Utah is one of the 43 states around the country that has been impacted by what the U.S. Department of Justice considers an illegal plot to decrease competition among landlords and drive up costs for renters.
The DOJ has accused RealPage, a property management software company owned by Thoma Bravo, of illegal, anticompetitive practices that led to higher rent prices for millions of Americans. Portions of Salt Lake County are among the numerous markets listed in the DOJ complaint.
Earlier this month, the DOJ filed an amended complaint against RealPage and six large landlord companies — Greystar Real Estate Partners LLC; LivCor LLC; Camden Property Trust; Cushman & Wakefield Inc and Pinnacle Property Management Services LLC; Willow Bridge Property Company LLC and Cortland Management LLC.
Cities in Salt Lake County are among the numerous rental markets that the DOJ included in its amended complaint. While Greystar manages properties throughout Salt Lake City, there are two local submarkets specifically mentioned in the suit: southwestern Salt Lake City and Midvale/Sandy/Draper area.
Federal court filings don’t outline which companies are being accused of illegally raising prices in Utah, though a search of each company’s online portfolio gives some hints.
Of the six named in the DOJ lawsuit, Greystar has the largest footprint in Utah. Greystar, which operates over 1 million units around the globe, manages at least 74 apartment complexes in the Salt Lake metropolitan area, including at least five with addresses in Sandy and three more in Draper, according to Greystar’s website.
Large downtown developments like the Worthington and Astra Tower, the tallest building in Utah, are also managed by Greystar. It should be noted that downtown Salt Lake City is not one of the markets outlined in the DOJ’s complaint.
The other five companies listed in the DOJ lawsuit do not have Utah apartment buildings listed in their online portfolios. However, a report from the Washington Post estimated that around 22% of multifamily housing units in the Salt Lake City metropolitan area are managed by the companies named in the rent-setting lawsuits. Those lawsuits consist of not only the DOJ complaint, but other lawsuits filed by states around the country. The property management companies, as well as RealPage, have denied the allegations raised by the Justice Department.
RealPage told the Post that roughly 600 customers use its management software, which covers around 4.5 million rental units across the country. RealPage added that not all of its clients use its service at all of their properties.
Last August, the DOJ accused RealPage of using nonpublic, competitive apartment pricing data from property management companies to train its algorithm, which in turn would give recommended prices for rentals.
The lawsuit followed an investigation by the news outlet Propublica, which first spotlighted the rent-pricing algorithm RealPage used to help America’s biggest landlords set rent prices, in part by sharing data with each other. Class action lawsuits filed by renters soon followed.
Instead of landlords working independently to set competitive prices, the DOJ alleges RealPage allowed landlords to work together to keep rental prices higher to maximize profits. In addition to the RealPage lawsuit, the DOJ accuses the six property management companies of, “directly communicating with competitors’ senior managers about rents, occupancy, and other competitively sensitive topics.”
In the amended complaint, the DOJ lists out each submarket it believes was harmed by RealPage and the landlords’ alleged efforts to coordinate pricing and share data.
0 Comments