WASHINGTON, D.C.: Attorney General Brian L. Schwalb said William C. Smith & Co., Inc. (W.C. Smith) has agreed to pay over $1 million and reform its business practices to resolve allegations that it conspired with other district landlords, using rent pricing software from RealPage, Inc., to inflate rents at more than 50,000 apartment units across the district, according to a release.
W.C. Smith owns more than 9,000 of these units. The settlement is the first to result from the Office of the Attorney General’s (OAG) lawsuit, filed in November 2023.
“Rents in D.C. are already sky-high, and amidst this housing affordability crisis, many of the District’s top landlords operated as a housing cartel—illegally colluding to push rents even higher,” Schwalb said in the release.
“I commend W.C. Smith for putting an end to its anticompetitive practices and cooperating with my office to reach this agreement. We will continue working to hold RealPage and the remaining landlords accountable. As the District’s independent attorney general, I will always fight for fair market conditions to protect District residents and ensure a level playing field for law-abiding businesses.”
Background on RealPage
RealPage offers a variety of technology-based services to real estate owners and property managers, including revenue management (RM) products that depend on non-public, competitively sensitive pricing data that RealPage receives from the owners and managers. RealPage uses this confidential data to estimate supply and demand for multifamily housing that is specific to particular geographic areas and unit types and then generates an artificially inflated rental price that maximizes the landlord’s revenue.
In the District, well over 30% of apartments in multifamily buildings (i.e., buildings with five or more units), and approximately 60% of units in large multifamily buildings (with 50+ units), are priced using RealPage’s software. In the Washington-Arlington-Alexandria Metropolitan Area, the overall market share is even higher: Close to 50% of units in multifamily buildings are priced using RealPage’s software.
This leaves many District residents with no choice but to pay RealPage’s inflated rents, according to the release
Schwalb Settlement with W.C. Smith
Schwalb’s office alleged that W.C. Smith used RealPage’s RM Software to set rents for its 9,000+ units in the District. As a part of RealPage’s price-fixing cartel, W.C. Smith and the other defendant landlords illegally coordinated to share sensitive, non-public company data, forgoing competition and delegating rent-setting authority to RealPage.
Under the terms of the settlement, W.C. Smith will:
- Pay $1,050,000 to the District in civil penalties, legal fees, and money to affected residents.
- Reform its rent-setting practices to prohibit the use of revenue-management software that relies on any non-public or confidential data from other companies.
- Refrain from encouraging others to use revenue-management software to accept recommended rent prices and from promoting the use of this type of software to other property owners.
A copy of the settlement is available here.
