Authorities are investigating nine major apartment landlords for allegedly conspiring with a software company to illegally raise rents in Arizona, including three companies responsible for a combined 39 apartment communities with thousands of units in Oklahoma.
The District of Columbia attorney general’s office is also going after the software company, RealPage Inc., and 14 D.C. apartment owners and managers for alleged rent-fixing, as fallout continues over what many consider excessive, COVID-related rent increases, assailed by President Joe Biden and others.
RealPage aids landlords in a kind of “dynamic pricing,” also called “surge pricing” or “peak pricing,” where customers pay more during periods of high demand, with rents reset daily.
Settlements have been reached with some corporate landlords, including one from a case in Tennessee.
In addition, in response, U.S. Sen. Elizabeth Warren, D-Massachusetts, recently introduced her American Housing and Economic Mobility Act, and Sen. Amy Klobuchar, D-Minnesota, sponsored the Housing Acquisitions Review and Transparency (HART) Act, which would provide more housing, among other things.
They also called on Congress to pass Biden’s 5% rent cap proposal.
It is unknown whether any apartment rents in Oklahoma were set using the software, although one of the companies told The Oklahoman it did not use it.
Newer apartments are likely to use the dynamic approach to setting, and resetting, rents, whether using RealPage or some other software, said David Dirkschneider, a partner and broker with Capstone Cos.
“It’s more common on newer properties to do what’s called daily pricing, which changes the rents on a daily basis based on the market,” he said “Older properties don’t do that as much, but some do.
“Essentially it looks at what other properties are charging, compares that to what size of units (number of beds and baths) are available in the area and at your property, and tells you what rents you should charge that will maximize occupancy and rents. It doesn’t always give them the highest rents. Sometimes it says to charge less because there is less demand for a specific type of unit.”
Landlords in Arizona lawsuit over alleged rent-fixing own or manage 8,727 individual apartments in Oklahoma City
The three companies facing the Arizona lawsuit that manage apartments in Oklahoma have 8,727 individual units, according to their online marketing.
Neither Weidner Property Management LLC nor Greystar Management Services LP, two of the companies with apartments in Oklahoma, returned inquiries about rents and the rent-setting process here.
Weidner, based in Kirkland, Washington, owns 15 complexes in OKC and five in Tulsa. Greystar, based in Charleston, South Carolina, owns nine properties in OKC and six in Tulsa.
The third, Apartment Management Consultants LLC, in Salt Lake City, Utah, responded with a statement it issued in February, when Arizona Attorney General Kris Mayes filed a lawsuit against it and the others. AMC manages student-oriented Norman Creek Apartments in Norman, a complex in Broken Arrow and two in Tulsa.
“AMC has neither promoted nor encouraged any client/property owner on its managed property portfolio to use RealPage (rent management) software,” the company said, noting that the owner of one of the 85 properties it manages did contract with RealPage directly. “AMC is not a party to that contract.”
Sierra Bennett, AMC regional communications director, added, “AMC does not use the product in question in its management of the four properties located in Oklahoma, nor has it ever done so.”
RealPage denies allegations of rent-fixing, and decries ‘false claims’
For its part, RealPage, online, decried the legal actions, “false claims,” and critics’ perpetuation of “an inaccurate and distorted narrative about RealPage, our revenue management solutions, and the many benefits we bring for residents and housing providers, including a healthier and more efficient rental housing ecosystem.”
RealPage, which is based in Richardson, Texas, did not respond to an inquiry from The Oklahoman, but the company has posted what amounts to a press kit online outlining its responses to the allegations.
“The purpose of RealPage (rent management system) is to optimize revenue ― not to maximize rents. It makes rental price recommendations in all directions: higher, lower, or at the current rent price,” the company says.
The criticism is misdirected, Dana Jones, RealPage CEO and president, says online.
“Housing affordability should be the real focus,” Jones says. “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.”
Details of Arizona attorney general’s allegations against RealPage and corporate landlords
Mayes zeroed in on RealPage as the leading cause of excessive rent increases.
“In the last two years, residential rents in Phoenix and Tucson have risen by at least 30% in large part because of this conspiracy that stifled fair competition and essentially established a rental monopoly in our state’s two largest metro areas. RealPage and its co-defendants must be held accountable for their role in the astronomical rent increases forced on Arizonans,” he said in a press release earlier this year.
The Arizona attorney general’s office said its lawsuit specifically alleges that:
“The defendant landlords illegally colluded with RealPage to artificially raise rents and concealed their conspiracy from the public.””RealPage’s conspiracy with the landlord co-defendants violate both the Arizona Uniform State Antitrust Act and the Arizona Consumer Fraud Act.””The illegal practices of the defendants led to artificially inflated rental prices and caused Phoenix and Tucson-area residents to pay millions of dollars more in rent.”Sen. Elizabeth Warren, D-Massachusetts, and government watchdog group call for more investigation of apartment companies using RealPage
Recently, Warren, Bharat Ramamurti, former deputy director of the White House National Economic Council, and representatives of government watchdog group Accountable.US held a virtual press briefing on what they called profiteering by large landlords, including alleged illegal collusion on rent pricing using RealPage’s algorithmic software.
They called for state investigations of large landlords using RealPage, passing Warren’s and Klobuchar’s bills as well as Biden’s 5% rent cap proposal.
“While the main long-term solution to rising rents is more affordable housing supply, short-term steps to prevent collusion and price gouging by large landlords would offer relief to renters in many markets across the country,” Ramamurti said during the briefing.
On the call, Accountable.US reviewed its recent analysis finding that the six largest publicly traded apartment companies — none of which operate in Oklahoma ― together brought in nearly $300 million in increased profits in the first quarter of 2024, “many due to rent increases.”
All six landlords named in the report have faced lawsuits related to their use of RealPage.
“Big corporate landlords are gouging tenants for more profit,” said Caroline Ciccone, president of Accountable.US. “Many of the same CEOs that claimed they had no choice but to hike rent on everyday Americans have turned around and bragged to shareholders about massive profits increases.”
Oklahoma City-area apartments managed by Weidner Property Management LLC35 Degrees North Apartment Homes, 371 units, 2800 NW 192Aviare Arts District Apartment Homes, 303 units, 301 N Walker Ave.Brookwood Village Apartment Homes, 1,144 units, 9401 S Shartel Ave.The Edge at Midtown Apartments, 250 units, 1325 N Walker Ave.The Encore Apartment Homes, 396 units, 3916 NW 164Indigo Apartment Homes, 896 units, 12601 and 12701 N Pennsylvania Ave.Liberty Pointe Apartment Homes, 324 units, 6600 SE 74Lincoln at Central Park Apartment Homes, 708 units, 500 Central Park DriveThe Metropolitan Apartment Homes, 329 units, 800 N Oklahoma Ave.Quail Landing Apartment Homes, 216 units, 14200 N May Ave.Stoneleigh on May Apartment Homes, 244 units, 14300 N May Ave.Sycamore Farms Apartments, 398 units, 14900 N Pennsylvania Ave.Residence at North Penn Apartments, 276 units, 14520 N Pennsylvania Ave.Villas at Countryside Apartment Homes, 360 units, 9501 S Interstate 35 Service Road, Moore.Weidner Property Management also manages apartments in Tulsa: 71 at Tulsa Hills, The Enclave at Brookside, Lincoln Villas on Memorial, Memorial Creek and Woodland Park.Oklahoma City-area apartments managed by Greystar Management Services, Charleston, South CarolinaAlbum Quail Springs, 140 units, 14201 N Kentucky Ave.Magnolia Row, 87 units, 6300 W Memorial RoadMuse Apartments, 302 units, 700 NW 4Pure OKC, 150 units, 3300 S Mustang Road, YukonThe Avenue at Norman, 302 units, 3301 12th Ave. SE, NormanThe Haven, 65 units, 601 Robert S Kerr Ave.The Residences at OAK, 320 units, 5200 Oak St.West Village Apartments, 345 units, 835 W Sheridan Ave.Woodland Trails, 543 units, 12401 N MacArthur Blvd.Greystar Management Services also manages apartments in Tulsa: Cascades at Southern Hills, Coventry Park, Eagle Point Apartments, NOMA Apartments, Parc 1010 and The Laurel.Oklahoma apartments managed by Apartment Management Consultants, Salt Lake City, UtahNorman Creek Apartments, 300 Hal Muldrow Drive, NormanHeights at Battle Creek, Broken ArrowStonehaven Villas, TulsaVantage on Yale, Tulsa
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Senior Business Writer Richard Mize has covered housing, construction, commercial real estate and related topics for the newspaper and Oklahoman.com since 1999. Contact him at [email protected]. Sign up for his weekly newsletter, Real Estate with Richard Mize. You can support Richard’s work, and that of his colleagues, by purchasing a digital subscription to The Oklahoman. Right now, you can get 6 months of subscriber-only access for $1.
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