Neighborhood in the News is usually a monthly feature, at most, and we just published one a week ago. But we didn’t think this news could wait.
In case you missed it, DC Attorney General Brian Schwalb is suing a real estate tech firm and 14 of the District’s largest apartment owners, accusing them of conspiring to fix rent prices. As the Washington City Paper reports: “He alleges that [RealPage] and 14 of its clients exchanged confidential pricing information to jack up rents for more than 50,000 apartments across the District, forcing tenants to pay millions more than they would’ve in a traditional real estate market.”
Writes The Washington Post: “The suit, filed in D.C. Superior Court, said landlords agreed to use RealPage’s centralized system, which suggests rental prices based on supply and demand, rather than compete against one another.”
And from DCist: “Landlords using RealPage’s software have allegedly advertised that it allows them to charge up to 20% more than they would otherwise, while RealPage itself represents that landlords can increase revenue by 2-7% by using its price-setting software. ”
The 14 landlords named in the suit include W.C. Smith (The Frontenac), AvalonBay (AVA and Avalon), Equity Residential (3003 Van Ness), Highmark Residential (Ellicott House) and Gables Residential (Yuma Gardens).
The case of the BK cars: We’ve been puzzling over this since we first spotted four Toyota Camrys with Florida plates behind the former Van Ness Burger King in May.
Overflow from the Avis car rental shop just down the alley? It did not seem so, as the cars never moved, and at least two of them developed flat tires in the interim.
The latest developments: Yellow impound stickers on the windshield, and by the time Popville wrote about them on November 2nd, the cars had been moved and a chain link fence erected around the drive thru area. A Popville reader says six cars in total were parked in the alley between ZIPS dry cleaners and the Flagship car wash. And though the November 2nd Popville post about the mystery yielded a number of comments, no one seems to know for sure why someone (or someones) left the vehicles there.
George says
Those mystery cars were towed out of the burger king lot, to be towed and scattered and illegally parked in the area of 35th Street and Albemarle streets. They now are getting flat tires and accumulating dirt and dust.
FHC says
We spotted one of them just this morning!
Eileen says
I looked up that first car (FL KRSX72) on DMV’s ticket website and it accumulated 9 speeding tickets between April and June 2022 and is eligible for impound/tow. Can’t make out the plates on the others,
George says
They are still in the vicinity of Albemarle and 35 th street parked illegally. The towing company moved them to the streets of the neighborhood.
Green Eyeshades says
Thank you very much to the Connection for giving prominent attention to the antitrust lawsuit against the big cheating, rent-gouging landlords in our neighborhood.
I quoted more of the details in DCist’s and the Washington Post’s stories last week in these two comments and a related shorter note:
https://www.foresthillsconnection.com/news/november-in-the-neighborhood-learn-something-new-plant-fall-blooms-weed-rock-creek-park-and-shop-small-and-local/#comment-708192
https://www.foresthillsconnection.com/news/november-in-the-neighborhood-learn-something-new-plant-fall-blooms-weed-rock-creek-park-and-shop-small-and-local/#comment-708193
Connection readers who want to see actual legal documents filed in this case can check out the docket sheet and DC Superior Court’s new “Portal” search engine, as I mentioned in this comment last Friday:
https://www.foresthillsconnection.com/news/november-in-the-neighborhood-learn-something-new-plant-fall-blooms-weed-rock-creek-park-and-shop-small-and-local/#comment-708220
Claire Ruppert says
WC Smith has never used RealPages at Frontenac or Clarence House.
Green Eyeshades says
The antitrust complaint filed by the District’s Attorney General does not directly allege that W.C. Smith used the collusive rent- fixing software at the two buildings you named. Similarly, the complaint does not allege that AvalonBay uses the collusive rent-fixing software at specific buildings in our neighborhood.
What the complaint may show, without actually writing the words, is that apartment buildings subject to rent control do not use the rent-fixing software. Those of us who live in rent-controlled buildings would understand immediately that District LAW controls the prices of rents in rent-controlled buildings. So the complaint probably only targets illegal price-fixing (rent-fixing) in newer buildings that are exempt from rent control.
Even so, the complaint expressly alleges that W.C. Smith does use the rent-fixing software at “for example,” two named buildings in the District.
The complaint alleges the following in paragraph sixteen:
“16. Defendant William C. Smith & Co., Inc. (‘W.C. Smith’) is a corporation headquartered in Washington, District of Columbia, organized and existing under the laws of the District of Columbia. W.C. Smith is a residential apartment manager and owner that relies on the RealPage RM Software as part of the process for determining the price of rental leases in the District of Columbia. W.C. Smith has used RealPage RM Software pursuant to contracts with RealPage including, among others, its June 16, 2016 RealPage One Master Agreement. W.C. Smith and its affiliates own and/or operate approximately 9,384 units in the District of Columbia, and during at least all or part of the past four years used RealPage RM Software at buildings in the District, including for example The Garrett located at 150 I Street SE, and Agora at the Collective located at 800 New Jersey Avenue SE.”
Paragraph twenty-one of the complaint alleges that AvalonBay uses the rent-fixing software at three specific buildings outside of our neighborhood, as follows:
“21. Defendant AvalonBay Communities, Inc. (‘AvalonBay’) is an equity real estate investment trust (‘REIT’) headquartered in Arlington, Virginia, organized and existing under the laws of Maryland. AvalonBay is a residential apartment manager and owner that relies on the RealPage RM Software as part of the process for determining the price of rental leases in the District of Columbia. AvalonBay and its affiliates own or operate approximately 2,602 units in the District of Columbia, and during at least all or part of the past four years used RealPage RM Software, including at buildings such as 770 5th Street NW, 55 M Street NE, and 1160 First Street NE. AvalonBay uses RealPage RM Software pursuant to contracts including, among others, a contract it entered into with The Rainmaker Group Real Estate, LLC in March 2017, and a contract with RealPage following RealPage’s acquisition of LRO in 2017.”
Paragraph one hundred eleven of the complaint alleges as follows:
“111. Defendants and other users of RealPage’s RM Software receive monthly reports detailing how much they have been able to increase rents as a result of adopting RM for pricing. For example, W.C. Smith’s monthly report for October 2022 highlights that the company has increased revenues per unit 4.6-4.7% and was able to increase revenues and rents despite occupancy levels decreasing.”
These are the allegations in paragraph thirty-one of the complaint:
“31. RealPage markets three revenue management products: YieldStar, LRO, and AIRM. The products are functionally identical in that they automate pricing of multifamily units using algorithms fueled by RealPage’s vast data repositories which are shared among the three products. … Stated simply, these products employ statistical models that use data—including proprietary, non-public data—to estimate supply and demand for multifamily housing that is specific to particular geographic areas and unit types, and then generate a ‘price’ to charge for renting those units that maximizes the landlord’s revenue.”
The last sentence of paragraph 32 of the complaint alleges as follows:
“32. … The Defendant Landlords who have used LRO include at least AvalonBay, Bell Partners, Bozzuto, Equity, Gables, Greystar, JBG Smith, Paradigm, and WC Smith.”
Paragraph ninety-two of the complaint includes these allegations:
“92. In addition to the conferences hosted by RealPage itself, Defendant Landlords communicate at numerous other industry conferences and through digital channels which provide ample opportunities to confer. Examples include:
“The OPTECH Conference held by the National Multifamily Housing Council (‘NMHC’) and sponsored by corporations including RealPage. For example, the 2020 OPTECH Conference was sponsored by RealPage, and included multiple sessions dedicated to revenue management, including one specifically on RealPage’s AI Revenue Management …. Other conference participants included representatives from Defendants AvalonBay (including at least Senior Vice President for Strategic Initiatives Karen Hollinger) … [and] W.C. Smith (including at least Vice President of Marketing Holli Beckman) ….
“Included among the attendees of the 2021 OPTECH Conference were representatives from Defendants RealPage … [and] AvalonBay (including at least Karen Hollinger) …. The 2022 OPTECH Conference was attended by representatives from, at least, Defendants RealPage … AvalonBay (including, among others, Vice President of Data Analytics Kevin Geraghty, who presented on ‘turning [data] into business intelligence’) … [and] W.C. Smith (including at least Holly Beckman) ….”
Green Eyeshades says
Just in time for the holidays, Washington City Paper published an amazing report of an investigation by a tenant in a rent-controlled building:
https://washingtoncitypaper.com/article/638913/how-some-landlords-skirt-d-c-s-rent-control-law/
The author, who describes herself as “an attorney with experience in consumer protection,” included this note: “(In the interest of full disclosure, I’m currently in litigation with my landlord alleging violations of rent control and fair housing laws.)” The author described her own tour through the thicket of complicated rules & regulations which are supposed to control rents in DC. Along the way, focusing only on smaller buildings with a few dozen units or less, the author discovered brazen violations and evasions of rent-control laws which the Department of Housing and Community Development (DHCD) and other DC government agencies are doing nothing to prevent.
The smaller landlords covered in City Paper’s story didn’t join blatant conspiracies with other landlords to fix rent prices. Instead, the author’s investigation discovered “the role that real estate agents and investors can play in evading D.C.’s rent control law (officially called ‘rent stabilization’), due in part to a lack of enforcement from the DHCD’s Rental Accommodations Division. (DHCD representatives did not respond to multiple requests for comment.)” [snip] “After almost two years of research, including discussions with hundreds of tenants in D.C., it appears that my landlord’s behavior is not uncommon.” [snip]
“I learned that DHCD maintains a public database containing rent-control histories for D.C. rental units, called FileNet, and what started as a simple search became a trip down a rent-control rabbit hole.
“This is what I found:
“Some D.C. landlords do not register rent-controlled units with DHCD as the law requires, nor do they tell tenants that the units are rent controlled. Without that disclosure, those landlords then go on to charge much higher, illegal rates without tenants’ knowledge.
“Tenants have a three-year window to challenge unlawfully high rents. The clock starts when tenants begin paying the increased rate. If they don’t object via a tenant petition to DHCD within three years, the high rental rate is almost always set in stone for the current tenants and future tenants as well.
“Some landlords seek to remove existing tenants, then add more bedrooms to the vacated units to justify charging more rent. Newly constructed units are exempt from rent control, and the landlord can set the new rate. But some landlords are adding additional bedrooms to existing units and raising the rents on those “reconfigured” units even though the square footage remains the same. And though DHCD must approve a rent increase based on renovations or capital improvements, some landlords have simply reported new, much higher rents without any review by DHCD.
“Some landlords are exploiting an exemption to the rent-control law for voucher holders. Landlords are allowed to charge voucher holders market rate for rent-controlled units. If that tenant moves out, the unit is supposed to return to its rent-controlled status, but landlords often continue advertising and charging the higher, market rate.
“Some landlords list long-term rental units on sites such as Airbnb and lease them for rates that are higher than the rates registered with DHCD. In some cases, tenants have overpaid by as much as twice the registered rent.
“The task of preserving D.C.’s rent-controlled housing falls to tenants, who must be willing to take their landlords to court and have the resources to do it. That’s because the two government agencies responsible for enforcing housing and business regulations, DHCD and the Department of Licensing and Consumer Protection, have largely failed when it comes to rent-controlled housing.”
Green Eyeshades says
Poor tenants in DC are entitled to safe and secure housing under the Rapid Rehousing program.
But useless DC government agencies are abandoning those tenants in garbage heap buildings where greedy landlords rack up hundreds of thousands of dollars in fines while doing nothing to repair their buildings, resulting in almost zero remedies from the DC government:
https://www.washingtonpost.com/dc-md-va/2023/11/24/housing-fire-families-displaced-living-poor-conditions/