Greystar Settles $7M Lawsuit Over Rent Price Manipulation

Greystar, the largest property management company in the United States, has agreed to a settlement of $7 million concerning an antitrust lawsuit that alleges collusion to inflate rental prices in Silicon Valley. This settlement follows a lawsuit initiated last year by the U.S. Department of Justice alongside a coalition of nine state attorneys general, targeting RealPage, a company that offers software using algorithmic models to suggest rent increases.

According to a press release from California Attorney General Rob Bonta, Greystar is accused of sharing sensitive competitive data with other landlords through RealPage’s algorithms, leading to artificially inflated rents. “Whether it’s through smoke-filled backroom deals or through an algorithm on your computer screen, colluding to drive up prices is illegal,” stated Bonta, emphasizing the serious implications of these practices.

The allegations suggest that Greystar and other property management firms engaged in discussions regarding pricing strategies, which undermined competition in the rental market. The release noted that RealPage’s software enabled landlords to align their prices uniformly based on insights into competitor pricing, effectively leaving renters with no alternative but to pay higher rents.

As part of the settlement, Greystar will pay $7 million in penalties and fees to the state and has committed to cooperating with ongoing legal actions against RealPage. The company also pledged to cease using any software that leverages competitively sensitive information to adjust rental prices.

Greystar manages several properties in Mountain View, including the Landsby, Revela, and Central Park at Whisman Station, among others. The company also oversees numerous properties in San Jose and along the Peninsula, impacting a wide range of renters in the region.

Bonta indicated that the “price alignment scheme” significantly affected multifamily housing in Southern California, raising concerns about the broader implications for renters across the state. While the Attorney General’s office refrained from confirming whether properties in Santa Clara and San Mateo counties were directly involved due to the ongoing nature of the lawsuit, the situation has garnered widespread attention from residents and advocacy groups.

In addition to its management operations, Greystar is an active real estate developer, currently planning to transform the historic Chase Bank site at the intersection of Castro Street and El Camino Real in Mountain View into a mixed-use residential complex.

This case highlights the growing scrutiny of rental practices in the United States and raises questions about the ethical responsibilities of property management firms in maintaining fair housing standards. As legal proceedings continue, the focus remains on ensuring transparency and fairness in the housing market.