CHARLOTTE — Rent prices have skyrocketed in recent years compared to the annual increases of the past, but the rising prices might not be due to inflation or ordinary supply and demand.
Authorities say one company and property managers across the state created a cartel to get the most money possible out of people renting apartments, and they did it with the help of a machine.
9 Investigates uncovered a state and federal investigation into price fixing at apartment complexes, including companies that operate here in Charlotte like Greystar and others.
The investigation surrounds the software company RealPage.
North Carolina Attorney General Josh Stein says RealPage provides services to landlords and management companies with data to help determine just how much rent they should charge.
“Housing is already too expensive for so many North Carolinians,” Stein said when announcing the investigation this week. “Companies cannot collude to illegally raise rents on tenants. My investigation into RealPage will shed light on whether this company’s operations violate the law and raise rental costs for residents.”
RealPage’s own website touts its ability to use data to let property managers increase rent, among other things.
The software that RealPage offers is called YieldStar, and it takes data from housing markets in real time to provide rent prices that property managers can charge to maximize their profits.
Stein wants to know where the data from RealPage is coming from, and whether it is using non-public data in violation of antitrust laws. Under price fixing laws, companies can’t share their private data with competitors with the goal of increasing prices for consumers.
“What we are concerned about is the potential collusion between RealPage and the apartment owners, and they are agreeing to raise rents even higher than what the market demands,” Stein said.
RealPage’s real impact
For many renters, like Jeremy Henkle, the cost of living in Charlotte is pushing too high.
“It’s definitely expensive,” Henkle told Channel 9′s Hunter Sáenz on Friday.
The Charlotte Observer reported on YieldStar’s use in 2014, letting property managers adjust rent prices day-to-day in response to new data. At the same time, recent years have seen some of the biggest rent increases in the Charlotte area.
According to the University of North Carolina at Charlotte’s State of Housing in Charlotte Report in 2023, the average rent price has increased by 61% since 2010, going from $932 per unit to $1,502. But 38% of the total rent growth occurred during the past four years alone.
Henkle lives at an apartment complex in NoDa, and he knows living here will only get more expensive.
“They definitely hike it up every couple of years, it seems like, when it’s up for renewal,” Henkle said.
Stein says investigators are looking into those rate increases when renters ebb and flow from units.
“Property managers can use that private information to raise rents in an area and leave units empty to keep those rents high, which worsens the affordable housing crisis and makes it difficult for North Carolinians to rent housing,” according to Stein’s office.
Stein’s office says there are claims that RealPage suggests that property managers keep some units vacant to artificially decrease supply, while costing you more.
He isn’t alone. The U.S. Department of Justice submitted a memo in support of a lawsuit filed against RealPage and some of the largest apartment companies in the United States. The lawsuit calls the rental industry “a cartel ... that’s likely exacerbating the affordable housing crisis.”
“How is our government allowing that to happen? I don’t get that,” Henkle said.
No charges have been filed against RealPage as of Friday.
9 Investigates reached out to Greystar and RealPage for comment on the investigation and pending lawsuits; as of now, they have not responded.
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