DENVER (KDVR) — Some Colorado residents are now trying to join a class action lawsuit filed against several property management companies, accusing them of artificially inflating rent prices here, and across the country.
The renters brought suit against some of the largest property management companies in the nation.
Six of the companies named in the lawsuit have properties in Colorado:
- Greystar Real Estate Partners
- Lincoln Property Co.
- FPI Management
- Mid-America Apartment Communities
- Avenue5 Residential
- Equity Residential
William Hess is a Boulder resident who has contacted an attorney to see if he can join the lawsuit.
“I just think that the pricing is way out of line for the services they are providing,” he said.
Hess says Greystar managed his Boulder rental for three years before another company recently took over.
“It’s crazy the amount of rent. It’s like up over $2,500 a month now for a little two-bedroom shoebox that was built sometime in the ’70s,” he said.
The lawsuit includes real estate analytics software firm RealPage as a defendant. A ProPublica investigation preceding the lawsuit found high concentrations of landlords using RealPage in cities where rents have risen dramatically in the past few years.
It alleges that each of the management companies illegally shared RealPage’s algorithm-born pricing with each other in order to inflate rental prices rather than competing with each other on rent prices to attract renters.
RealPage provided KDVR with this statement in response to the original article and the lawsuit.
“The ProPublica article contains inaccuracies and is misleading; RealPage completely disagrees with its conclusions.
Rent prices are determined by various factors including supply and demand as well as each property owner’s unique circumstances.
There is a housing supply shortage and that alone drives prices higher. Occupancy has been at an all-time high.
RealPage’s revenue management software is purposely built to be legally compliant. It focuses on the internal supply and demand dynamics at a particular property and does not consider or have any visibility into availability (supply) at competing properties.
Revenue management is commonly used across many industries, and innovations in this area have been to the mutual benefit of both consumers and vendors. RealPage’s software is but one of a number of such tools available in the marketplace to property operators across the U.S.
The ProPublica article repeatedly takes information out of context and ignores key facts to craft a distorted picture of how revenue management software works. One example: The article prominently states that ‘RealPage discourages bargaining with renters’ while ignoring the big reason why many housing providers prefer bottom-line pricing. Negotiating rent opens up the possibility of providing different renters with different pricing for the same housing unit, which can put housing providers squarely in violation of federal Fair Housing laws. Fair housing compliance is one of the reasons why revenue management software exists.
RealPage is aware of the lawsuit. We strongly deny the allegations and will vigorously defend against the lawsuit. Beyond that, we do not comment on pending legislation.”
RealPage
The companies mentioned manage at least 200 upscale apartment complexes in the Denver metro from Castle Rock to Boulder.