The Justice Department, in a move reflecting increased scrutiny on the housing market, has filed an amended complaint against a group of the country’s major landlords for their part in an alleged anticompetitive scheme. Announced yesterday, this action targets six large property management firms, accusing them of using algorithmic pricing to manipulate the rental market to their advantage. According to the Justice Department's statement, this practice has hurt millions of renters by artificially inflating costs across the nation.
At the heart of the lawsuit are allegations that Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc, Willow Bridge Property Company LLC, and Cortland Management LLC conspired to decrease competition and keep rental prices high. Individually, these companies collectively manage over 1.3 million units across 43 states and the District of Columbia. The State Attorneys General of Illinois and Massachusetts have joined the legal action, bringing the total number of co-plaintiffs to ten. Part of the charges includes accusations that some landlords were directly communicating with competitors’ senior managers about sensitive pricing information and strategies, in a clear attempt to collaboratively influence the market.
In a clear-cut statement from Acting Assistant Attorney General Doha Mekki of the Justice Department's Antitrust Division, the issue was framed not only as a legal concern but also a social one, saying, "While Americans across the country struggled to afford housing, the landlords named in today's lawsuit shared sensitive information about rental prices and used algorithms to coordinate to keep the price of rent high," as reported on the Justice Department website. This assertion addresses the broader consequence of such alleged collusion: the exacerbation of an already difficult housing affordability crisis.
As part of the amended filing, a proposed consent decree with Cortland Management LLC is slated to potentially resolve claims against the company. Cortland, which oversees over 80,000 rental units in 13 states, would be required under the decree to fully cooperate with the ongoing investigation. The decree stipulates that Cortland is also to cease using competitors' pricing data and to operate under the watch of a court-appointed monitor, among other constraints aimed at reining in any alleged anticompetitive practices.
The public’s ability to weigh in on this proposal is ensured by the Tunney Act. A competitive impact statement, alongside the proposed consent decree, will be accessible for comment for a 60-day period in the Federal Register. Post the comment phase, the U.S. District Court for the Middle District of North Carolina may enter a final judgment if it deems the agreement serves the public interest. The origins of these companies span several major cities in the United States, with headquarters in locales from Charleston to Chicago to Houston, showing that the alleged collusion has a broad and expansive reach.
