Saturday, July 20, 2024

Landlords Used Software to Set Rents. Then Came the Lawsuits. (NY Times)

Landlords' possible civil and criminal violations of our federal antitrust laws must be exposed and remedied.   "Affordable housing" is a bad joke, and an illusory one when landlords collude.  

Not word of response from our incurious, passive, corporate-funded St. Johns County Commissioners whenever I've raised this issue.  

Wonder why?  As JFK's friend, the late great economist and Ambassador to India John Kenneth Galbraith, said it best, "the [free} market is a snare and a delusion."

Landlords Used Software to Set Rents. Then Came the Lawsuits.

Antitrust cases contend that use of RealPage’s algorithm, which lets property owners share private data, amounts to collusion.

The exterior of an apartment building with a sign proclaiming, “Live inside the life you want.”
A residential development in Denver. Customers of RealPage have publicly attributed revenue increases to its software.Credit...Andrew Miller for The New York Times

Imagine a system that lets big landlords in your city work together to raise rents, using detailed, otherwise-private information about what their competitors are charging.

Such a system is already underway, according to a series of lawsuits filed by tenants and prosecutors across the country. The plaintiffs argue that real estate software from a company called RealPage is being used by apartment owners to increase rents.

Through the Texas-based company’s YieldStar product, plaintiffs say, landlords share rental pricing data and occupancy rates — information the company funnels through algorithms to spit out a suggestion for what landlords should charge renters. Those figures are often higher than they would be in a competitive market.

In a vast majority of cases, landlords adopt the suggested prices, passing the costs on to tenants, the plaintiffs assert. RealPage, owned by the private equity firm Thoma Bravo, advertises its software to landlords as a tool that can help them outperform the market by 3 to 7 percent.

RealPage has denied that it facilitates collusion through its software. In a statement on its website in June, the company blamed “a host of complex economic and political forces,” including an undersupply of rental housing units, for rent increases nationwide.

A company spokeswoman, Jennifer Bowcock, said by email that the lawsuits were based on a fundamental misunderstanding of how revenue management software works. The software often recommends rent reductions, she added.

The use of the RealPage software in setting rents was the subject of a ProPublica investigation in 2022. Antitrust experts say the allegations in the lawsuits, if substantiated, paint a clear-cut picture of violations of federal antitrust law, which prohibits agreements among competitors to fix prices.

“There’s an emerging view that these exchanges of confidential business information raise significant competitive concerns,” said Peter Carstensen, an emeritus professor at the University of Wisconsin focused on antitrust law and competition policy. The use of algorithmic software, he added, “speeds up the coordination and makes it possible to coordinate many more players with really good information.”

The legal skirmishes are arising after a period in which rent increases have been a driver of unusually strong inflation. Annual rent growth nationally peaked at nearly 16 percent in early 2022, according to data from Zillow.

The pressure on RealPage began in late 2022 with lawsuits on behalf of tenants in cities including Seattle, Albuquerque and Austin, Texas, seeking class-action status. Then Attorney General Brian Schwalb of the District of Columbia sued the company and 14 of the largest landlords in the district, the first such lawsuit by a public agency.

The Justice Department has not taken legal action against the company. But its antitrust division filed a brief in November in support of the renters’ case. That brief underscored federal agencies’ interest in the issue, and their position that using an algorithm to fix prices is unlawful.

Property owners and managers subscribe to RealPage’s software “with the explicit and common goal of increasing rents,” renters’ attorneys contend in a lawsuit in federal court in Tennessee, where several cases were consolidated last year. RealPage, they contend, effectively enforces compliance with the software’s recommended prices, requiring approval to diverge from the suggested price.

One leasing manager cited in the litigation reported that when her property started using RealPage in 2021, rents for the building’s standard two-bedroom units were raised about 27 percent, without any improvements. That is well above average annual rent increases in metropolitan areas, which are typically in the single digits.

RealPage’s customers have publicly attributed revenue increases to its software. According to RealPage’s website, the former chief executive of the Texas-based property management company Pinnacle said his firm’s revenue rose by 4 percent at the height of a recession in 2009.

“The tool, frankly, really helped us fight through that, not just as a company but as an industry,” Rick Graf, the Pinnacle executive, said in the video on the site. A spokesman for Pinnacle’s parent company declined to comment.

The District of Columbia lawsuit, filed in November, pulled back the curtain on the ubiquitous nature of RealPage’s software: In the district, about 60 percent of units in large buildings are priced using it, the complaint states. That figure jumps to 90 percent in the broader Washington metropolitan area.

“It’s a housing cartel, and that housing cartel is resulting in already high market rents in our city being even higher,” Mr. Schwalb, the district’s attorney general, said in an interview.

Among the landlords sued by Mr. Schwalb’s office was Greystar, the largest apartment owner in the United States, according to data from the National Multifamily Housing Council.

Greystar did not respond to a request for comment.

After the District of Columbia filed its lawsuit, Attorney General Kris Mayes of Arizona did likewise in February, accusing RealPage and nine landlords of illegally conspiring to raise rents for hundreds of thousands of renters in the Phoenix and Tucson areas. In March, Attorney General Josh Stein of North Carolina began an antitrust investigation into RealPage.

And the Justice Department, beyond its brief in the tenants’ litigation, has signaled broader scrutiny of big landlords. In May, the Federal Bureau of Investigation executed a limited search warrant at the Atlanta headquarters of the real estate management firm Cortland in connection with a Justice Department investigation into potential antitrust violations in the multifamily housing industry.

“We are cooperating fully with that investigation, and we understand that neither Cortland nor any of our employees are ‘targets’ of that investigation,” the company said. Cortland is a defendant in the tenants’ litigation, but it is unclear how the RealPage software is factoring into the federal inquiry, if at all.

A Justice Department representative declined to comment.

The government has a legal advantage over private attorneys in that it can use civil investigative demands to “pop open the hood” of RealPage’s software, analyzing how its algorithm works before going to court, said Sandeep Vaheesan, legal director at the Open Markets Institute, a research and advocacy group focused on antitrust issues.

Ms. Bowcock, RealPage’s spokeswoman, said property managers “find value” in its software. But there are signs that some customers are starting to worry about the legal threats. In February, Pinnacle and one other multifamily residential property owner, listed as defendants in the Tennessee federal court litigation, agreed to settle claims in that lawsuit that they inflated rental prices using RealPage’s software.

Although a federal judge in Tennessee let the tenants’ litigation move forward, none of the pending lawsuits has gone to trial. To prevail, they will need to present sufficient evidence of collusion, by way of RealPage’s software, to convince the courts to see the information exchange as illegal.

Some antitrust lawyers say those facts need to be fleshed out and tested in court.

“We’re fighting on a hypothetical battlefield right now,” said Douglas Ross, who teaches antitrust law at the University of Washington.

Danielle Kaye is a business reporter and a 2024 David Carr Fellow, a program for journalists early in their careers. More about Danielle Kaye







Friday, July 19, 2024

Elect Ed Slavin to Anastasia Mosquito Control Board of St. Johns County, Seat 1

May I have the honor of your vote on or before November 5, 2024 for Commissioner of the Anastasia Mosquito District of St. Johns County, Seat 1?

Here's my 2022 Q&A with the League of Women Voters, reprinted from this blog:

What motivated you to run for office?

It's our money. I've been a watchdog on mosquito control since 2006. Mosquitoes could bring us the next global pandemic. We will be prepared with data, research, education, and environmentally-friendly, non-toxic natural pesticides. My dad was an 82nd Airborne Division paratrooper, infected with malaria in Sicily. Dad recovered in Army hospitals, but we saw dad suffer lifetime effects. LWV's Ms. Robin Nadeau asked me to help her investigate Anastasia Mosquito Control of St. Johns County, buying a $1.8 million no-bid, luxury Bell Jet Long Ranger helicopter incapable of killing a single skeeter, not unlike buying a Porsche to use with a snowplow. We persuaded AMCD to cancel illegal, no-bid helicopter contract, saving $1.8 million in 2007.  

What do you see as the most pressing issues for this office and how do you propose to address them?
Advancing research and education while protecting scientific integrity and employee whistleblower rights; safeguarding the independence of AMCD, an independent scientific and technical organization; protecting public health, the environment and public funds. Let's assure that "whistleblower" ethical employees are heard and heeded whenever they raise concerns. Let's resist any further effort by the St. Johns County Board of County Commissioners to take over independent AMCD, as attempted by former SJC County Administrator Michael Wanchick and County Commission Chairmen. I oppose allowing arbitration clauses in AMCD contracts, Yes, I've been a watchdog of mosquito control environmental protection and spending since December 2006.

What training, experience, and characteristics qualify you for this position?

Helped persuade our independent mosquito district to cancel unwise, no-bid luxury $1.8 million helicopter contract. Won declassification of our frail planet's largest-ever mercury pollution event (Oak Ridge, Tenn. Y-12 Nuclear Weapons Plant),triggering nationwide cleanups; recommended for Pulitzer Prize by DA. Clerked for USDOL Chief Administrative Law Judge Nahum Litt and Judge Charles Rippey. Staffer for Senators Ted Kennedy, Gary Hart & Jim Sasser. B.S.F.S., Georgetown U.; J.D., Memphis State U. Your watchdog, termed an "environmental hero" by FOLIO WEEKLY (after reporting City's illegal dumping of landfill in lake and illegal sewage effluent pollution of our saltwater marsh). Shall we ask questions, demand answers & expect democracy?

How important are environmental concerns when making decisions for the Anastasia Mosquito Control District?
Very important

Explain your answer.

Rachel Carson's "Silent Spring" informs good science and use of non-toxic natural pesticides as much as possible. Amid global climate change, the next pandemic could be a mosquito-borne disease. Let's protect AMCD independence, education and applied research to protect public health and our environment. I support AMCD's leadership on natural pesticides. I once reported FEMA and AMCD to federal environmental law officials when bald eagles were exposed to organophosphate pesticides. Support AMCD working with other mosquito control districts and officials to share scientific knowledge to protect all of us "non-target species": mosquito control workers, residents, tourists, pets, horses, livestock, bees and other pollinators, flora and fauna. 

St. Johns County is growing rapidly. How does this impact the management of mosquito control?

Overdevelopment increases the expense of mosquito control and increases exposure of families to mosquitoes from wetlands. St. Johns County Commissioners, developers and their big money clout decide way too many unwise development decisions. This requires our nimble small mosquito control special taxing district to innovate, with sensitive adaptation of mosquito control techniques to protect entire new neighborhoods, which seem to spring up overnight, adjoining wetlands. Public education, applied research, sound science-based policies and non-toxic mosquito control methods, are all essential to protecting public health from mosquito-borne diseases. AMCD exists to prevent any outbreaks of deadly mosquito-borne diseases. We must do it right!

Leaked memo shows J.D. Vance’s anti-woke ideology on foreign affairs. (John Hudson, WaPo)

Freshman Senator J.. Vance -- a smarty-pants bigot who is too big for his britches?  Not a member of the Senate Foreign Relations Committee.  Ahead of his skis? ?Good reporting by John Hudson in The Washington Post:

Leaked memo shows J.D. Vance’s anti-woke ideology on foreign affairs

Trump’s VP pick froze dozens of ambassador nominations over issues like gender transition care and diversity hiring, offering a glimpse into his anti-establishment views. 

Republican vice-presidential nominee J.D. Vance, ahead of his remarks Thursday at the Faith & Freedom Coalition's God & Country Breakfast, on the sidelines of the Republican National Convention in Milwaukee. (Jabin Botsford/The Washington Post)

Before J.D. Vance became Donald Trump’s pick for vice president, he was known in the most powerful offices of the State Department as thesingle biggest obstacle to confirming career ambassadors in the Senate.

Armed with a questionnaire on hot-button social issues about gay and lesbian rights, gender transition care and hiring practices related to diversity, equity and inclusion, Vance (R-Ohio) held up for more than a year the nominations of dozens of diplomats assigned to serve in posts across the Middle East, Africa and Latin America.

Skip to end of carousel
Trump is officially the Republican’s presidential nominee and chose Sen. J.D. Vance (R-Ohio) as his running mateDemocrats are still warring over whether President Biden is the right person to remain atop their ticket.
(The Washington Post)
Check out The Washington Post’s presidential polling averages of the seven battleground states most likely to determine the outcome of the election.
Here are some of the key dates ahead of the 2024 general election in November.
Sign up for The Campaign Moment, reporter Aaron Blake’s guide to what you really need to know about the 2024 election.
End of carousel

A copy of Vance’s questionnaire, obtained by The Washington Post and published here for the first time, asked would-be ambassadors if they would increase the number of “gender-neutral bathrooms” in U.S. embassies, boost resources for “gender dysphoria and gender transition care” and raise the “Progress flag” during “regional Pride celebrations.”

“The publics of many of our allies, and those countries we seek to build stronger relationships with, have traditional Christian, Jewish, Muslim, or Hindu moral values,” Vance wrote in the questionnaire he provided to all nominees. “If confirmed, how would you explain to them what the United States’ promoting ‘human rights for LGBTQ people’ would look like in their country?”

Vance’s memo and intensive scrutiny of President Biden’s ambassador nominees reflects his view that cultural elitism has infected America’s diplomatic corps and needs to be rooted out through extraordinary vetting efforts, said U.S. officials, who spoke on the condition of anonymity to discuss closed-door meetings.

Neither Vance’s Senate office nor the Trump campaign responded to requests for comment for this story.

Document obtained by The Washington Post (The Washington Post)

For many conservatives, Vance’s oversight was a welcome response to long-standing concerns within the GOP that the United States has elevated left-leaning social values at the expense of American interests and alienating partners in more conservative regions of Africa, Latin America or Asia.

Many liberals saw the move as a bid to prioritize his conservative agenda in a way that delayed qualified nominees from taking assignments critical to maintaining U.S. standing in the world.

For career diplomats, the questionnaire forced a tricky dance as they tried to assuage the senator without contradicting President Biden’s assertion that LGBTQ rights were “human rights.”

“It puts career diplomats in a bind to be asked to go on the record commenting on how they would support policies that are favored by the current administration but may not be by the next,” said Barbara Stephenson, a former ambassador to Panama who served in senior positions under both Republican and Democratic administrations.

“One party may support climate change agreements or DEI, and another may not,” she added. “Those career diplomats are required to support the policy of the administration in power, even when that means changing positions they have previously argued for or against.”

Document obtained by The Washington Post (Obtained by The Washington Post)

A year of back-and-forth discussions between Vance and the State Department eventually led to the senator releasing most of his holds in April.

At the height of his campaign, Vance placed holds on more than 30 nominees for Senate-confirmed positions at the State Department. The effect of a hold slows the confirmation process and forces the party in power to call for individual votes instead of the faster method of moving nominations through unanimous consent. The delay leaves vacancies at embassies that are filled temporarily by lower-level officials who don’t enjoy the same status as presidential nominees.

Vance, a Midwest native and best-selling author of the memoir “Hillbilly Elegy,” has said the Iraq War played a formative role in the development of his worldview. He was in high school during the 2003 invasion and decided to enlist in the Marines because he “believed the propaganda of the George W. Bush administration that we needed to invade,” he said in an April speech on the Senate floor.

After deploying, he realized that the architects of the war had “lied” and the “promises of the foreign policy establishment of this country were a complete joke,” he said.

Vance brought that suspicion of the establishment into his discussions about ambassadors with Biden’s senior aides, including Secretary of State Antony Blinken and his top congressional adviser, Assistant Secretary of State Naz Durako─člu.

None of the nominees whom Vance held up drew his ire like Stephanie S. Sullivan, a career diplomat chosen to be Biden’s envoy to the African Union.

Vance accused Sullivan, the former ambassador to Ghana who had overseen an embassy that flew the Pride flag, of being “woke” and promoting a “progressive social policy” on gender identity.

“Why do we have a diplomatic corps that is taking a hotly contested issue in an American political context and demanding the African nations follow the lead of the far-left instead of doing what they think that they should do?” he said in remarks on the Senate floor.

The State Department said Sullivan’s decades-long career in the Foreign Service was “exemplary” and Vance’s “unfounded criticism against her work do not accurately reflect her service to our country.”

Liberal critics of Vance question his opposition to the United States playing an active international role on LGBTQ issues.

“The United States has a responsibility to champion human rights around the globe — and that includes the freedom for LGBTQ+ people to live and love without fear,” said Brandon Wolf, a spokesman with the Human Rights Campaign. “Donald Trump and J.D. Vance are cut from the same anti-LGBTQ+ cloth and have made clear that, should they get the keys to the Oval Office, they will demolish America’s values on the world stage.”

Vance’s defenders say his efforts will help make U.S. diplomacy in the developing world more successful.

“It is not out of line to insist that ambassadors are professionally suited to focusing on the job at hand, as opposed to trying to push what, in most of these countries will be viewed as ultraradical social issues,” said Wade Miller, vice president of the conservative think tank Center for Renewing America. “Vance is in the upper tier of Republicans who have been talking about these issues and taking them on seriously.”

The State Department said the Biden administration stands by its efforts to “ensure that every person, everywhere, can live free from violence and discrimination, with their equal rights respected.” The White House has vowed to push back against the GOP’s anti-woke efforts, including by repealing a provision in a government spending bill that essentially bans rainbow Pride flags from being flown above U.S. embassies.

Politico reported last July that Vance had sent the questionnaire to nominees but did not obtain a copy of the document and Vance declined to provide it. Unlike other GOP firebrands known for holding up presidential nominees like Sens. Ted Cruz (R-Tex.) or Tommy Tuberville (R-Ala.), Vance’s extensive efforts were unique in that he does not sit on the committee that oversees the nominations — in this case, the Senate Foreign Relations Committee.

While Vance’s skepticism of Biden’s nominees ran deep, officials said he asked sincere questions about the threats and challenges in various countries. By April, Vance and State Department personnel broke through the year-long logjam after he felt confident that the administration would not place ideology over national security considerations, said the officials familiar with the discussion.

At that point, he let roughly 30 nominations go forward except for two: Sullivan and David Kostelancik, Biden’s pick for ambassador to Albania.

Last month, Sullivan was confirmed through a Senate procedure known as cloture. Kostelancik still awaits confirmation.

Election 2024

Catch up on key takeaways from the final day of the Republican National Conventionin Milwaukee, where Donald Trump dramatically recounted the assassination attemptat his rally. 

Biden pressure: President Biden is facing the most concerted effort yet by leading Democrats seeking to force him out of the presidential race amid concerns over his advanced age and sluggish poll numbers. Here’s what would happen next if Biden dropped out.

Trump VP pick: Trump has chosen Sen. J.D. Vance of Ohio as his running mate, selecting a rising star in the party and previously outspoken Trump critic who in recent years has closely aligned himself with the former president.

Presidential election polls: Check out The Post’s presidential polling averages of the seven battleground states most likely to determine the outcome of the election.

Key dates and events: Voters in all states and U.S. territories have been choosing their party’s nominee for president ahead of the summer conventions. Here are key dates and events on the 2024 election calendar.

Show more