Attorney General Anthony G. Brown announced a lawsuit against RealPage, Inc. (RealPage) and eight of the largest residential landlords in Maryland for colluding to illegally raise rents for hundreds of thousands of Maryland residents.
The lawsuit, filed in the Circuit Court for Prince George’s County, alleges that the defendant landlords allowed RealPage to set rent prices. RealPage used a centralized pricing algorithm to inflate prices, costing renters millions of dollars.
The lawsuit is one of several lodged by government agencies—including the United States Department of Justice— against RealPage and its landlord users. “RealPage and the named landlords worked together to raise the cost of their apartments, making it hard for Maryland renters to put a roof over their heads,” said Attorney General Brown. “Our Office is committed to holding landlords accountable so Marylanders can afford their rent.”
RealPage offers a variety of technology-based services to real estate owners and property managers, including “Revenue Management” products that use non-public, competitively sensitive data—for example, the number of potential tenant visits to a property—to estimate supply and demand, and then generate a “price” to charge that maximizes the landlord’s revenue. RealPage then tracks and enforces each landlord’s compliance with the software’s “prices.”
The defendant landlords are some of the largest providers of multifamily housing in Maryland, and the Office of the Attorney General’s (OAG) investigation revealed that RealPage’s Revenue Management technology was used to set rents for more than 100,000 apartments across Maryland.
This leaves many Maryland residents with no choice but to pay RealPage’s inflated rents, worsening the state’s ongoing affordable housing crisis.
The six landlords named in the lawsuit are:
- Morgan Properties Management Company, LLC
- Bozzuto Management Company
- Greystar Management Services, LLC
- AvalonBay Communities, Inc.
- UDR, Inc.
- Highmark Residential, LLC
Specifically, Maryland’s lawsuit alleges that RealPage and the defendant landlords worked together to use RealPage’s Revenue Management technology to drive rents above competitive rates. RealPage contracts with property managers and owners to provide “soup to nuts” rental software and services. The company’s unparalleled access to proprietary data and its significant market share have positioned it as the “Big Tech” company of rental housing and secured it a dominant position in the market.
Attorney General Brown also alleges that the defendant landlords illegally collaborated, shared sensitive company data, and gave rent-setting authority to RealPage in order to raise rents. RealPage policed and enforced adherence to the “prices” generated by its software and participating landlords recruited additional landlords into the scheme, providing written and oral testimonials touting the benefits of using RealPage’s technology to inflate rent prices and increase revenues. Through this illegal conduct, RealPage and the defendant landlords turned a competitive marketplace into one in which landlords collaborate for their collective benefit at the expense of Maryland renters.
Finally, our office alleges that the defendants’ illegal agreement to share information and collectively set rents led to artificially inflated rental prices and caused Maryland tenants to pay millions of dollars above market rates. RealPage widely touts the impact of its products, publicly advertising revenue increases of 2-7%. Where RealPage’s presence in a market increases, price effects tend to extend beyond units managed by users of the price-setting software, potentially impacting all market participants, illustrating the widespread effects of RealPage’s algorithmic pricing.
With this lawsuit, Attorney General Brown seeks to:
- Stop RealPage and the defendant landlords from engaging in anticompetitive behaviors that inflate rent prices for Maryland tenants;
- Appoint a corporate monitor to ensure that RealPage and the defendant landlords do not engage in further anticompetitive misconduct;
- Secure monetary refunds for the State of Maryland and for Maryland residents whose rents were unlawfully raised.
