A $7 million settlement has been reached between South Carolina-based Greystar, the nation’s largest landlord, and nine states that sued the company for using rent-setting algorithms that officials say drive up housing costs.
The proposed settlement was filed Tuesday in a North Carolina federal court and is the latest to result from antitrust lawsuits targeting Richardson, Texas-based RealPage and similar software companies.
Prosecutors argue the products help rival property managers illegally align prices and push up rents. The deal still must be approved by a judge, the Associated Press reported.
“Whether it’s through smoke-filled backroom deals or through an algorithm on your computer screen, colluding to drive up prices is illegal,” Democratic California Attorney General Rob Bonta said in a news release. “Families across the country are staring down an affordability crisis. Companies 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.”
The states that are part of the settlement include California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon and Tennessee.
Greystar Previously Reached a Settlement with Department of Justice
As part of the settlement, Greystar said it no longer will use software that relies on other landlords’ confidential data to set rents. The company also agreed separately last month to pay $50 million to settle a class-action lawsuit over its use of RealPage.
In August, Greystar reached a separate nonmonetary deal with the Department of Justice to halt similar practices.
“We are pleased this matter is resolved and remain focused on serving our residents and clients,” Greystar said in a statement.
Greystar manages more than 946,000 units nationwide, according to the National Multifamily Housing Council. RealPage has said its software is used on fewer than 10% of rental units in the nation, and that its price recommendations are used less than half the time, the AP reported.
RealPage has not commented on the latest settlement. It has denied any wrongdoing and has argued that the plaintiffs misunderstand how their product works. RealPage said the real driver of high rents is a lack of housing supply, and said its pricing recommendations often encourage landlords to drop rents because they are incentivized to maximize revenue by maintaining high occupancy.
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