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.<\/p>\n
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 \u201cthat generates pricing recommendations using its rivals\u2019 competitively sensitive data or (one) that incorporates certain anticompetitive features\u201d to share sensitive information with competitors. Additionally, Greystar must accept a court-appointed monitor if they use any uncertified third party software.\u00a0<\/p>\n
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\u2019s Unfair Competition Law.\u00a0<\/p>\n
\u201cWe are pleased this matter is resolved and remain focused on serving our residents and clients,\u201d Greystar wrote in an email regarding the settlement.\u00a0<\/p>\n
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.\u00a0<\/p>\n
\u201cWhile I\u2019m happy that this settlement seems to be halting Greystar\u2019s use of price fixing software like RealPage, I\u2019m 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,\u201d said Avery Arbaugh, a member of the Berkeley Tenants Union.\u00a0<\/p>\n
The lawsuit further alleges that \u201cRealPage develops, markets, and sells this software to enable landlords to sidestep vigorous competition to win renters business.\u201d\u00a0<\/p>\n
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\u2019s housing market.\u00a0<\/p>\n
\u201cLandlords and property managers utilizing RealPage can form what is effectively a monopoly,\u201d Arbaugh said. \u201cAnti-competitive behavior such (as) AI-assisted collusion between landlords can prevent rents from going down.\u201d<\/p>\n
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 \u201cthe software has contributed to double-digit rent increase,\u201d which is reflected in a 19% rent increase in the East Bay.<\/p>\n