DENVER (AP) — The U.S. Justice Department has initiated a lawsuit against several large landlords, alleging that they coordinated efforts to maintain high rental prices by utilizing algorithms and sharing sensitive competitive information with one another. This legal action surfaces at a time when U.S. renters are grappling with a harsh housing landscape, characterized by soaring rental costs that have outpaced wage growth.

Current statistics reveal that about half of American renters allocated more than 30% of their income to rent and utilities in 2022, marking a historic peak. Such financial strains lead to challenging daily choices between essentials like medication, food, and housing. The implications are severe, with approximately 1.5 million evictions occurring annually as reported by Princeton University’s Eviction Lab, where children face disproportionate eviction rates.

The Department's lawsuit, supported by 10 states including North Carolina, Tennessee, Colorado, and California, targets six landlords who collectively operate over 1.3 million units across 43 states and the District of Columbia. These entities are accused of conspiring to prevent rent reductions, further entrenching the crisis.

One of the implicated landlords, Greystar Real Estate Partners LLC, has so far refrained from commenting extensively, but they released a statement asserting that they conduct their business with integrity and will defend themselves vigorously against the claims.

The lawsuit alleges that these landlords exchanged critical data regarding rental prices and occupancy levels through various communication methods, including calls and emails. Information shared purportedly comprised renewal rates, algorithm recommendations, and strategies for upcoming pricing.

Doha Mekki, the acting assistant attorney general for the department’s antitrust division, remarked, "Today’s action against RealPage and six major landlords seeks to end their practice of putting profits over people and make housing more affordable for millions of people across the country."

RealPage, which operates an algorithm that provides rental pricing advice, is also facing scrutiny under this lawsuit. Prosecutors argue that the software’s use of sensitive competitive information magnifies the alignment of landlords' pricing strategies, stifling competition that might otherwise lead to reduced rent costs. In defense, Jennifer Bowcock, RealPage’s senior vice president for communications, stated that their software is employed in less than 10% of rental units across the country, with its pricing recommendations utilized fewer than half the time. She added, "It’s past time to stop scapegoating RealPage—and now our customers—for housing affordability problems when the root cause of high housing costs is the under-supply of housing."

As the housing crisis continues to affect countless families and individuals, this lawsuit could mark a pivotal change in practices among large landlords, aimed at creating fairer pricing strategies for American renters.