Minneapolis rent-fixing scheme lawsuit: Council briefed on allegations
Mpls council briefed on landlord price-fixing case
A Minneapolis City Council committee will receive an update from the Minnesota Attorney General’s Office about the ongoing lawsuit against six of the nation’s largest landlords, alleging a scheme to inflate rent prices by using anti-competitive pricing algorithms and data sharing.
MINNEAPOLIS (FOX 9) - A Minneapolis City Council committee received a briefing from the Minnesota Attorney General’s Office about the ongoing lawsuit against six of the nation’s largest landlords, alleging a scheme to inflate rent prices by using anti-competitive pricing algorithms and data sharing.
READ MORE: DOJ sues 6 major landlords, including some with MN properties
Local perspective:
A representative of the Minnesota Attorney General's Office Antitrust Division gave a presentation on software that utilizes algorithms in rental rates during the Minneapolis City Council Business, Housing and Zoning Committee meeting on Tuesday.
Justice department lawsuit
The backstory:
The lawsuit targets RealPage Inc. and several landlords, including Camden, LivCor, Greystar, Cushman & Wakefield, Willow Bridge and Cortland – the latter four of which operate in the Twin Cities.
According to the civil antitrust lawsuit, landlords are accused of using anti-competitive pricing algorithms by a company called RealPage.
The scheme alleges competitors shared pricing information with each other to inflate the cost of rent, leading to higher living expenses for residents and bigger profits for landlords.
The Justice Department is suing the six property management companies which collectively control 1.3 million units in 43 states. The companies Greystar, Cushman & Wakefield, Willow Bridge and Cortland, operate 92 communities in Minnesota.
Minnesota Attorney General Keith Ellison is one of 10 attorneys general to join the lawsuit as a co-plaintiff.
In a previous statement, property manager Greystar, which operates nearly 30 apartment complexes in the metro, said, in part: "Greystar has and will conduct its business with the utmost integrity. At no time did Greystar engage in any anti-competitive practices. We will vigorously defend ourselves in this lawsuit."
Cortland, which manages just one apartment building in Minneapolis, plans to settle with the justice department, and stop using fixing algorithms.
What's next:
The assistant attorney general told council members during the briefing that antitrust suits are by their nature heavy and slow. It will likely take years for the case to work through the system.
As the lawsuit is ongoing, Council Member Robin Wonsley brought up an ordinance she is proposing that would ban the use of algorithms based on non-public data to advise landlords on rent prices.
The Source: Previous FOX 9 reporting and a press release from the city.