Denver-based Simpson Property Group, Greystar and other companies settle $141M rent dispute

ions of tenants included in the settlement class.

In a recent development, Greystar, along with 25 other property management companies, has agreed to pay over $141 million to settle a class action lawsuit that alleges landlords used rent-setting algorithms provided by RealPage to drive up housing costs. The proposed settlement, filed in a Tennessee federal court, stipulates that Greystar, as the nation’s largest landlord, would pay $50 million if approved by a judge.

One of the key elements of the settlement is the agreement by all parties to stop sharing nonpublic information with RealPage for its rent algorithm. Plaintiffs claim that RealPage used this information to assist landlords in aligning their prices to increase rents. Attorneys involved in the case have lauded this move as a significant change in the multifamily housing industry that will help eliminate the alleged anticompetitive coordination.

While the companies involved in the settlement maintain their innocence, they have pledged to cooperate with plaintiffs in the ongoing case against RealPage and other property management firms that have not yet settled. RealPage is currently embroiled in an antitrust lawsuit initiated by the Department of Justice and several state attorneys general. Greystar had previously reached a settlement in a related case in August of this year.

The funds accrued from the class action lawsuit settlement will be allocated to millions of tenants covered under the settlement class. Greystar expressed that the settlements enable them to refocus on serving residents and clients. With their headquarters in South Carolina, Greystar manages a portfolio of more than 946,000 units across the United States, as per data from the National Multifamily Housing Council.

RealPage, based in Texas, has denied any wrongdoing and maintains that the litigation misunderstands the functionality of their product. The company clarified that their software is utilized in less than 10% of rental units in the U.S., with landlords implementing its price suggestions less than half the time. RealPage’s software offers daily recommendations to aid landlords in pricing their available apartments. While the recommendations are optional, critics argue that the software’s access to confidential data allows landlords to charge inflated rents.

RealPage contends that the primary reason for high rents is the scarcity of housing supply. Their pricing recommendations often advise landlords to decrease rents to maintain high occupancy rates and maximize revenue. Among the companies involved in the settlement, BH Management, based in Iowa, is set to pay $15 million, while Simpson Property Group, headquartered in Denver, will pay $6.5 million. Settlement amounts for the remaining firms range from $550,000 to $6 million.