On the heels of a class-action swimsuit in opposition to RealPage and 7 condominium operators in October, a College of Washington pupil filed a brand new lawsuit alleging collusion within the pupil housing market amongst a few of multifamily’s largest gamers.
The plaintiff, Gabriel Navarro, who filed the swimsuit within the U.S. District Courtroom for the Western District of Washington in Seattle, claims there was an illegal settlement amongst pupil housing managers to “artificially inflate the costs of pupil housing throughout america,” together with in Seattle; Ann Arbor, Michigan; and Gainesville, Florida.
The scholar property managers named within the swimsuit, filed Oct. 18, learn like a who’s who of multifamily and embrace among the largest operators within the rental housing trade. They’re:
- Charleston, South Carolina-based Greystar Actual Property Companions
- New York Metropolis-based Cushman & Wakefield
- Des Moines, Iowa-based BH Administration Companies
- Camden, New Jersey-based The Michaels Group
- Austin, Texas-based Campus Benefit
- Denver-based Cardinal Group Holdings
- Chicago-based CA Ventures World Companies
- Raleigh, North Carolina-based D.P. Preiss Co.
- Charleston, South Carolina-based GEDR LakeView — an organization affiliated with Greystar that manages Navarro’s condominium advanced
Every of the businesses named within the swimsuit used RealPage’s YieldStar income administration platform, which employs an algorithm to counsel asking rents for vacant models. Just like the pricing packages airways and inns have used for many years, income administration has solely been extensively adopted within the multifamily trade extra lately. Builders of the software program have mentioned they had been acutely aware of collusion considerations even when the expertise was in its infancy.
The lawsuit argues that “RealPage supplied the platform and the algorithm for collusion.” In doing so, it gave pupil housing operators the flexibility to collaborate and monitor rivals’ rents, in line with courtroom paperwork.
The swimsuit factors out that pupil housing operators have separate challenges in comparison with typical condominium managers. Earlier than RealPage, it argued that these corporations set costs independently with an emphasis on having “heads in beds” when the college 12 months began. However the introduction of this expertise modified that use-it-or-lose it strategy by giving operators a peek behind their rivals’ pricing curtains, the swimsuit alleged.
“RealPage supplied pricing info for pupil housing suppliers that allowed them to intently analyze their pricing compared to their rivals at a bedroom-by-bedroom stage,” the swimsuit mentioned.
RealPage mentioned it “strongly denies” the allegations and can vigorously defend in opposition to the lawsuit. “Past that, we don’t touch upon pending litigation,” a spokesperson instructed Multifamily Dive.
Multifamily Dive reached out for remark to every of the housing suppliers named and obtained a response from Campus Benefit.
“Campus Benefit strongly disagrees with the unsubstantiated allegations within the lawsuit and intends to vigorously defend in opposition to the claims,” in line with the corporate. “Campus Benefit is pleased with its monitor report creating profitable communities.”
Residence mangers lawsuit
Two weeks in the past, RealPage and 9 typical condominium operators, together with seven within the NMHC Prime 50, had been sued in comparable class-action litigation within the U.S. District Courtroom for the Southern District of California from 5 renters alleging antitrust violations underneath the Sherman Act.
Within the earlier swimsuit, the plaintiffs alleged that the condominium managers used “unit-specific pricing and provide suggestions” from RealPage. Within the course of, they coordinated “each pricing and provide,” in line with the swimsuit.
The sooner swimsuit additionally claims that RealPage requested for “self-discipline” amongst condominium managers, known as lessors, basically offering them with marching orders for collude successfully.
“To encourage adherence to its frequent scheme, RealPage explains that for its providers to be simplest in rising rents, lessors should settle for the pricing not less than 80% of the time,” in line with the swimsuit.
RealPage mentioned that many housing suppliers want bottom-line pricing and income administration software program as a result of they hold them in compliance with honest housing rules.
“Negotiating lease opens up the opportunity of offering completely different renters with completely different pricing for a similar housing unit, which might put housing suppliers squarely in violation of federal Honest Housing legal guidelines,” RealPage mentioned in an announcement emailed to Multifamily Dive.
Because the pandemic, lease has dramatically elevated across the nation earlier than slowing within the final couple of months. In Might, Realtor.com reported that rents jumped 26.6% since 2019.
On condition that development, there might be extra authorized motion in opposition to condominium homeowners and managers sooner or later, in line with New York Metropolis-based lawyer Carol Sigmond, a associate within the development and litigation follow teams at Greenspoon Marder LLC.
“I believe there may be going to be quite a lot of these instances as a result of I believe rents have gone up dramatically, exceeding the inflation cycle,” she mentioned.
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