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Justice Department Targets Landlords in Landmark Lawsuit Over Algorithmic Rent-Fixing

Justice Department Targets Landlords in Landmark Lawsuit Over Algorithmic Rent-Fixing

U.S. Justice Department Sues Major Landlords Over Alleged Rent-Fixing Scheme

The U.S. Justice Department has filed a lawsuit against several large landlords, accusing them of coordinating efforts to keep rents artificially high. The legal action comes amid a challenging housing market for American renters, with many struggling to afford rising costs.

The lawsuit alleges that six landlords, collectively managing over 1.3 million rental units, engaged in anti-competitive practices by sharing sensitive information and using algorithms to boost profits. This coordination, prosecutors claim, has contributed to the ongoing housing affordability crisis.

Renters across the nation have been grappling with increasing rent burdens, with many spending over 30% of their income on rent and utilities. This financial strain has led to difficult decisions for families, increased evictions, and a surge in court cases. Children, in particular, have been disproportionately affected by high eviction rates.

While multiple factors contribute to the housing crisis, the Justice Department’s lawsuit focuses on the role of landlords in exacerbating the issue. The defendants are accused of sharing data on renewal rates, algorithm usage, concessions, and pricing strategies to avoid lowering rents.

One of the accused, Greystar Real Estate Partners LLC, has denied any anti-competitive practices and stated its intent to defend against the lawsuit. Meanwhile, another unnamed landlord has agreed to cooperate with prosecutors and proposed a settlement to limit data and algorithm usage.

The lawsuit extends beyond these landlords, incorporating them into an existing case against RealPage, a software company. RealPage is alleged to have facilitated price alignment through its algorithm. The company defends its software, arguing that its use is limited and that housing affordability issues stem primarily from under-supply.

This legal action highlights the complex interplay of factors contributing to the U.S. housing crisis and underscores the government’s efforts to address alleged market manipulation in the rental sector. As the case unfolds, it may have significant implications for the future of rental pricing practices and housing affordability in America.