Price-fixing conspiracy artificially jacked up apartment rent prices in Phoenix and Tucson, Arizona AG says

Arizona Attorney General Kris Mayes is claiming a widespread price-fixing conspiracy artificially jacked up apartment rent prices in Phoenix and Tucson, forcing thousands of families to pay more than what they should have.

"Why is the rent here so damn high?" Mayes said during her announcement of a new lawsuit on Feb. 28.

It's a question Mayes says is on the mind of millions of Arizonans as Phoenix saw a 76% increase in rent prices since 2016. She believes her office knows part of the answer.

"This happened, in large part, we believe, because of this conspiracy that stifled fair competition, and essentially established a rental monopoly in our states’ two largest metro areas," she said.

In a new lawsuit, Mayes is accusing some of the largest residential realty groups of conspiring with software company RealPage in a move she claims kept rents artificially high across Phoenix and Tucson.

The landlords named in the lawsuit:

  • Apartment Management Consultants, L.L.C.
  • Avenue5 Residential, L.L.C.
  • BH Management Services, L.L.C.
  • Camden Property Trust
  • Crow Holdings, L.P./Trammell Crow Residential
  • Greystar Management Services, L.P.
  • HSL Properties, Inc.
  • RPM Living, L.L.C.
  • Weidner Property Management, L.L.C.

According to Mayes, RealPage offers "revenue management" to its clients listed in the lawsuit.

Mayes claimed clients reportedly handed over data they would normally never share with competitors, like occupancy and prices, to RealPage.

The lawsuit says RealPage would compile that information into an algorithm that would spit out a price.

"Leasing companies were taught by RealPage to lie and to say that units were priced individually," Mayes said. "In reality, rates were set by Real Page."

The lawsuit alleges that RealPage would direct clients not to deviate from that set price.

Mayes claims RealPage kept this hidden from the public by training leasing companies not to mention the company’s name or pricing algorithms when explaining price increases to tenants.

This way, Mayes said, everyone conspired to keep prices and profits high and interfered with marketplace competition, which is in violation of the Arizona State Antitrust Act and the Arizona Consumer Fraud Act.

"This conspiracy violated Arizona law and it harmed Arizonans," Mayes said.

An Arizona resident named Matthew said he rents from a group mentioned in the lawsuit.

"It’s never good to find out things that are happening below the surface when you assume it’s all a fair market," he said.

In a statement to FOX 10, Jennifer Bowcock with RealPage said, "Repeating the inaccuracies of predecessor cases, this copycat lawsuit is wrong on both the facts and the law. 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. The software recommends rates in all directions–oftentimes recommending rent reductions. Our customers retain 100% control over the rents they offer, and they accept, reject, or modify the software’s recommendations at widely varying rates. RealPage’s revenue management software is purposely designed and built to be legally compliant, and we will vigorously defend against this lawsuit."

Mayes says her goal is to get some kind of restitution for renters.

This lawsuit also mirrors a similar one filed in the District of Columbia. She believes this is not just an Arizona problem, but a national one.