The U.S. Justice Department has reached a proposed settlement with one of the nation’s largest landlords to stop using anti-competitive tenant practices; that’s the same goal as a recent housing bill that was vetoed by Gov. Ned Lamont but which is now being re-negotiated.
The DOJ announced on Aug. 8 that it had filed a proposed settlement to resolve its claims against Greystar Management Services of Charleston, South Carolina as part of its ongoing enforcement against algorithmic coordination and other anticompetitive practices in rental markets across the country.
The Justice Department said Greystar — the largest landlord in the United States which manages almost 950,000 rental units across the country — and five co-defendants shared competitively sensitive data to generate pricing recommendations using algorithms by RealPage, a property management software company. These algorithms also included anticompetitive rules that aligned competitors’ pricing.
In addition, the Justice Department said Greystar and other landlords discussed competitively sensitive topics — including pricing strategies, rents, and selected parameters for RealPage’s software — directly with each other.
Greystar Management operates upscale rental apartments in four Connecticut communities: Darien, Middletown, Newington and Stamford; they charge $2180 to $6237 a month rent plus extra fees for parking, trash removal, and utilities, and a $75 monthly ‘community amenity fee.’
Landlord price-fixing using algorithmic software has long been a concern in Connecticut.
In January, Connecticut Attorney General William Tong joined nine other states in suing America’s six largest landlords over their use of algorithmic pricing software to set rental rates. And this past session, both the Housing and Judiciary committees introduced legislation to crack down on the use of rental algorithms.
A version of those two committee bills made it into House Bill 5002, an omnibus housing bill from the state legislature’s Democratic majority. Section 18 of that bill would have made it a violation of Connecticut’s Antitrust Act for anyone to use a ‘revenue management device’ (i.e. algorithmic software) to set rental rates or occupancy levels for residential dwelling units. It would subject violators to investigation and enforcement provisions and allow the attorney general to investigate and bring action against violators on behalf of the state and its residents.
Republicans vehemently opposed the bill, filing more than 110 amendments in an attempt to kill it.
The bill passed, but Lamont vetoed it days later, saying he was seeking more “buy-in from local communities” which have, historically, been opposed to building more housing that is affordable within their own town lines. Negotiations with the governor’s office on a new version of HB 5002 are ongoing.
