Oregon, along with eight other states, has proposed a significant settlement aimed at halting the country’s largest landlord, Greystar Management Services, from using controversial algorithmic software to increase rent prices. The proposed settlement amounts to $7 million and is designed to prevent further litigation and associated court costs if approved by the U.S. District Court for the Middle District of North Carolina.
Greystar, which manages nearly 950,000 rental units across the United States, including approximately 19,000 units in Portland, has faced scrutiny for employing rent-setting algorithms developed by RealPage, a Texas-based software company. These algorithms allegedly provided pricing recommendations based on sensitive data gathered from competitors, leading to coordinated rent increases among landlords.
Oregon’s Attorney General, Dan Rayfield, expressed concerns over the impact of such practices on families, stating, “When the largest landlord in America uses an algorithm to price-fix the rent, the result is simple: people pay more. It squeezes working families when the cost of housing is already at an all-time high. This settlement holds the largest U.S. landlord accountable. It’s a win for Oregonians, our pocketbooks and the rule of law.”
Under the terms of the proposed settlement, Greystar would agree to cease the use of algorithmic rent-setting software and is prohibited from sharing or receiving sensitive data from other landlords. Additionally, the company must refrain from participating in meetings organized by RealPage involving other landlords.
Should the court approve the settlement, Greystar will not have to go to trial or admit any wrongdoing. Instead, it will comply with the states’ conditions to avoid further legal complications. The $7 million settlement will be paid to the state of California, which will subsequently distribute the funds among the other plaintiff states, including Oregon, Colorado, Connecticut, Illinois, Minnesota, North Carolina, Tennessee, and Massachusetts.
This settlement proposal comes shortly before the Portland City Council voted to ban algorithmic price fixing, highlighting the growing regulatory scrutiny on rental practices in the region. In August 2023, Greystar had already reached a non-monetary settlement with the U.S. Department of Justice regarding a lawsuit initiated during the Biden administration, indicating a trend toward increased accountability for large landlords.
As the housing crisis continues to intensify across the United States, the outcome of this proposed settlement could set a precedent for how rental pricing strategies are regulated, impacting landlords and tenants alike.
