ATTORNEY GENERAL PLATKIN SUES NEW JERSEY ‘CARTEL’

Ten of the state’s largest corporate landlords charged with price fixing

Matt Platkin, at an appearance at Montclair State University in March

On March 6, The New Jersey Democrat wrote an expose of RealPage and its role in rigging rents for landlords, jacking up rents in a cartel-like operation that is now, as of yesterday, the subject of a bombshell lawsuit filed by Matt Platkin, New Jersey’s attorney general. Here’s what we wrote last month:

At the Democratic gubernatorial candidates debate at Rider University [in February] Newark Mayor Ras Baraka said Wall Street firms like Black Rock and Blackstone were “driving prices up on the market, making it hard to buy housing and driving up homelessness 24 percent.”

Many of these corporate owners are setting rents using sophisticated computer systems and policies operated by a company called RealPage. In early January, in the final days of the Biden Administration, the Justice Department and ten state attorneys general filed an antitrust lawsuit against six large corporate real estate landlords and RealPage, charging them with price fixing, setting rates way above what a competitive market would allow. In New Jersey, RealPage is also the target of state legislators, local government officials and candidates, as well as tenant groups, largely centered around Jersey City.

At last night’s gubernatorial candidates’ debate in Maplewood, Steve Fulop, the mayor of Jersey City, also slammed “the algorithm” that RealPage uses.

Read on.

Accusing ten of New Jersey’s largest corporate landlords of operating as a “cartel” Attorney General Matt Platkin sued them yesterday, along with a property management software company, RealPage, for illegally fixing the prices tenants pay for rent. The lawsuit charged that “New Jersey residents have been victimized by an illegal conspiracy between some of the largest landlords in the State.”

Rather than allowing market competition to determine rents, the lawsuit said the landlords

have unlawfully agreed to not compete with one another, and instead price their apartments using RealPage’s software. As a result, instead of lowering rents to fill vacancies, Defendant Landlords hold rents high—knowing their competitors will not undercut them.

The landlords cited by Platkin own tens of thousands of properties in the state and the lawsuit said hundreds of thousands of renters in New Jersey have been harmed.

Platkin, the best approximation of a crusader that New Jersey has, is developing a reputation as a fierce progressive fighter for social and economic justice, as well as taking on President Trump in a flurry of lawsuits alongside other state attorneys general. And, as TNJD wrote this week, he’s renewed his legal attack on South Jersey’s “criminal enterprise”-running boss, George Norcross. (And see TNJD’s piece on Platkin, too.)

As The New Jersey Democrat wrote back in March, tenant groups and city council members from Jersey City, along with state legislators have already been fighting the landlords using this computer scheme. Their actions in turn were sparked by a ProPublica expose in 2022 that detailed how the software company and landlords closely coordinated, sharing both their information and activities, to inflate rents.

Specifically named in the lawsuit, along with the Texas-based RealPage, were: Morgan Properties Management Company LLC; AvalonBay Communities, Inc.; Kamson Corp.; LeFrak Estates, L.P. and its subsidiary, Realty Operations Group LLC; Greystar Management Services, LLC; Aion Management LLC; Cammeby’s Management Co. of New Jersey L.P.; Veris Residential, Inc.; Russo Property Management, LLC ; and Bozzuto Management Company.

There are likely many other companies involved as well, since RealPage is the predominant computer price setting software firm in the industry. The Attorney General indicated that the investigation is continuing and other landlords may be added to the lawsuit.

Three months ago in January, just before the Biden Administration closed up shop, the Justice Department and ten state attorneys general filed an antitrust lawsuit against six large corporate real estate landlords and RealPage, charging them with price fixing. Nationally, over 30 lawsuits have been filed against RealPage and various landlords and are now consolidated in a class action lawsuit in Tennessee

In Jersey City, tenants at the huge 527-unit Portside Towers complex have been fighting the buildings’ corporate owner, Equity Residential, for several years, arguing it has been illegally ignoring rent control laws. Equity Residential is the fifth largest publicly traded real estate company, and its stock is owned by a plethora of Wall Street investment giants such as Black Rock and State Street. Tenants have held demonstrations, filled city council hearings, filed a lawsuit.

Pressed by this angry wave of tenant protests, the Jersey City Council joined the fight against RealPage. This past June, Councilman James Solomon, now running for mayor of Jersey City, along with the local service employees’ union, SEIU-32BJ, introduced a city council resolution urging the state legislature to ban rent-setting computer programs. The council voted 7 to 0 in support of the measure.

But legislation prohibiting landlords from colluding on rents using rent setting software has languished in the state legislature since it was introduced in September by the Deputy Speaker Yvonne Lopez (D-Middlesex). The bill, A4872, advanced out of the Assembly Housing Committee in October after a packed hearing of angry Jersey City residents testified. But the Appropriations Committee has not moved the bill. The question is whether the Attorney General’s lawsuit gives legislators the spine they need to buck the powerful real estate developer lobby to move the bill.