Latest news with #rentinflation
Yahoo
3 days ago
- Business
- Yahoo
W.C. Smith to pay $1M in DC apartment pricing suit
This story was originally published on Multifamily Dive. To receive daily news and insights, subscribe to our free daily Multifamily Dive newsletter. Washington, D.C., Attorney General Brian L. Schwalb announced Monday that William C. Smith & Co. will pay over $1 million and reform its business practices to resolve charges that it conspired with other District landlords while using pricing software from RealPage to allegedly inflate rents. In November 2023, Schwalb's office filed suit against RealPage and 14 landlords, including W.C. Smith, accusing them of 'unlawfully colluding' by collectively adopting the rents set by the Richardson, Texas-based revenue management software company's technology and 'unlawfully agreeing to exchange competitively sensitive data in violation of the District of Columbia Antitrust Act.' W.C. Smith, which owns 9,000 units and is the first company to settle in the Washington, D.C., case, denied the allegations in the complaint and denied that it violated any law or engaged in any anticompetitive conduct, according to the consent order filed in the Superior Court of the District of Columbia. 'We have consistently asserted that we did not participate in any of the activities alleged by the Office of Attorney General in the RealPage litigation,' John Ritz, president of W.C. Smith, said in a statement provided to Multifamily Dive. 'We now have been dismissed from this case without admission of the allegations or acceptance of liability. By settling this matter, we avoid considerable and unnecessary legal expenses and can return our focus to creating thriving communities for the residents of Washington, D.C. — which has been our mission for more than 50 years.' As part of the consent agreement, W.C. Smith, which ceased using RealPage's Lease Rent Options software in December 2023, agreed to a number of conditions for 10 years, including: The company will not use or license software that uses nonpublic information related to buildings that it doesn't manage or that discloses recommended prices for leases concerning buildings not managed or owned by the firm. W.C. Smith will not encourage or require anyone else using revenue management software to accept recommended prices, provide justification when rejecting any recommended price, or encourage or require any person to choose a certain override amount or option. The firm will not promote the use of revenue management software to other owners and operators of apartments in the District of Columbia. The company will not communicate any information about any multifamily properties other than public information with another apartment manager. In Washington, more than 30% of apartments in multifamily buildings with five or more units and approximately 60% of units in large multifamily buildings with 50 or more units are priced using RealPage's software, according to Schwalb. Another landlord named in the original suit, Arlington, Virginia-based REIT AvalonBay Communities, had its motion to dismiss granted in May 2024 because its contract precludes sharing its pricing and supply data. The 12 other firms named in the suit include: Avenue5 Residential. Bell Partners Inc. Bozzuto Management Co. Camden Summit Partnership. Equity Residential. Gables Residential Services. GREP Atlantic. Highmark Residential. JBG Smith Properties. Mid-America Apartments. Paradigm Management II. UDR. In the original filing, Schwalb claimed that RealPage policed contracts with these operators, and landlords abided by its suggested rents more than 90% of the time. If the market were truly competitive, he said the defendants would 'keep their pricing strategies confidential.' 'RealPage and the defendant landlords illegally colluded to artificially raise rents by participating in a centralized, anticompetitive scheme, causing District residents to pay millions of dollars above fair market prices,' Schwalb said in a news release announcing the suit. 'Defendants' coordinated and anticompetitive conduct amounts to a District-wide housing cartel.' Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday. Recommended Reading DOJ: RealPage suit should move forward Sign in to access your portfolio
Washington Post
02-06-2025
- Business
- Washington Post
Lawsuit alleging rent inflation in D.C. leads to $1 million settlement
D.C. Attorney General Brian Schwalb (D) announced a $1 million settlement in a lawsuit alleging that multiple property management companies conspired to inflate rents in 50,000 apartments in the city through the RealPage company's pricing software. Several lawsuits have been filed around the country in the past two years against RealPage, the maker of widely used property management software, alleging that the company collects landlords' private data to undermine competition and set higher rents. Schwalb's office, which sued RealPage and 14 of the city's 'largest landlords' in 2023, said that the William C. Smith and Co. property management firm is the first defendant in the lawsuit to reach a settlement with the city. WC Smith, which owns more than 9,000 of the affected units, according to Schwalb's office, has denied that it 'violated any law or engaged in any anticompetitive conduct,' according to the settlement. 'We have consistently asserted that we did not participate in any of the activities alleged by the Office of Attorney General in the RealPage litigation. We now have been dismissed from this case without admission of the allegations or acceptance of liability,' John Ritz, president of WC Smith, said in a statement. 'By settling this matter, we avoid considerable and unnecessary legal expenses and can return our focus to creating thriving communities for the residents of Washington, D.C. — which has been our mission for more than 50 years.' A spokesperson for RealPage did not immediately respond to a request for comment. The alleged actions by the Texas-based company and the property management companies that use its software have garnered increased attention in multiple states after numerous complaints from tenants about their escalating rents. In Maryland, Attorney General Anthony G. Brown (D) sued RealPage and six major landlords in the state earlier this year, alleging that RealPage products 'use non-public, competitively sensitive data — for example, the number of potential tenant visits to a property — to estimate supply and demand, and then generate a 'price' to charge that maximizes the landlord's revenue.' A bill that would have barred landlords from using RealPage software failed to advance to a vote. In its lawsuit, Schwalb's office alleged that RealPage offers 'revenue management' software to real estate owners and property managers that relies on competitive, nonpublic pricing data to estimate supply and demand for rental units. RealPage uses that data to generate 'an artificially inflated rental price that maximizes the landlord's revenue,' according to his office. More than 30 percent of D.C.'s apartments in buildings with five or more units, and about 6o percent of apartments in buildings with 50 units or more, are priced using RealPage's software, Schwalb's office said, leaving many residents 'with no choice but to pay RealPage's inflated rents.' Monday's settlement requires WC Smith to pay just over than $1 million to the District in civil penalties, money for affected residents and legal fees. Under the settlement's terms, WC Smith is prohibited from using revenue management software that relies on nonpublic data to set rent prices. The company must also refrain from promoting this software to other firms. 'Rents in DC are already sky-high, and amidst this housing affordability crisis, many of the District's top landlords operated as a housing cartel — illegally colluding to push rents even higher,' Schwalb said in a statement. 'I commend W.C. Smith for putting an end to its anticompetitive practices and cooperating with my office to reach this agreement.' 'We will continue working to hold RealPage and the remaining landlords accountable,' he added. RealPage has been the subject of lawsuits in several jurisdictions after a ProPublica investigation found that the company's software may have led to illegal rent increases. In an amended antitrust lawsuit filed in January, Illinois and Massachusetts joined eight other states and the Justice Department in alleging that RealPage coordinated with six property management firms to raise rents.
