A lawsuit filed by D.C. Attorney General Brian Schwalb over alleged artificial rent inflation will hit some of the region’s biggest landlords, including companies with properties in Alexandria, DCist first reported.
Schwalb’s lawsuit alleges the landlords of acting as a rent-setting cartel that use Texas-based property management software company RealPage to artificially drive up rent prices around the region.
According to the lawsuit:
In practice, RealPage has focused on recruiting into the cartel the buildings with the largest number of units (i.e., buildings with fifty or more units). In the District, a sizable
majority of units in large multifamily buildings — approximately 60% — set their prices using RealPage’s RM software.In the Washington-Arlington-Alexandria Metropolitan Statistical Area, that number is even higher: over 90% of units in large buildings are priced using RealPage’s RM software.
As a practical matter, this leaves many District residents with no choice but to pay RealPage’s inflated rents.
The largest defendant in the lawsuit is Greystar, which manages six communities across Alexandria and uses RealPage RM Software for pricing:
- Bailey’s Crossings Apartments
- Del Ray Tower at Fuse
- Notch8
- Platform
- Station 650 Apartments
- The Blake
Other defendants in the lawsuit include Avenue5 Residential, which owns e-lofts in the West End, and Avalon Communities, which owns Avalon Potomac Yard. Another developer in the lawsuit, JBG Smith, has been part of plans to redevelop Potomac Yard.
“RealPage, the Defendant Landlords, and other Participating Landlords have unlawfully agreed to forgo competition in favor of using a central entity — the RealPage RM Software — to set apartment rents,” the lawsuit said “Their agreement is reflected in existing documents, has been
publicly acknowledged by cartel members, and is closely policed to ensure compliance.”
The lawsuit said RealPage suppresses landlords’ independent price decision-making and requires the landlords to impose rents generated by the company’s software. Landlords using the software have touted their ability to raise rents by 20% or more, the lawsuit said.
The lawsuit comes on the heels of years of rent increases, with many of the defendants in the lawsuit owning the Class A apartments in Alexandria that have seen an average 4.7% rent increase over the last year.
Image via The Blake/Facebook