Washington joins lawsuit claiming there’s a price-fixing scheme hurting local renters

The average rent for a two-bedroom apartment in Seattle is $2,690 a month. A new lawsuit accuses some landlords of price-fixing to keep rents above the national average.

Eight states, including Washington, have joined litigation against RealPage Inc., a property management software company. The lawsuit argues that the firm allows landlords to coordinate inflating apartment prices.

According to Apartments.com, rent prices in Seattle have increased by 1.6% in the past year, on average, about $32 more per month. This is similar to the state average of 1.4% and higher than the national average of -0.8%.

Case background: DOJ accuses RealPage of violating antitrust laws through scheme to hike rents

The cost of rent can vary depending on several factors, including location, size and quality. For example, the average rent for a studio apartment in Seattle is $1,575, but the average rent for a two-bedroom apartment in Pioneer Square is $2,324.

An estimated 800,000 leases in Washington have been priced using RealPage revenue management software since 2017, according to the state attorney general’s office.

“RealPage colluded to fix prices and keep rents rising in order to boost profits,” Washington State Attorney General Bob Ferguson said in a statement.

The suit accuses the company of contracting with competing landlords who share rental data, including information on prices in executed leases and renewals.

“Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law,” U.S. Attorney General Merrick Garland said.

The lawsuit said RealPage feeds this information into its algorithmic pricing software, which produces recommendations for rent prices and other lease terms.

RealPage responds to the price-fixing lawsuit

The company has a six-page response on the website, which included the following statement:

Starting in October 2022, false and misleading claims about RealPage and its revenue management software have been reported in the media and in legal filings. This has perpetuated an inaccurate and distorted narrative about RealPage, our revenue management solutions, and the many benefits we bring for residents and housing providers, including a healthier and more efficient rental housing ecosystem.

“RealPage has built a business out of frustrating the natural forces of vigorous competition,” said Assistant Attorney General Jonathan Kanter at a news conference Friday with top department officials. “The time has come to stop this illegal conduct.”

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The lawsuit argues the notion of competition has been undercut.

“RealPage replaces competition with coordination. It substitutes unity for rivalry. It subverts competition and the competitive process. It does so openly and directly — and American renters are left paying the price,” said the complaint, filed in U.S. District Court in North Carolina.

“RealPage’s revenue management software is purposely built to be legally compliant,” Jennifer Bowcock, a spokeswoman for the company, said in a statement reported in The Washington State Standard.

“You don’t need a Ph.D. to know that algorithms can make coordination among competitors easier,” Kanter said about the price-fixing allegations.

The state agency began investigating RealPage last year following reporting by ProPublica, a non-profit investigative news agency, about how the company’s software could contribute to rising rents.

“Training a machine to break the law is still breaking the law,” Deputy U.S. Attorney General Lisa Monaco said.

Bill Kaczaraba is a content editor at MyNorthwest. You can read his stories here. Follow Bill on X here and email him here.