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CT joins multi-state lawsuit against corporate landlords accused in algorithmic rent pricing scheme

FILE: Rally in Bridgeport on April 15, 2024 in support of tenants undergoing evictions from an out of state landlord that newly acquired their property.
Tyler Russell
/
Connecticut Public
FILE: Rally in Bridgeport on April 15, 2024 in support of tenants undergoing evictions from an out of state landlord that newly acquired their property.

Connecticut joined forces with the Department of Justice and nine other states expanding a civil antitrust lawsuit over an algorithmic rent pricing scheme.

The initial lawsuit was filed in August , against property management software company RealPage. However, the suit was recently expanded to include the nation’s six largest corporate landlords, who are accused of partaking in the pricing scheme by using the RealPage algorithm.

Landlords are using an algorithm and artificial intelligence to decrease competition among them by manipulating rent prices and sharing renter information with each other, Connecticut Attorney General William Tong said.

“It enables landlords to take advantage of renters by colluding with each other, by using this technology, by sharing non-public information in real time, so that everybody can see how high prices should and can be, and to set those prices at those high rates,” Tong said.

Connecticut joined the lawsuit to hold landlords accountable, Tong said.

“For people to get screwed by big companies using their monopoly power to collude with each other is wrong and people are getting squeezed every single day by these costs,” Tong said. “My job is to push back on that squeeze and give them some room to breathe.”

Sen. Richard Blumenthal previously called out the predatory landlord behavior, proposing legislation to fix a loophole permitting price-gouging.

RealPage increases rents for client landlords between 5% and 12%, according to Blumenthal.

At least one local landlord, Greystar, with properties in New Haven, Newington and Storrs, is known to use the price fixing software.

Connecticut is joined by North Carolina, California, Colorado, Minnesota, Oregon, Tennessee and Washington in the lawsuit against Greystar Real Estate Partners; Blackstone’s LivCor; Camden Property Trust; Cushman & Wakefield Inc and Pinnacle Property Management Services and Willow Bridge Property Company.

Cortland Management, another corporate landlord named in the suit, reached a settlement with the Department of Justice. The settlement would limit the company’s use of third-party software to price apartments and use of any sensitive, competitive data.

Greystar, Pinnacle and Willow Bridge operate in Connecticut.

Holding the landlords accountable will benefit renters, Tong said.

“It'll mean lower rent and more competition by landlords for renters,” Tong said. “At this moment, rent is so expensive and inventory for renters is so low. That's why they're building so many apartment buildings, right? We know that housing is a real issue, here in Connecticut and housing stock is very, very limited.”

Abigail is Connecticut Public's housing reporter, covering statewide housing developments and issues, with an emphasis on Fairfield County communities. She received her master's from Columbia University in 2020 and graduated from the University of Connecticut in 2019. Abigail previously covered statewide transportation and the city of Norwalk for Hearst Connecticut Media. She loves all things Disney and cats.

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