PHOENIX — Representative Ruben Gallego has sent a letter to the Federal Trade Commission urging them to investigate alleged rental market price fixing by landlords and the software company RealPage.
Arizona Attorney General Kris Mayes announced in February that her office is suing software company RealPage along with multiple landlords over what her office calls an "illegal price-fixing conspiracy."
There are nine major Phoenix and Tucson area landlords named as defendants in the suit, including Apartment Management Consultants (AMC), Greystar Management Services, and HSL Properties.
“The conspiracy allegedly engaged in by RealPage and these landlords has harmed Arizonans and directly contributed to Arizona’s affordable housing crisis,” said Attorney General Mayes. “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."
The AG's lawsuit accuses the companies of illegally colluding to artificially raise rents and conceal their conspiracy from the public. It also accuses the companies of violating the Arizona Uniform State Antitrust Act and the Arizona Consumer Fraud act, along with costing Phoenix and Tucson-area residents millions of dollars more in rent.
Gallego sent a letter Thursday to the FTC urging them to investigate the alleged anticompetitive practices" by RealPage. In a release sent to ABC15, Gallego's office states that RealPage's clients account for 90% of the U.S. multifamily housing market. It uses data to generate a price for renting units to maximize a landlord's revenue.
“While apartment managers can reject the software’s suggested prices, close to 90% of pricing recommendations are adopted. RealPage also hosts working groups that include landlords that would otherwise be rivals,” Rep. Gallego writes. “The resulting coordinated rent increases on the majority of available rental properties potentially amounts toprice-fixing, with working Arizonans and
families the hardest hit.”
Gallego says the FTC has the authority to pursue enforcement against companies that "engage in anticompetitive practices that harm consumers.
