Actual property large Greystar and 25 different property administration firms have agreed to collectively pay greater than $141 million to settle a category motion lawsuit accusing landlords of driving up housing prices through the use of rent-setting algorithms provided by the software program firm RealPage.
Greystar, the nation’s largest landlord, would pay $50 million underneath the proposed settlement settlement, which was filed Wednesday in a Tennessee federal courtroom. The deal would nonetheless require a choose’s approval.
The businesses have additionally agreed to not share nonpublic data with RealPage for its lease algorithm — a key stipulation, since plaintiffs say RealPage used that data to allow landlords to align their costs and push up rents.
“This represents a elementary shift within the multifamily housing trade and can assist reverse the kind of anticompetitive coordination alleged within the Criticism,” attorneys wrote within the settlement submitting.
All firms concerned within the settlement deny wrongdoing and have agreed to assist plaintiffs within the ongoing case in opposition to RealPage and greater than a dozen different property administration companies that haven’t reached settlements. RealPage and others are additionally preventing an antitrust lawsuit filed final 12 months by the Division of Justice and several other state attorneys normal. Greystar reached a settlement in that case in August.
The settlement funds from the category motion lawsuit could be distributed amongst tens of millions of tenants included within the settlement class.
In an announcement, Greystar stated these settlements “enable us to maneuver ahead and stay centered on serving our residents and purchasers.” Headquartered in South Carolina, Greystar manages greater than 946,000 items nationwide, in response to the Nationwide Multifamily Housing Council.
RealPage has vehemently denied any wrongdoing and argues that the plaintiffs misunderstand how their product works. RealPage, which relies in Texas, has stated its software program is used on fewer than 10% of rental items within the U.S., and that its worth suggestions are used lower than half the time.
“Whereas the proposed settlements … don’t embrace RealPage, we’re inspired to see this matter transfer towards closure,” Jennifer Bowcock, RealPage’s senior vice chairman for communications, stated in an announcement. “RealPage continues to consider that this litigation is with out advantage and that our income administration merchandise, and our prospects’ use of them, have at all times been authorized.”
RealPage software program gives day by day suggestions to assist landlords and their workers worth their obtainable residences. The landlords wouldn’t have to observe the ideas, however critics argue that as a result of the software program has entry to an unlimited trove of confidential knowledge, it helps RealPage’s purchasers cost the very best attainable lease.
RealPage argues that the true driver of excessive rents is a scarcity of housing provide. It additionally says that its pricing suggestions typically encourage landlords to drop rents since landlords are incentivized to maximise income and keep excessive occupancy.
Among the many different defendants, Iowa-based BH Administration would pay $15 million, whereas Denver-based Simpson Property Group would pay $6.5 million. The opposite firms’ settlements vary between $550,000 and $6 million.
