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Renters filed a lawsuit this week alleging that an organization that makes price-setting software for flats and 9 of the nation’s greatest property managers fashioned a cartel to artificially inflate rents in violation of federal regulation.
The lawsuit was filed days after ProPublica revealed an investigation elevating issues that the software, offered by Texas-based RealPage, is probably pushing lease costs above aggressive ranges, facilitating price-fixing, or each.
The proposed class-action lawsuit was filed in US District Court in San Diego.
In an electronic mail, a RealPage consultant mentioned that the corporate “strongly denies the allegations and will vigorously defend against the lawsuit.” She declined to remark additional, saying the corporate doesn’t touch upon pending litigation.
The 9 property managers named within the lawsuit didn’t reply instantly to a request for remark.
They included a few of the nation’s largest landlords, resembling Greystar, Lincoln Property Company, Equity Residential, Mid-America Apartment Communities, and FPI Management—which collectively handle lots of of hundreds of flats.
Four of the 5 renters named within the go well with had been Greystar tenants. A fifth rented from Security Properties. Their flats had been positioned in San Diego, San Francisco, and two Washington state cities, Redmond and Everett.
The lawsuit accused the property managers and RealPage of forming “a cartel to artificially inflate the price of and artificially decrease the supply and output of multifamily residential real estate leases from competitive levels.”
RealPage’s software makes use of an algorithm to churn by a trove of information every evening to counsel every day costs for out there rental items. The software makes use of not solely details about the condominium being priced and the property the place it’s positioned, but additionally personal knowledge on what close by opponents are charging in rents. The software considers precise rents paid to these rivals—not simply what they’re promoting, the corporate instructed ProPublica.