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Arizona AG targets alleged apartment rental price fixing scheme in Phoenix, Tucson

Arizona Attorney General Kris Mayes filed a lawsuit accusing the RealPage real estate software company of illegally colluding with nine large apartment owners to raise rents in Phoenix and Tucson.

The lawsuit alleged that RealPage’s revenue management software collected proprietary pricing data from multiple apartment owners and used it to coordinate rental prices among those same owners. 

“What could be more unfair and deceptive than landlords that were pumping information that should have been proprietary into a single entity into a single set of software and then allowing that software to come up with the highest price possible?” Mayes said.

Mayes said apartments using RealPage rent for prices that are over 10%  higher than comparable units, on average, according to analysis performed by outside counsel working on the case. 

The lawsuit claimed apartments using the software make up 70% of apartments in Phoenix and 50% of the supply in Tucson.

Mayes alleged the conspiracy contributed to Arizona’s housing crisis.

“While there are many reasons that the cost to rent an apartment has increased exponentially year over year, we now know that that question has been answered, at least in large part,” Mayes said.

A RealPage spokeswoman denied the allegations. 

“The complaint is based on a fundamental misunderstanding of how revenue management software works and the significant benefits that it offers for residents, property managers, and the rental housing ecosystem as a whole,” Jennifer Bowcock said in a statement. “The software recommends rates in all directions — oftentimes recommending rent reductions.”

Bowcock said RealPage only makes recommendations and apartment owners retain control over the rents they offer.

“RealPage’s revenue management software is purposely designed and built to be legally compliant, and we will vigorously defend against this lawsuit,” Bowcock said.

But Mayes alleged that since 2016, RealPage actively set prices for customers and “the leasing companies were taught by real page to lie and to say that units were priced individually.”

Mayes is seeking a court order to stop the practices alleged in the lawsuit and damages for affected renters. 

The lawsuit names RealPage and nine large apartment owners in Phoenix: Apartment Management Consultants, Avenue5 Residential, BH Management Services, Camden Property Trust, Crow Residential Company, Greystar, HSL Properties, RPM Living, and Weidner Property Management.

In a statement, Apartment Management Consultants denied the allegations. The company said only one of the 85 properties it manages in Arizona uses RealPage’s revenue management software.

The other companies named in the lawsuit did not respond to a request for comment.

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Wayne Schutsky is a broadcast field correspondent covering Arizona politics on KJZZ. He has over a decade of experience as a journalist reporting on local communities in Arizona and the state Capitol.