Greystar Settles $7 Million Antitrust Lawsuit Over Rent Hikes

Greystar, the largest landlord in the United States, has reached a settlement of $7 million in an antitrust lawsuit. This legal action alleges that the property management firm colluded with competitors to artificially inflate rent prices. The settlement follows an investigation led by the U.S. Department of Justice, alongside a coalition of nine state attorneys general, including California’s own Rob Bonta.

According to a recent news release by Attorney General Bonta, Greystar and other property management companies engaged in practices that compromised market competition. Specifically, they shared sensitive data through algorithms provided by RealPage, a software company known for its pricing recommendations. Bonta stated, “Whether it’s through smoke-filled backroom deals or through an algorithm on your computer screen, colluding to drive up prices is illegal.”

The lawsuit asserts that these actions allowed Greystar to raise rents unlawfully by using RealPage’s algorithms. These algorithms informed landlords about competitors’ pricing, thus enabling them to implement uniform price increases. This practice, described as a “price alignment scheme,” significantly impacted renters, leaving them with limited options.

In the settlement, Greystar agreed to pay the $7 million in penalties and fees to the state. The company has committed to halting the use of any software that utilizes competitively sensitive information for rent price alignment. Furthermore, Greystar will cooperate with the state’s ongoing prosecution against RealPage.

Greystar manages numerous properties in Silicon Valley, including apartment buildings and townhomes in Mountain View. Some of these include the Landsby, Revela, and Rowe at Pear Village. The company also oversees properties in San Jose, managing over a dozen locations such as One South Market Apartments and The Standard in Willow Glen.

The implications of this case extend beyond rent prices. Bonta highlighted that the algorithmic practices were particularly detrimental to multifamily apartment buildings in Southern California. While the attorney general’s office could not confirm whether properties in Santa Clara and San Mateo counties were affected due to the ongoing lawsuit, the ramifications of the settlement may resonate throughout the rental market.

In addition to property management, Greystar is actively involved in real estate development. The company is currently planning to redevelop the historic Chase Bank building in Mountain View into a mixed-use six-story residential complex.

As the settlement concludes this particular legal chapter, Greystar’s spokesperson, Garrett Derderian, expressed a commitment to focusing on serving their residents and clients moving forward. The case serves as a reminder of the ongoing scrutiny of rental practices and the importance of maintaining fair competition in the housing market.