DC Attorney General Charges Landlords with Using Algorithmic Tool to Illegally Raise Rents

In a complaint filed today, DC’s attorney general Brian Schwalb alleged that fourteen of DC’s largest landlords used a high-tech tool called RealPage to hide the fact that they were conspiring to keep rental prices high. In the DMV metropolitan area, more than 90% of units in large buildings are priced using RealPage, and the attorney general estimates that this has costed renters millions of dollars in artificially inflated rent prices.

“RealPage and the defendant landlords illegally colluded to artificially raise rents by participating in a centralized, anticompetitive scheme, causing District residents to pay millions of dollars above fair market prices,” said AG Schwalb. “Defendants’ coordinated and anticompetitive conduct amounts to a District-wide housing cartel.”

RealPage is a company that provides landlords and property managers with products that use algorithms to suggest what price to set rents at. In return, landlords pay RealPage and supply it with sensitive data about the rents they they are setting. This tends to create a feedback loop in which the rents that landlords tell RealPage they are charging feed the suggestions that RealPage tells to all other landlords, enabling them to collude to raise prices. Indeed, wherever RealPage has become dominant, rents have increased. This is even for buildings that do not use RealPage.

This is just one example among many of businesses using algorithms as a cloak for conduct that clearly violates longstanding consumer protection and civil rights laws. EPIC’s work uncovering and fighting these practices includes its Screened & Scored in the District of Columbia report published last year, which detailed dozens of automated decision-making systems used in the District.