W.C. Smith Settles D.C. Apartment Pricing Lawsuit for $1 Million

Key Takeaways

W.C. Smith & Co. will pay over $1 million and change its practices to settle claims of conspiring to inflate rents via RealPage software.
The firm, which owns 9,000 units, denies any wrongdoing, stating the settlement avoids further legal costs.
Over 30% of multifamily apartments in D.C. utilize RealPage’s software, which has come under scrutiny for collusion among landlords.

Settlement Details and Allegations

Washington, D.C. Attorney General Brian L. Schwalb announced that William C. Smith & Co. will settle for over $1 million and reform its business practices in response to allegations of conspiring with other landlords to artificially inflate rent prices. This settlement marks a significant resolution to ongoing antitrust concerns related to RealPage’s pricing software.

The lawsuit, filed in November 2023, implicated W.C. Smith and 14 other landlords in unlawful collusion by adopting price recommendations from RealPage, based in Richardson, Texas. These practices allegedly breached the District of Columbia Antitrust Act, as defendants were accused of exchanging sensitive data that could manipulate rent prices.

W.C. Smith, which denied all allegations, asserted it had not participated in any improper conduct. John Ritz, the company’s president, emphasized that by reaching a settlement, they avoid unnecessary legal expenses and can concentrate on their core mission of supporting Washington, D.C. communities.

Under the terms of the consent agreement, W.C. Smith has committed to several operational changes for the next decade, including:

– Discontinuation of software licenses that disclose nonpublic information about entities outside their management.
– Prohibition on encouraging others to accept RealPage’s recommended pricing.
– Restriction on promoting revenue management software to other apartment operators in D.C.
– Limiting communication with other apartment managers to publicly available information only.

According to AG Schwalb, over 30% of apartments in D.C.’s multifamily buildings, and approximately 60% in larger properties, currently use RealPage’s pricing software. This has raised concerns regarding competitive practices in the housing market.

Additionally, another accused landlord, AvalonBay Communities based in Arlington, Virginia, successfully had its motion to dismiss the case granted in May 2024, citing contract stipulations that prevent the sharing of pricing data.

The lawsuit alleges that RealPage’s contracts enforced adherence to suggested rent prices over 90% of the time among participating landlords. Schwalb argued that these actions represent a coordinated effort reminiscent of a housing cartel, leading to unfair rent inflation and increased financial burden on residents.

The other landlords included in the original complaint are:

– 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

Collectively, the allegations and resulting settlements highlight the implications of using pricing software in real estate, particularly concerning transparency and fair market competition in the District of Columbia.

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