Federal lawyers did not estimate the impact on renters, but said one apartment boasts of raising rents by 25% in a year.
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Apartment residents may receive rental relief after federal officials reach a price-fixed settlement with Greyster, the country’s largest private property.
The agreement between the government and South Carolina-based Greyster manages around 950,000 units nationwide, blocking the use of computer software that has been denounced for rent ratchets. Greyster on August 8 said similar settlements were reached in a class action lawsuit brought by the tenant.
Federal lawyers have accused Greystar of using computer algorithms to raise rent by illegally conspiring with other landowners via software known as “Realpage.” The software system allowed landlords to personally share their own pricing data with each other and raise prices in bulk.
Federal lawyers said the conspiracy maximized the landlord’s interests while restraining competition. The lawsuit stated that real page users were never encouraged to lower rents, even if the market softens.
“American greatness always depends on free market competition, and competition is less important than making housing affordable again,” Attorney General Pam Bondy said in a statement.
In a settlement with Greyster, which requires approval from a federal judge, Justice Department lawyers said Greyster’s use of real pages is a modern price adjustment. They did not estimate the impact on renters, but in one legal application the apartment complex boasted of using the Realpage system to raise rents of 25% in a year, raising their competitors to their competitors.
“By using algorithms, whether it’s a smokey room, competitors cannot share competitive, sensitive information or adjust prices to the disadvantage of American consumers,” Aide Abigail Slater said in a statement.
Greyster did not admit any fraud in solving the case, but agreed to support federal prosecutors with separate, continuing investigations on Realpage. Greyster also agreed to external surveillance.
“We took part in these settlements to clarify the interpretation of government law and ensure that things continue in the right way,” a Greyster official said in a statement.
In another pending lawsuit, the FTC and Colorado accused Greyster of cheating on customers, signed misleading leases with higher rents than advertised, stacking private fees or charging non-refundable application fees before recovering the true monthly rental price.
Federal officials have suggested that they may soon resolve the case, and Greyster has already deployed a new website and rent calculator for future tenants.
