Major landlord reaches $7M settlement with California, other states in alleged rent price scheme<\/p>\n
Greystar, which manages hundreds of properties in California, has agreed to pay $7 million to settle a lawsuit alleging the company and other landlords used a price scheme to raise rents artificially high.<\/p>\n
Greystar, which manages hundreds of properties in California, has agreed to pay $7 million to settle a lawsuit alleging the company and other landlords used a price scheme to raise rents artificially high.<\/p>\n
In January, Greystar was named as a defendant in an antitrust lawsuit<\/a> filed by California Attorney General Rob Bonta, the U.S. Department of Justice and several other states against software company RealPage, which officials say uses algorithmic models to recommend price increases to subscribers.<\/p>\n Bonta alleges Greystar used RealPage\u2019s system to coordinate rental prices with other landlords by illegally sharing and gathering confidential information. According to his office<\/a>, RealPage\u2019s \u201cprice alignment scheme\u201d affected rentals across the country, especially in multifamily buildings in Southern California, including in Los Angeles, Orange County and San Bernardino.<\/p>\n “Whether it’s through smoke-filled backroom deals or through an algorithm on your computer screen, colluding to drive up prices is illegal,\u201d Bonta said in a statement. \u201cCompanies that intentionally fuel this unaffordability by raising prices to line their own pockets can be sure I will use the full force of my office to hold them accountable.\u201d<\/p>\n Details on the settlement<\/p>\n Greystar is the largest landlord in the U.S., according to the Department of Justice, managing nearly 950,000 rental units across the country. In California, the company manages about 333 multifamily rental properties that use RealPage\u2019s pricing software, according to Bonta\u2019s office.<\/p>\n Bonta announced<\/a> last week that as part of the settlement, Greystar has agreed to stop using software that uses competitively sensitive information to set rent prices, including from RealPage.<\/p>\n The company also has agreed to cooperate in the federal prosecution of RealPage and the other landlords named as defendants, such as Camden and Willow Bridge.<\/p>\n Greystar said in a statement to LAist that it\u2019s \u201cpleased this matter is resolved\u201d and the company \u201cremain[s] focused on serving our residents and clients.\u201d<\/p>\n Settlement with RealPage<\/p>\n The U.S. Justice Department\u2019s Antitrust Division filed a proposed settlement<\/a> with RealPage on Monday to resolve its claims against the company.<\/p>\n If the settlement is approved by the court, RealPage would be required to stop using competitors\u2019 private, sensitive information to set rental prices and remove or redesign features in its software that limited price drops or aligned prices between competitors, according to the Justice Department<\/a>.<\/p>\n RealPage also would be required to cooperate in the lawsuit against property management companies that have used its software and agree to a court-appointed monitor to make sure it complies with the proposed settlement.<\/p>\n