Charlotte, N.C. — North Carolina’s Attorney General, Jeff Jackson, has filed a lawsuit against six major real estate companies that manage thousands of homes and apartments. The lawsuit claims that these companies secretly worked together to increase rents, violating fair market competition and ultimately charging renters more than they should be paying.
The companies named in the lawsuit are Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc., Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC, and Cortland Management LLC. These firms are responsible for over 70,000 housing units in North Carolina, including one-third of all apartments in the state’s largest cities like Charlotte, Raleigh, and Durham-Chapel Hill.
Alleged Rent Inflation Through Collusion
The lawsuit accuses these companies of working together to raise rents rather than competing against each other to offer fair prices. This collusion is said to have caused renters in North Carolina to pay significantly higher rents, with some estimates suggesting millions of dollars were wrongfully taken from tenants. Attorney General Jeff Jackson emphasized the impact on renters, noting that many are already struggling to afford their homes.
The lawsuit is part of a wider case against the software company RealPage, which allegedly provided a pricing algorithm that helped landlords set prices in a way that violated antitrust laws. RealPage is accused of using competitive data to assist landlords in increasing rents across various markets, including North Carolina.
The Role of Artificial Intelligence
Jackson explained that the landlords involved in the case used RealPage’s AI-driven software to coordinate their pricing strategies. Instead of meeting in person to discuss rent prices, these landlords allegedly used the software to set similar rates across different properties, making it appear as if the market was naturally raising rents when, in fact, it was a coordinated effort.
“If landlords were to meet in person and ask each other what they are charging or all set the same price, it would be illegal,” Jackson explained.
The use of AI in this manner is seen as an effort to manipulate the market and prevent competition, ultimately benefiting the landlords at the expense of renters who face higher rents.
Impact on Renters and the State’s Housing Market
The lawsuit also highlights the broader issue of rent affordability in North Carolina. According to the lawsuit, renters in the U.S. are already paying a significant portion of their income toward housing. For example, by 2017, typical renters without a college degree were spending about 42% of their income on rent. College graduates were spending around 34% of their income on rent, up from 25% in 2000.
These rising rent costs are especially concerning for low and middle-income residents, as wages have not kept pace with the increasing demand for housing. The lawsuit argues that the alleged collusion by these landlords only exacerbates this problem.
Reactions from the Defendants
In response to the lawsuit, Greystar Real Estate Partners, one of the companies involved, issued a statement denying any wrongdoing. The company claimed that it had always conducted its business ethically and did not engage in any anti-competitive practices.
“We are disappointed that the DOJ added us and other operators to their lawsuit against RealPage. 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,” the statement read.
Despite the company’s defense, the case has brought national attention to the issue of rent inflation and potential market manipulation in the real estate sector.
The Legal Context
The lawsuit was initially launched when Josh Stein, the current Governor of North Carolina, served as the Attorney General. Now under the leadership of Jeff Jackson, the case has expanded to include several other states and federal authorities. Jackson has made it clear that the state is committed to holding these companies accountable and ensuring that North Carolinians get fair prices for rent.
The case continues to develop, and its outcome could have significant implications for renters across the state. Legal experts believe that if the lawsuit proves successful, it may lead to more scrutiny of the real estate market and potential changes to how landlords set rental prices in the future.
The Bigger Picture
This lawsuit highlights an ongoing issue in housing markets across the U.S. as renters struggle to find affordable housing. The role of large corporations and the use of technology to manipulate prices could change how people view the housing market, especially in growing cities like Charlotte and Raleigh.
With the U.S. Department of Justice joining the case, it is clear that this issue has reached national importance. The outcome of the lawsuit will likely have a ripple effect, potentially reshaping how landlords and property management companies operate, especially when it comes to setting fair rent prices.
Conclusion
North Carolina’s Attorney General Jeff Jackson is standing up for renters in the state by filing a lawsuit against six major landlords accused of rent collusion. These companies allegedly used AI-driven software to coordinate rent prices, making it harder for residents to find affordable housing. As this case continues to develop, it could lead to significant changes in the real estate market, benefiting renters and promoting fair competition in the industry.
