Greystar has agreed to pay $7 million to settle lawsuits brought by several states, including Oregon, over the use of algorithmic rent-setting software, according to reports.
Oregon Attorney General Dan Rayfield and a bipartisan coalition of nine states filed a proposed $7 million settlement to resolve claims against Greystar Management Services LLC, as part of the coalition’s ongoing enforcement efforts targeting price fixing involving housing rental prices across the country.
“When the largest landlord in America uses an algorithm to price-fix the rent, the result is simple: people pay more,” Rayfield said in a statement. “It squeezes working families when the cost of housing is already at an all-time high. This settlement holds the largest U.S. landlord accountable. It’s a win for Oregonians, our pocketbooks and the rule of law.”
This summer Greystar reached a non-monetary settlement with the U.S. Department of Justice to end its participation in algorithmic rent-pricing schemes, according to a release.
Greystar, often called the nation’s largest landlord, settled with Oregon and other states that sued the property management company for using rent-setting algorithms that officials have blamed for driving up housing costs.
The proposed settlement, filed in a North Carolina federal court, is the latest to result from antitrust lawsuits targeting RealPage and similar software companies. Prosecutors argue the products help rival property managers illegally align prices and push up rents. A judge must still approve the deal.
In addition to the monetary payment to the states, the agreement, if approved by the court, would require Greystar to:
- Refrain from using any anticompetitive algorithm that generates pricing recommendations using competitors’ sensitive data or that incorporates certain anticompetitive features.
- Refrain from sharing competitively sensitive information with competitors.
- Accept a court-appointed monitor if it uses a third-party pricing algorithm that is not certified under the consent decree.
- Refrain from attending or participating in RealPage-hosted meetings of competing landlords.
- Cooperate with the coalition’s claims against RealPage.
As part of the settlement, Greystar will no longer use software that relies on other landlords’ confidential data to set rents. Greystar also agreed separately last month to pay $50 million to settle a class-action lawsuit over its use of RealPage.
“We are pleased this matter is resolved and remain focused on serving our residents and clients,” Greystar said in a statement Wednesday.
The states that are part of the settlement include California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon and Tennessee.
The lawsuit involved apartment owners use of RealPage’s rent-setting software.
One legal complaint from the state of California claimed the landlords knew that their nonpublic data would be used to recommend prices, not just for their own units, but also for competitors that use the programs.
In October, Greystar and 25 other property management companies agreed to pay $141 million to settle a class-action lawsuit involving rent-setting algorithmic software coordination and other anticompetitive practices in rental markets across the country.
The complaint said RealPage knew what competing landlords were charging and could increase profits for landlords by using that information to recommend landlords set or raise their prices uniformly, eliminating competition as a result and leaving renters no choice but to pay artificially high prices.
RealPage has denied any wrongdoing and argues that the plaintiffs misunderstand how their product works. RealPage, which is based in Texas, has said its software is used on fewer than 10% of rental units in the United States, and that its price recommendations are used less than half the time.
“While the proposed settlements … do not include RealPage, we are encouraged to see this matter move toward closure,” said Jennifer Bowcock, RealPage’s senior vice president for communications, in a statement. “RealPage continues to believe that this litigation is without merit and that our revenue-management products, and our customers’ use of them, have always been legal.”
