Landlord that manages units in Utah accused of pricing scheme that harmed tenants

SALT LAKE CITY — Utah renters may be impacted by a lawsuit filed by the U.S. Department of Justice. The suit accuses corporate property management companies of using a software company's AI pricing tool to inflate rent prices.

The amended DOJ complaint accuses six large landlords, including one with rental units in Utah. The suit claims the tool took sensitive pricing information from companies that used it, then the companies used that data to set the rent for competitor's units.

The tool allegedly searched for ways to maximize profit and continuously increase rent for landlords' benefit.

DOJ investigation

The DOJ investigation found the RealPage software to be anti-competitive and a violation of free market practices.

"We should be cracking down and regulating the use of these sort of things when it's distorting the market," said Sen. Nate Blouin, D-Millcreek.

Blouin talked about the increasing implications of AI technology in business. He said there is a need to stay on top of it.

"We're going to see the use of it more and more throughout the years … The state needs to be very aware of how it can be used," he said.

Bolin said, as of right now, many Utahns are not aware of where the state is heading.

The investigation alleges use of the tool has affected over 4.5 million homes across the U.S. Some of the properties impacted are in Salt Lake City, Midvale, Sandy and Draper.

In a written statement, a spokesperson from Greystar, a massive property management company that manages a lot of Utah properties, including Astra Tower in downtown Salt Lake City, responded to KSL-TV about the lawsuit's claims it used the tool.

"We are disappointed that the DOJ added us and other operators to their lawsuit against RealPage. Greystar has and will conduct its business with the utmost integrity," the statement read. "At no time did Greystar engage in any anti-competitive practices. We will vigorously defend ourselves in this lawsuit."

Governor's office focusing on solutions for high rent

For many legislators, providing more homes for ownership is going to be the biggest solution to drive competition.

"The idea is we have a free market, a fair market and provide opportunities within that market to everybody in the state to prosper," Senior Advisor for Housing Strategy for Gov. Spencer Cox, Steve Waldrip, said.

Waldrip said encouraging home ownership is something a key focus of the governor's office. Part of the problem lies within the solution, however.

Large-scale developers building Salt Lake subdivisions and high rises have sold their projects to larger property management companies like Greystar. In fact, statistics show 22% of properties in Salt Lake County are owned by companies mentioned in the lawsuit.

"These big companies are potentially building a lot of homes, owning a lot of homes (and) managing a lot of homes," said Blouin, "It's tougher to figure out how exactly to regulate that."

Editor's note: This story has been updated to accurately portray Utah's role in the lawsuit, the number of landlords involved in the suit from the Department of Justice and to clarify who is doing the investigation.

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