DOJ Investigates Criminal Price-Fixing Probe in Rental Housing Market

The Justice Department has broadened its investigation into the rental housing market, now including a criminal inquiry into a major developer of property pricing software, RealPage, and several of its clients. This move signals a dramatic escalation in the ongoing efforts to scrutinize potential price-fixing practices within the industry.

According to sources familiar with the matter, who spoke on condition of anonymity due to the sensitive nature of the investigation, the DOJ is delving into suspicions that RealPage may be enabling collusion among prominent residential property owners and management firms. According to Politico, these entities reportedly utilize RealPage’s software, raising concerns about potential anticompetitive behavior in setting rental prices.

The investigation, which has been in progress for at least two years, initially operated as a civil matter under the jurisdiction of the DOJ’s antitrust division. However, this recent development sees the inquiry transitioning into a criminal investigation, indicative of the government’s heightened scrutiny of alleged wrongdoing within the rental housing sector.

Read more: DOJ Wants National Association Of Realtors Probe Revived

The Biden administration has underscored its commitment to addressing anti-competitive practices across various industries, with a specific focus on sectors affecting everyday Americans, such as food, healthcare, and housing. President Biden, in his State of the Union address, emphasized the importance of combating excessive rental costs, highlighting the administration’s intent to crack down on large landlords engaging in price-fixing activities, reported Politico.

The DOJ’s antitrust division, spearheading the investigation, has reportedly issued subpoenas earlier this year on behalf of a federal grand jury in Washington. This marks a significant step forward in the probe, as it delves into the realm of algorithmic price-fixing—a relatively novel concept where alleged collusion is facilitated through software systems.

The implications of this investigation are far-reaching, potentially impacting not only RealPage but also numerous managers and owners of apartment complexes nationwide. The White House, in collaboration with the Department of Housing and Urban Development, has been actively pursuing policy directives aimed at addressing concerns within the rental housing market.

While details regarding the specific allegations remain undisclosed, the expansion of the probe underscores the government’s resolve to uphold fair competition and protect consumers from potential exploitation within the rental housing sector.

Source: Politico