DC Landlord Settles With AG Over Price-Fixing Accusations

The onslaught of lawsuits and litigation revolving around rent-setting software is bringing a slow drip of resolutions as cases play out across the country.

This week, D.C. Attorney General Brian Schwalb announced a settlement with landlord W.C. Smith, which owns more than 9,000 multifamily units in the metropolitan area. The settlement came out of a larger lawsuit filed by the AG’s office almost two years ago, the first settlement to stem from the case.

W.C. Smith allegedly used RealPage revenue management software to set rent at its buildings, allegedly coordinating with other landlords to share non-public data. The lawsuit alleged that the landlord engaged in anticompetitive practices and delegated rent-setting responsibilities to RealPage.

Under the settlement, the landlord will pay more than $1 million in civil penalties and money for impacted tenants. W.C. Smith is also prohibited from using revenue management software that leans on private data from other companies and is expected not to encourage others to use such products.

“Rents in DC are already sky-high, and amidst this housing affordability crisis, many of the District’s top landlords operated as a housing cartel—illegally colluding to push rents even higher,” the attorney general said in a statement. “I commend W.C. Smith for putting an end to its anticompetitive practices and cooperating with my office to reach this agreement.”

In a statement to Bisnow, W.C. Smith’s president said the company “consistently asserted that we did not participate in any of the activities alleged by the Office of Attorney General in the RealPage litigation,” adding that the landlord did not accept liability in the case, but settled to avoid “unnecessary legal expenses.”

The landlord’s resident portfolio in the district sports a $1.7 billion value, according to the company. W.C. Smith completed 15 projects between 2020 and 2024, according to the Washington D.C. Economic Partnership, making it the district’s second-most active developer.

Algorithmic rent-setting has been under threat in municipalities across the country.

Scrutiny towards RealPage software rose after an October 2022 report by ProPublica, detailing how rents were surging faster in markets where the software was prevalent; the story suggested the software allowed landlords to know what competitors were charging and to raise rents in tandem.

RealPage and rival Yardi Systems denied allegations regarding their software. Supporters argue the algorithms recommend prices that help landlords maximize revenue by keeping units rented, rather than vacant for long stretches.

The Department of Justice under President Joe Biden brought a civil case in the matter, though it closed an antitrust investigation last year.

Just last month, the City Council in Jersey City voted unanimously to ban apartment owners from using algorithmic products like RealPage.