidestep vigorous competition to win renters business.”
Greystar manages more than 300 rental properties in Californiaand six apartment complexes in Berkeley. Arbaugh alleged that companies such as RealPage have a negative impact on the city’s housing market.
“Landlords and property managers utilizing RealPage can form what is effectively a monopoly,” Arbaugh said. “Anti-competitive behavior such (as) AI-assisted collusion between landlords can prevent rents from going down.”
In March, the city passed an ordinance banning the sale or use of RealPage and other pricing algorithms to manage properties in Berkeley.The ordinance cited an increase in rent prices as the basis of their ban, alleging that “the software has contributed to double-digit rent increase,” which is reflected in a 19% rent increase in the East Bay.
In April, RealPage sued the city of Berkeley over the ban. The lawsuit claimed that banning the company’s software was a violation of its First Amendment rights and asked the court to bar the ban’s enforcement.
The lawsuit alleged that RealPage has never contributed to price fixing of rental properties.
In June, the Berkeley City Council paused the implementation of the ordinance until March 1, 2026 due to litigation costs.
However, at the City Council’s Nov. 18 meeting, the council adopted the first reading of an amended ordinance prohibiting the sale or use of pricing algorithms. According to a City Council report, after engaging in discussions with RealPage, the city attorney proposed amendments that the attorney’s office believes will resolve the litigation if adopted.