Editor’s note: This story has been updated to clarify the nature of the search warrant.
Editor’s note: This story was updated on June 10, 2024 with a statement from RealPage.
(NewsNation) — The allegation: Big, corporate landlords teaming up to drive up rents for ordinary Americans.
Officials are investigating whether the situation was orchestrated by a company called RealPage, which now stands accused of a price-fixing scheme that is at least partly responsible for skyrocketing housing costs.
The FBI is now investigating and executed a search warrant at one of RealPage’s clients, Cortland Management, which manages rentals nationwide.
Here’s how the plot allegedly works.
According to lawsuits filed by officials in Arizona and the District of Columbia, RealPage collects rental data in a metro area and then tells the landlords what to charge.
The problem, as alleged in the lawsuits, is that landlords, who would normally compete in the rental marketplace, join together to share detailed, sensitive information with RealPage, then agree to charge what RealPage recommends.
D.C.’s attorney general calls it a “housing cartel.”
“Every consumer who’s paying more rent than a free competitive market would set as rent has been harmed,” D.C. Attorney General Brian Schwalb said. “And according to RealPage — RealPage, in its advertising and promotion, talks about artificially increasing the rents between 2% and 7%.”
Days after this story was originally published, RealPage Senior Vice President of Communications Jennifer Bowcock issued a statement to NewsNation denying that the organization had been raided.
“While we will not comment on the recent reporting with Cortland, I can say that RealPage continues to cooperate with all government authorities. We want everyone to know the facts and to clear up the untrue and misleading information being alleged and reported.”
“Our revenue management solutions use proven and accurate data to find fair pricing for both residents and property managers,” she added. “The actual overall acceptance rate across customers is also much lower than the 80-90% that is often inaccurately reported. Further, allegations regarding the number of rental units associated with properties that use RealPage’s revenue management software are false.”
Nationwide, rents have skyrocketed — up more than 26% compared to 2019 and almost 5.5% in the past year. Rent increases over the past several years are as follows, according to the Bureau of Labor Statistics.
- 2019: +26.6%
- 2020: +22.2%
- 2021: +20.2%
- 2022: +14.7%
- 2023: +5.4%
Cortland Management says it’s not the target of the investigation.
“We can confirm that the Federal Bureau of Investigation executed a limited search warrant at our Atlanta office as part of an ongoing investigation by the U.S. Department of Justice into potential antitrust violations in the multifamily housing industry,” the company said in a statement to NewsNation. “We are cooperating fully with that investigation, and we understand that neither Cortland nor any of our employees are ‘targets’ of that investigation.”
