Two DC Landlords to Pay $9.3 Million in RealPage Rent Price-Fixing Case
WASHINGTON, DC – Attorney General Brian L. Schwalb today announced that JBG Associates, L.L.C. (JBG Smith) and Mid-America Apartments (MAA) will pay a total of $9.3 million and change their business practices as part of separate settlement agreements resolving the OAG’s antitrust lawsuit alleging that the companies had illegally conspired with other landlords, using RealPage, Inc.’s pricing software, to inflate rents at thousands of apartments across the District. In DC, JBG Smith owns over 4,500 units and MAA owns 269 units.
“District residents face severe housing affordability challenges, and yet some of the largest residential landlords made things worse by illegally colluding to artificially push rents even higher,” said Attorney General Schwalb. “My office will continue to use the law to make sure that DC’s housing market is fair and competitive, that law-abiding landlords can compete on a level playing field, and that DC residents who want to live in the District can afford to live here.”
Background on RealPage
RealPage offers a variety of technology-based services to real estate owners and property managers, including revenue management (RM) products that rely on non-public, competitively sensitive pricing data that RealPage receives from the owners and managers. RealPage leverages this confidential data to estimate supply and demand for multifamily housing that is specific to particular geographic areas and unit types and then generates an inflated rental price.
In the District, well over 30% of apartments in multifamily buildings (i.e., buildings with five or more units), and approximately 60% of units in large multifamily buildings (with 50+ units), have been priced using RealPage’s RM software. This leaves many District residents with no choice but to pay inflated rents.
OAG’s Settlements with JBG Smith and MAA
OAG alleged that JBG Smith used RealPage’s RM software to set rents for multiple properties in the District, and MAA used RealPage’s RM software to set rents for one DC property. As a part of RealPage’s price-fixing cartel, OAG alleges that JBG Smith, MAA, and 12 other defendant landlords illegally coordinated to share sensitive, non-public company data, avoiding direct competition and delegating rent-setting authority to RealPage.
Under the terms of these two recent and separate settlement agreements, JBG Smith and MAA will:
Pay $9.3 million in civil penalties, money to impacted residents, and legal fees.
JBG Smith will pay $8.1 million.
MAA will pay $1.2 million.
Reform rent-setting practices to prohibit the use of revenue management software that relies on any non-public or confidential data from other companies.
Refrain from encouraging others to use revenue management software and to accept recommended rent prices, and from promoting the use of this type of software to other property owners.
Stop sharing non-public information with other landlords or property managers that can be used to collude in the way defendants previously did.
If OAG learns that JBG Smith or MAA may not be complying with the terms of this settlement, it has the authority under the settlement agreements to appoint an Independent Monitor, at the company’s expense, to evaluate the company’s compliance, and OAG will then determine additional steps to address any confirmed violations.
The District’s settlement agreement with JBG Smith is available here.
The District’s settlement agreement with MAA is available here.
These matters were handled by Assistant Attorneys General Ashley Walters and Mehreen Imtiaz, and overseen by Adam Gitlin, Chief of the Antitrust and Nonprofit Enforcement Section.
OAG previously announced settlements in the RealPage lawsuit with W.C. Smith, Avenue5, and Bell Partners.
Resources for Tenants
OAG works to ensure that residents across the District have access to safe and affordable housing and holds landlords accountable if they violate the law. Tenants can access OAG’s resources for guidance on how to report problems with a landlord or with housing conditions. Tenants may send complaints about housing conditions to HousingJustice@dc.gov.
OAG’s Antitrust Enforcement Actions
OAG has a long track record of holding companies accountable for antitrust violations that harm District consumers. In addition to filing the first government lawsuit against RealPage and 14 defendant landlords, OAG filed the first government lawsuit to challenge certain anticompetitive pricing policies by Amazon. OAG has also worked with state and federal partners to secure multiple antitrust wins against Google, recently played a leading role in winning a jury verdict against Live Nation for monopolizing the live entertainment industry, and has successfully opposed anticompetitive mergers such as those between Kroger and Albertsons and JetBlue and Spirit.