A group of Massachusetts legislators on Wednesday sent letters to 13 of the state’s largest apartment owners questioning their use of a software that allegedly helps landlords inflate rents at their properties.
The letters come in the wake of a sprawling antitrust lawsuit filed by the Department of Justice this month against the company RealPage over software it developed that gathers competitively sensitive leasing data from the landlords of millions of units to algorithmically suggest rental prices. The software, the lawsuit alleges, is “aimed at maximizing prices for landlords.”
While the lawsuit plays out, Senators Elizabeth Warren and Edward Markey, and US Representative Seth Moulton, are shifting attention to the companies that have allegedly used the software to help suggest rent prices, including firms that develop and own thousands of apartments in Massachusetts.
Greystar, for example, is one of the top apartment owners in the United States and manages upscale apartment buildings on Revere Beach and in Boston’s Seaport that fetch some of the highest rents in the state. Avalon Bay, another national company that received a letter Wednesday, owns 35 residential properties in Massachusetts.
The letters — signed by Warren, Markey, and Moulton — seek information from the companies on their use of the RealPage software, and whether or not it has been used to drive rental prices in Massachusetts.
“Massachusetts is in the midst of a housing affordability crisis; rents in the Commonwealth are currently the highest in the country,” the letters read. “In the midst of this crisis, we are extraordinarily concerned that corporate landlords are taking advantage of renters in Massachusetts, gouging them with illegal price-fixing schemes.”
The other companies that own apartments in Massachusetts that received letters Wednesday are Bozzuto Group, Equity Residential, UDR, Bell Partners, AIR Communities, Related Companies, Gables Residential, Cushman and Wakefield, Brookfield Properties, Lincoln Property, and WinnResidential, the property management arm of Massachusetts-based WinnCompanies.
A spokesperson for Winn, one of the state’s top producers and owners of subsidized housing, said earlier this month that Winn no longer uses the software and rejected claims made in a class action lawsuit filed by a group of tenants against RealPage and companies that allegedly used the software.
“It is important to remember that ... 90 percent of the apartments that WinnResidential manages are income-restricted or rent-restricted, meaning that rents are set based on household income and thresholds established annually by the government.”
RealPage has defended its software as legal, and each of the apartment owners named in lawsuits over the software have disputed the allegations of inflating prices. In a statement posted to its website, RealPage called the allegations in the DOJ and class action lawsuits false, saying its customers are free to set their own rent prices and that its software does not inflate rents.
Warren and other legislators have been investigating RealPage since the publication of an investigation by ProPublica in 2022 that unearthed the use of the software. They have said the algorithm has been used to determine prices for more than 4 million units nationwide and relies on information from more than 13 million units. By gathering pricing information from competing landlords, the algorithm determines the maximum rent prices the market can tolerate, and ProPublica reported that executives at RealPage have boasted that the software has driven double-digit price increases in some rental markets.
“RealPage’s software tends to maximize price increases, minimize price decreases, and maximize landlords’ pricing power,” the DOJ said in a news release earlier this month.
Warren, who has long decried corporate landlords as harmful to everyday renters, said Wednesday that cracking down on tactics that inflate rent prices is key to solving the broader housing crisis.
“In the housing crisis, people are caught every which way,” Warren said. “There’s not enough supply. Private equity is scooping up properties right and left. And the corporate landlords are gouging renters. All these problems compound each other and leave Massachusetts families holding the short end of the stick.”
Andrew Brinker can be reached at andrew.brinker@globe.com. Follow him @andrewnbrinker.