The U.S. Department of Justice amended its lawsuit Tuesday against tech company RealPage to include six corporate landlords, while settling claims with Atlanta-based Cortland Management, whose offices the FBI raided last year as part of a now-defunct criminal probe.
RealPage sells technology to landlords that makes recommendations on how much to charge for rent. In August 2024, the Justice Department’s antitrust lawsuit alleged the tech stifles competition and inflates rents for millions of Americans, including tens of thousands in metro Atlanta.
DOJ officials said Cortland has agreed to cooperate with the government and stop using “rental pricing algorithms” and sensitive data to set prices for its apartments.
Under a proposed final judgment, Cortland would be barred from using competitors’ data with price-setting software, and not use third-party software or algorithms to price apartments without a corporate monitor.
The decree would forbid it from “soliciting, disclosing or using any competitively sensitive information” to set prices or make rental pricing recommendations, the DOJ added.
DOJ officials said the consent decree with Cortland would need final approval from the federal court judge in Greensboro, North Carolina.
Five other landlords besides Cortland were named in the amended filing, including Greystar Real Estate Partners; Blackstone’s LivCor; Camden Property Trust; Cushman & Wakefield and Pinnacle Property Management Services; and Willow Bridge Property Company.
Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division said the landlords had shared sensitive information and used RealPage’s algorithm to keep rents high.
“Today’s action against RealPage and six major landlords seeks to end their practice of putting profits over people and make housing more affordable for millions of people across the country,” Mekki said in a statement.
The FBI searched the Atlanta offices of Cortland in May 2024. Cortland manages 80,000 rental units in 13 states, according to the DOJ. At that time, Cortland said the raid was part of an investigation into “potential antitrust violations in the multifamily housing industry.”
In December, RealPage said the antitrust division told the company it had ended the criminal probe. Cortland spokeswoman Rachel Prude confirmed in an email Tuesday that the company’s employees were no longer under investigation.
“We believe we were only able to achieve this result because Cortland has invested years and significant internal resources into developing a proprietary revenue management software tool that does not rely on data from external, non-public sources,” Prude wrote. “We look forward to putting the federal government’s investigations behind us.”
RealPage said it will “vigorously” defend against the claims.
“We are disappointed that the DOJ, just one month after abandoning its baseless criminal investigation and less than two weeks before the agency changes hands, is expanding its civil lawsuit related to use of revenue management software,” RealPage spokesperson Jennifer Bowcock said. “Fewer than 10% of all rental housing units in the U.S. use RealPage software to suggest rental prices, and our software recommendations are accepted less than half the time, as the DOJ has acknowledged.”
She said the company’s use of nonpublic data was legal, and that it “does not make sense” to target its customers when a housing shortage was to blame for high costs.
“This lawsuit will do nothing to make housing more affordable and will stifle the innovation that helps the U.S. remain globally competitive,” Bowcock said.
According to court records, there are about 484,000 multifamily rental units in Atlanta, Sandy Springs and Alpharetta. More than 53% of owners, managers and owner-operators used RealPage’s software in those markets, including Cortland Management and the property management company Pinnacle, according to a consolidated complaint against RealPage in Nashville, Tennessee.
In December, the White House Council of Economic Advisers suggested the average cost to renters in 2023 from using price-setting software, or “algorithmic pricing,” was an extra $70 a month. In six major metros, it found the cost was more than $100 a month. In Atlanta, it was $181 a month — more burdensome than any other metro the council looked at.
It suggested that the total cost to renters in 2023 could have been as high as $3.8 billion.
About the Author
