Arizona AG accuses landlords of illegally conspiring to raise rents in Phoenix, Tucson areas

PHOENIX – Arizona’s top legal officer is accusing multiple apartment companies of conspiring to raise rents on hundreds of thousands of residents in the Phoenix and Tucson areas.

Attorney General Kris Mayes filed a lawsuit Wednesday alleging that nine landlords and a software company colluded to fix rent prices in the state’s two largest metropolitan regions since at least 2016, contributing to Arizona’s affordable housing crisis.

“Renters have paid millions more for rent than they otherwise would have but for defendants’ misconduct,” the complaint filed in Maricopa County Superior Court says.

The state, which wants the case to be heard by a jury, is seeking to stop the allegedly illegal practices and obtain an unspecified amount of restitution and civil penalties.

The conspiracy allegedly engaged in by RealPage and landlords harmed Arizonans and directly contributed to Arizona’s affordable housing crisis. They stifled fair competition and established a rental monopoly in our state’s two largest metro areas. https://t.co/3RgdF81rUG pic.twitter.com/sATLk3KGop

— AZ Attorney General Kris Mayes (@AZAGMayes) February 28, 2024

The companies “must be held accountable for their role in the astronomical rent increases forced on Arizonans,” Mayes said in a press release.

How did Arizona landlords allegedly use software to illegally raise rents?

The lawsuit accuses RealPage of offering a revenue management program that allowed its clients to collude on pricing. The software company is named as a co-defendant along with residential rental companies Apartment Management Consultants, Avenue5 Residential, BH Management Services, Camden Property Trust, Crow Holdings/Trammell Crow Residential, Greystar Management Services, HSL Properties, RPM Living and Weidner Property Management.

The RealPage software provides clients with detailed leasing data that the landlords allegedly used to artificially raise rents in violation of Arizona’s antitrust laws.

“Ordinarily, competitors do not agree to share detailed, sensitive, competitive information with one another. But to join RealPage, lessors must agree to depart from normal behavior when competing with each other and provide RealPage with their ‘realtime lease-transaction data.’ This data is non-public, ‘extremely targeted,’ and ‘as fine as granular bits of sand,’” the lawsuit says.

How vast is alleged price-fixing conspiracy in Phoenix and Tucson?

Companies that contracted for RealPage’s revenue management service owned, operated or managed 70% of the multifamily apartments listed in metro Phoenix and half of the units in the Tucson area, according to the lawsuit.

“The conspiracy allegedly engaged in by RealPage and these landlords has harmed Arizonans and directly contributed to Arizona’s affordable housing crisis,” Mayes said in a press release.

“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.”

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