In May, the FBI executed a search warrant at the Atlanta offices of a major property management company as part of a two-year-old investigation into allegations of collusion and price-fixing among the owners of apartment buildings in several states.

The antitrust investigation stems from the use of RealPage rent-setting software that collects and analyzes data and helps landlords calculate what to charge their tenants in specific markets.

The Department of Justice is looking into whether RealPage’s clients used the software to artificially inflate rents, according to Politico.

Major users of the software have properties in several metropolitan areas, including Baltimore and the surrounding counties.

Federal and state authorities would neither confirm nor deny the existence of either a criminal or civil investigation in Maryland, but the Attorney General’s office says it is looking into “concerns” about RealPage.

“Within the last two years, we have heard concerns from renters and others about this company,” said Aleithea Warmack, the spokesperson for Attorney General Anthony Brown, “and, more generally, about whether landlords are using software services to share non-public, aggregated rent data and raising rents in ways that may violate Maryland’s antitrust laws. We intend to explore this fully and will take steps to protect Marylanders if needed. We cannot discuss or provide details on matters that are under review.”

News reports at the time of the FBI search of Cortland Management in Atlanta noted that the federal investigation could reach several cities, including Baltimore.

RealPage is already the subject of a price-fixing lawsuit 40 miles to our south. In November, the Attorney General for the District of Columbia sued the company, alleging that RealPage and 14 large landlords “participated in a centralized, anti-competitive scheme, causing District residents to pay millions of dollars above fair market prices.” The AG, Brian Schwalb, said the practices of RealPage and its clients “amounts to a District-wide housing cartel.”

The lawsuit said that about 60% of D.C. apartments in large multifamily buildings are priced using RealPage’s software. In the Washington-Arlington-Alexandria metropolitan area, more than 90% of units in large buildings are priced using RealPage’s software.

“This leaves many District residents with no choice but to pay RealPage’s inflated rents,” the AG’s office said.

RealPage has repeatedly denied wrongdoing and claims its software is programmed specifically to avoid collusion.

In a statement issued last month, in response to news reports and lawsuits, RealPage said its customers “decide their own rent prices [and] always have 100% discretion to accept or reject software price recommendations.”

The company said its software “serves a much smaller portion of the rental market than has been falsely alleged.”

In certain markets, however, its presence is common and even widespread. In the Atlanta market, for instance, more than half of the owners and managers of multifamily rental units subscribe to RealPage services, according to the Atlanta Journal Constitution.

A ProPublica investigation, published in 2022, found that RealPage wields tremendous influence over apartment prices, with more than 31,000 customers using its real estate tech services.

From the ProPublica report: “To arrive at a recommended rent, the software deploys an algorithm — a set of mathematical rules — to analyze a trove of data RealPage gathers from clients, including private information on what nearby competitors charge. For tenants, the system upends the practice of negotiating with apartment building staff.”

A Maryland-based property manager told me that RealPage is “just one element” of rent-setting and that leasing agents have discretion to consider other factors. But ProPublica found that the company generally discourages landlords from bargaining with renters to maximize profits and, in some cases, “accept a lower occupancy rate in order to raise rents and make more money.”

One of the software’s developers told ProPublica that leasing agents had “too much empathy” compared to computer-generated pricing.

(I’ll pause here so you can laugh at that last sentence – and shudder at the prospect of what life with AI will be like.)

Increases in rent, along with food prices, are considered major drivers of inflation since the pandemic. The tight housing market has also contributed to rent increases as the prices of houses and interest rates have kept first-time homebuyers in rental units. So, sorting out the effect of those factors on rent from the allegedly collusive conduct of corporations must certainly be a challenge for investigators. But that’s apparently what has been underway since 2022.

In March, during his State of Union address, President Biden referred to the practices under investigation. “For millions of renters, we’re cracking down on big landlords who … break antitrust laws by price-fixing and driving up rents,” he said.

Of course, it remains to be seen if laws were broken. But at least there’s an effort to look into the possibility.

By contrast, it’s hard to imagine Biden’s opponent in the current presidential campaign approving of an antitrust investigation of any kind, much less pledging to have the DOJ conduct one of the apartment rental industry. Rulings of the Supreme Court session that just ended make government regulation of pricing practices seem even less likely. Still, for the time being, RealPage remains under scrutiny and facing legal challenges.

In addition to the D.C. lawsuit, the company and some clients are defendants in other civil actions that make price-fixing claims. In a consolidated case in Tennessee, two companies that own and operate multifamily properties already have agreed to settle claims they artificially inflated rental prices using RealPage software.