Photo by Patricia Lim/KUT News. The Cascades at Onion Creek apartment complex is owned by Greystar, one of the companies being sued by the Department of Justice.
U.S. accuses six landlords of rent price fixing. See which apartments they own in Austin.
Tuesday, January 21, 2025 by Audrey McGlinchy, KUT
Tens of thousands of renters in the Austin area may have had their rents set by landlords accused of using software to illegally fix prices, according to a Department of Justice lawsuit and an analysis of data by KUT.
Last summer, the Department of Justice sued Texas-based software company RealPage, accusing it of violating antitrust laws. The government alleges RealPage owns software that uses millions of data points from apartment owners to recommend on a daily basis rent prices managers should charge.
Managers told federal lawyers it was often hard to override the software recommendations and lower prices. One landlord quoted in the lawsuit said they began raising rents within a week of using the software and had increased rents 25 percent over 11 months.
Tenants end up paying higher rents than they otherwise would, the government argues. RealPage has denied these allegations and argues instead that its software streamlines the process of managing rental housing.
The DOJ last week amended its legal filings to include six landlords and management companies federal lawyers say harmed renters by sharing private data and agreeing to set prices. In Austin, these companies own a significant share of rental homes.
The companies include Greystar Real Estate Partners LLC; Blackstone’s LivCor LLC; Camden Property Trust; Cushman & Wakefield Inc and Pinnacle Property Management Services LLC; Willow Bridge Property Company LLC; and Cortland Management LLC.
By email, Greystar and Cushman & Wakefield denied engaging in price-fixing.
“We are disappointed that the DOJ added us and other operators to their lawsuit against RealPage,” a Greystar spokesperson said. “At no time did Greystar engage in any anti-competitive practices.”
According to an analysis by KUT, Greystar and others own and manage at least 52,715 rental homes in the Austin metro. That accounts for roughly 13 percent of all multifamily homes and 5 percent of all homes in the region.
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Reporters at The Washington Post recently compiled a database of apartments owned by landlords that the federal government said may have used this software. This list includes dozens more companies than the six sued by the DOJ. Reporters found a much higher share of apartments owned and managed by companies using this software in Austin – roughly 46 percent.
That was the highest share among other metros in the country.
People who study housing and the real estate market say Austin leads the pack in housing owned by companies alleged to have used price-fixing software because of the city’s pattern of building.
As Austin’s population has boomed in the past two decades, so has apartment construction. Historically, the city’s land use rules have made it hard to build anything other than single-family homes and large apartment buildings.
At the same time, it’s become more common for private equity-backed firms, such as Greystar, to own large complexes, according to a 2022 analysis by ProPublica. These companies, which tend to own thousands of apartments, may be more inclined to use the kind of software the federal government is now investigating.
“Austin has grown so fast and so recently that a big chunk of the rental stock that we have now has been built in the past 20-25 years in the form of these huge developments,” Jake Wegmann, a real estate professor at UT Austin, said. “I would assume it’s more worth it to use a tool like RealPage if you’re operating at scale.”
The federal government is asking a judge to bar RealPage and the companies added to the lawsuit from anticompetitive behavior, including using software it says was designed to set prices.
In a preview of what a judgment may look like, the DOJ announced last week it had started settlement proceedings with Cortland, which owns roughly 2,000 apartments in the Austin metro. If a judge signs off on the agreement, Cortland would be prohibited from using other landlords’ data to come up with pricing models or using software that does the same without someone from outside the company monitoring its usage.
Experts KUT spoke with reasoned that rent prices might come down if companies are outlawed from using this kind of software. Rents in Austin have already been falling for nearly two years, bucking trends across the country. The drop is thanks, in part, to a large building boom.
Council members in the past year have tried to add to this boom by allowing property owners to build more in single-family neighborhoods.
Awais Azhar, executive director of the nonprofit HousingWorks Austin, said the alleged price-fixing defeats the goal of bringing down prices by building more homes. (Azhar himself lives in a complex owned by one of the companies accused of price-fixing.)
“How do we ensure that those efforts do not get undermined by … not having a free market where people can compete?” he said.
Support for KUT’s reporting on housing news comes from the Austin Community Foundation. Sponsors do not influence KUT’s editorial decisions.
This story was produced as part of the Austin Monitor’s reporting partnership with KUT.
The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.
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