Greystar, Landlords Settle for $141M Over RealPage Rent Algorithms
The real estate sector is witnessing a significant development as Greystar and 25 other property management firms settle for $141 million in a class action lawsuit. This lawsuit accused landlords of inflating housing costs through rent-setting algorithms provided by RealPage, a Texas-based software company. The agreement, filed in a Tennessee federal court, still awaits judicial approval.
Settlement Details
Greystar, the largest landlord in the United States, is set to contribute $50 million towards the settlement. Other notable payments include:
- BH Management: $15 million
- Simpson Property Group: $6.5 million
- Additional payments by other companies range from $550,000 to $6 million.
As part of the settlement, the involved companies have pledged to cease sharing nonpublic information with RealPage regarding rental algorithms. This stipulation addresses concerns that such information facilitated collusion to inflate rent prices.
Impact on the Housing Market
Attorneys representing the plaintiffs view this settlement as a pivotal change in the multifamily housing industry. They believe it could help curtail the alleged anticompetitive practices among landlords. While the companies involved in the agreement maintain their innocence, the settlement allows them to assist plaintiffs in ongoing litigation against RealPage and several other management firms.
RealPage is also contending with an antitrust lawsuit initiated last year by the U.S. Department of Justice alongside multiple state attorneys general. Greystar had previously reached a settlement related to that case in August.
Reactions from Involved Parties
Greystar expressed that these legal resolutions enable them to continue focusing on serving residents and clients. Meanwhile, RealPage maintains that its software is not to blame for rising rent prices. They emphasize that their product is utilized in less than 10% of U.S. rental units and is implemented less than half the time it’s suggested.
RealPage’s senior vice president for communications, Jennifer Bowcock, stated that the company believes the litigation lacks merit. The firm contends that the underlying issue of high rental prices stems from a shortage of housing supply rather than their pricing software.
Distribution of Settlement Funds
The total settlement sum is anticipated to benefit millions of tenants impacted by the alleged algorithmic rent inflation. As the judicial approval process unfolds, the focus remains on how these changes will influence the rental market in the future.
