Washington, D.C., Attorney General Brian L. Schwalb announced Monday that William C. Smith & Co. will pay over $1 million and reform its business practices to resolve charges that it conspired with other District landlords while using pricing software from RealPage to allegedly inflate rents.
In November 2023, Schwalb’s office filed suit against RealPage and 14 landlords, including W.C. Smith, accusing them of “unlawfully colluding” by collectively adopting the rents set by the Richardson, Texas-based revenue management software company’s technology and “unlawfully agreeing to exchange competitively sensitive data in violation of the District of Columbia Antitrust Act.”
W.C. Smith, which owns 9,000 units and is the first company to settle in the Washington, D.C., case, denied the allegations in the complaint and denied that it violated any law or engaged in any anticompetitive conduct, according to the consent order filed in the Superior Court of the District of Columbia.
“We have consistently asserted that we did not participate in any of the activities alleged by the Office of Attorney General in the RealPage litigation,” John Ritz, president of W.C. Smith, said in a statement provided to Multifamily Dive. “We now have been dismissed from this case without admission of the allegations or acceptance of liability. By settling this matter, we avoid considerable and unnecessary legal expenses and can return our focus to creating thriving communities for the residents of Washington, D.C. — which has been our mission for more than 50 years.”
Agreement details
As part of the consent agreement, W.C. Smith, which ceased using RealPage’s Lease Rent Options software in December 2023, agreed to a number of conditions for 10 years, including:
- The company will not use or license software that uses nonpublic information related to buildings that it doesn’t manage or that discloses recommended prices for leases concerning buildings not managed or owned by the firm.
- W.C. Smith will not encourage or require anyone else using revenue management software to accept recommended prices, provide justification when rejecting any recommended price, or encourage or require any person to choose a certain override amount or option.
- The firm will not promote the use of revenue management software to other owners and operators of apartments in the District of Columbia.
- The company will not communicate any information about any multifamily properties other than public information with another apartment manager.
In Washington, more than 30% of apartments in multifamily buildings with five or more units and approximately 60% of units in large multifamily buildings with 50 or more units are priced using RealPage’s software, according to Schwalb.
Another landlord named in the original suit, Arlington, Virginia-based REIT AvalonBay Communities, had its motion to dismiss granted in May 2024 because its contract precludes sharing its pricing and supply data. The 12 other firms named in the suit include:
- Avenue5 Residential.
- Bell Partners Inc.
- Bozzuto Management Co.
- Camden Summit Partnership.
- Equity Residential.
- Gables Residential Services.
- GREP Atlantic.
- Highmark Residential.
- JBG Smith Properties.
- Mid-America Apartments.
- Paradigm Management II.
- UDR.
In the original filing, Schwalb claimed that RealPage policed contracts with these operators and landlords abided by its suggested rents more than 90% of the time. If the market were truly competitive, he said, the defendants would “keep their pricing strategies confidential.”
“RealPage and the defendant landlords illegally colluded to artificially raise rents by participating in a centralized, anticompetitive scheme, causing District residents to pay millions of dollars above fair market prices,” Schwalb said in a news release announcing the suit. “Defendants’ coordinated and anticompetitive conduct amounts to a District-wide housing cartel.”
