Housing affordability and competition in Washington, D.C., are at the center of two settlements requiring major apartment owners to pay $9.3 million and change how rental pricing information is used. The agreements resolve allegations by the District of Columbia's Office of the Attorney General that the landlords participated in an alleged scheme involving RealPage pricing software.
JBG Smith and Mid-America Apartments reached separate settlement agreements with the District. JBG Smith will pay $8.1 million and MAA will pay $1.2 million in civil penalties, payments to impacted residents and legal fees.
The allegations concern the use of RealPage revenue management software to establish rental prices. According to the District, JBG Smith used the software at multiple D.C. properties, while MAA used it at one property.
The District alleged that JBG Smith, MAA and other landlords shared sensitive, non-public information through the pricing system, reducing direct competition in the rental market.
The settlements require both landlords to reform their rent-setting practices. JBG Smith and MAA must prohibit the use of revenue management software that relies on confidential or non-public pricing information from other companies.
The agreements also restrict the landlords from encouraging other property owners to use such software or accept recommended rental prices. They must also stop sharing non-public information with other landlords or property managers when that information could facilitate anticompetitive coordination.
The District can appoint an independent monitor at a company's expense if it determines that potential violations of the settlement terms require additional compliance oversight.
The enforcement action has implications for owners and operators of multifamily properties using technology for revenue management. The District's attorney general stated that more than 30% of apartments in multifamily buildings with at least five units, and about 60% of units in buildings with 50 or more units, have been priced using RealPage revenue management software.
The settlements add to the District's broader antitrust enforcement involving rental housing and technology-based pricing practices.
Multifamily owners and property managers using automated pricing platforms face increased scrutiny over how market data is collected, shared and incorporated into rental decisions. The settlements demonstrate the potential legal and financial consequences of pricing practices that regulators determine may restrict competition or rely on confidential competitor information.
Source: OAG.
