Group wants state probe of real estate companies over rent-fixing claims

Attorney General Matt Platkin (Courtesy of the Attorney General's Office)

A progressive watchdog group is urging the state attorney general to probe whether real estate companies in New Jersey are using an illegal scheme to raise rents and boost their profits.

A letter Accountable.US sent Attorney General Matt Platkin last week asks him to investigate AvalonBay and Equity Residential, which have been sued by the District of Columbia over allegations that they improperly shared data with property pricing software company RealPage.

“Your office has the ability to determine whether these companies also stooped to illegal price-fixing and collusion in New Jersey to further pad their profits, as they allegedly have elsewhere — and power to hold them accountable if they did,” the June 26 letter states.

The D.C. lawsuit alleges that a group of real estate investment companies, including AvalonBay and Equity, colluded with one other in violation of a local antitrust law to have RealPage set rents, instead of competing over prices. The alleged scheme inflated rents for tens of thousands of D.C. apartments, forcing the tenants to pay millions of dollars in rent they shouldn’t have had to, the complaint says.

Attorneys general in Arizona and North Carolina have filed similar lawsuits. The U.S. Department of Justice is also investigating RealPage, Politico reports.

“If these companies were willing to allegedly engage in price fixing while surrounded by federal and local regulators in the nation’s capital and in other states, why wouldn’t they do the same in New Jersey?” the letter says.

Accountable.US released a report in June alleging that in the first three months of 2024, the six largest publicly traded apartment companies, all of which have faced lawsuits relating to their use of RealPage, saw a nearly $300 million net increase in their combined incomes “thanks to rent increases.”

The group claims that these companies are fueling the housing affordability crisis by hiking rents to fuel their profits.

Accountable.US President Caroline Ciccone said this matter “merits a serious and urgent review.” She noted that to seriously address skyrocketing housing costs will require robust action from Congress and the Biden administration, but regulators “at every level” should do their part.

RealPage is used by landlords to help estimate supply and demand for apartment listings, allowing them to determine rent.

“The time is now to address a number of false claims about RealPage’s revenue management software, and how rental housing providers operate when setting rent prices,” RealPage CEO and President Dana Jones said in a statement the company released last month. “Housing affordability should be the real focus. RealPage is proud of the role our customers play in providing safe and affordable housing to millions of people. Despite the noise, we will continue to innovate with confidence and make sure our solutions continue to benefit residents and housing providers, alike.”

In New Jersey, residents must earn a minimum of $38 an hour to afford to rent a two-bedroom home, the 7th highest housing wage in the country, according to the National Low Income Housing Coalition.  The median monthly rent in New Jersey is $2,500, according to Zillow, versus $2,150 nationwide.

A spokesman for the Attorney General’s Office declined to comment on the letter, and said the office does not comment on the status of investigations. Avalon and Equity could not be reached to comment.

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