Washington AG takes software company to court over rental price-fixing allegations

Yahoo

03-04-2025

A view of Seattle's Fremont neighborhood. (gregobagel/Getty Images)
Washington is suing a property management software company and a handful of landlords over allegations they colluded to inflate rents through a price-fixing scheme, Attorney General Nick Brown announced Thursday.
The state says RealPage has three products to help landlords calculate rental prices and manage occupancy. The company uses nonpublic information that landlords agree to share to create an algorithm that pushes them to raise rents, according to the lawsuit filed in King County Superior Court.
Instead of competing, the landlords all raise their prices together based on RealPage's recommendations, according to the complaint. So instead of the market helping determine rents, it's software.
RealPage also tells landlords to nix discounts they give to attract tenants, the lawsuit alleges. And it reportedly recommends keeping units vacant to keep rents up, instead of leasing them for a lower price.
In a press conference Thursday, Brown said property managers used the Texas-based RealPage software to price an estimated 800,000 leases in Washington between 2017 and 2024. About a third of Washington residents are renters, according to the lawsuit.
In 2023, more than half of Washington's renters paid more than 30% of their income toward rent, according to a state report released in December.
'Pricing is higher and occupancy is lower for properties managed by landlords using RealPage than for those that don't,' Brown said. 'Washington needs a competitive market to help with our critical shortage of affordable, multifamily housing. RealPage's unfair practices are drowning renters and pricing more and more families out of stable housing in Washington.'
The lawsuit alleges RealPage and nine landlords violated the state's Consumer Protection Act by stifling competition.
'It's price fixing, it's illegal and it hurts Washingtonians,' Brown said.
Chris Vialpando, a renter in Seattle's Lower Queen Anne neighborhood, said his landlord raised his rent over 50% in 2022 based on RealPage's algorithm. He said he is one of many 'falling victim to the collusion, thereby perpetuating this already complex, systemic housing crisis.'
'And I also understand that inflation and market adjustments are naturally part of the rental economy, but what I don't understand is how these predatory companies can continue to operate freely without continuous authoritative examination and scrutiny,' Vialpando said.
The company didn't immediately respond to a request for comment Thursday.
Gov. Bob Ferguson, when he was still attorney general, launched an investigation into the RealPage software in early 2023.
The investigation came on the heels of a ProPublica report on RealPage's algorithm that found just 10 property managers oversaw 70% of apartments in a Seattle neighborhood. All of them used RealPage's pricing software.
The state had previously been part of an ongoing federal lawsuit along with other states and the U.S. Department of Justice over antitrust concerns, but dropped out of that case in late February. The attorney general's office withdrew from that lawsuit because 'we saw a bigger problem,' Brown said.
'We saw a conspiracy, and we saw a greater path to help more renters,' he said. 'We filed this case in state court because we believe that state law protects a greater number of Washingtonians and tenants than the federal case.'
Tenants across the country have also brought a class-action lawsuit against RealPage and its property management clients that is ongoing in federal court in Tennessee.
Washington's lawsuit asks a judge to declare the conduct illegal, award restitution and hand down civil penalties.
The landlords named as defendants in the complaint are Greystar, Cushman & Wakefield, LivCor, UDR, Prime Administration, Quarterra Multifamily Communities, LaSalle Properties, MG Properties and Sares Regis Management Company.
Lawmakers in Olympia are also looking to ban algorithmic rental price-fixing this year. Senate Bill 5469 would prohibit the collection of data that feeds recommendations for rental rates and bar landlords from obtaining those recommendations. The attorney general would enforce violations of the proposed law.
The state Senate passed the measure on a party-line vote this month, and it is now moving through the House.
This week, RealPage sued the city of Berkeley, California, over a similar ordinance aimed at stopping landlords from using algorithms to set rents.
In an interview the day he took office in January, the new attorney general said one of his top priorities was tackling 'unjust, illegal, misleading business practices' in the housing sector.
'It's our job to be a watchdog, and make sure that housing is affordable and available for everyone,' Brown said at the time.