FBI Raids Corporate Landlord in Rental Price Fixing Scheme
The FBI recently conducted a significant raid on the Atlanta headquarters of Cortland Management as part of an ongoing investigation into an alleged rental price-fixing scheme involving several corporate landlords and a software company called RealPage. This investigation is part of a broader crackdown on anticompetitive practices in the rental market.
Details of the Raid
On May 22, 2024, FBI agents executed a search warrant at Cortland Management’s office in Atlanta. This raid is linked to the Department of Justice’s antitrust investigation into whether Cortland and other corporate landlords colluded to inflate rent prices using RealPage’s YieldStar software. This software collects and analyzes rental data to suggest price increases, which landlords reportedly acted on 80-90% of the time.
RealPage’s Role
RealPage, a Texas-based company, provides pricing recommendations to landlords, affecting over 16 million rental units nationwide. The company’s software uses data from landlords to set rental prices, which has raised concerns about the potential for collusion and price manipulation. This practice may lead to artificially high rents, significantly impacting renters across the country.
Legal and Market Implications
The investigation centers on whether RealPage’s algorithmic recommendations constituted an illegal price-fixing scheme under the Sherman Act, which prohibits competitors from collaborating to control market prices. If proven, this scheme could have major legal and financial repercussions for the involved parties and might prompt stricter regulations on rental pricing practices.
Impact on Renters
Renters have faced steadily increasing rents, partly attributed to these alleged anticompetitive practices. The use of YieldStar has enabled landlords to raise rents even in markets with high vacancy rates, exacerbating the housing affordability crisis. This investigation aims to address these unfair market practices and restore competitive pricing in the rental market.
