DENVER (AP) — The U.S. Justice Department has initiated legal action against several landlords, alleging that they have been collaborating to keep rental prices artificially high. The lawsuit claims that these landlords employed an algorithm to determine rents and exchanged confidential information with competitors, ultimately aiming to enhance their profits.

This lawsuit comes amid a severe housing crisis in the United States, where renters are increasingly burdened by soaring rents that outpace wage growth. Recent data indicates that in 2022, half of American renters spent more than 30% of their income on rent and utilities, marking an all-time high. This situation has led to numerous difficult decisions for families, as they balance essentials like medications, groceries, and school supplies against their rental obligations. The crisis is further highlighted by staggering eviction rates, with around 1.5 million evictions occurring annually, according to Princeton University's Eviction Lab.

Various factors have been identified as contributing to the housing crisis, including a significant decline in new home construction over the last ten years. However, the Justice Department's lawsuit contends that prominent landlords are playing a major role in propelling these high rental costs.

The lawsuit, supported by ten states, including North Carolina, Tennessee, Colorado, and California, targets six major landlords that collectively manage over 1.3 million rental units across 43 states and the District of Columbia. Allegations include a coordinated effort among these landlords to sustain or increase rental fees instead of lowering them.

Greystar Real Estate Partners LLC is one of the defendants in this case. While the company declined to comment directly when approached by The Associated Press, it did release an unsigned statement affirming its commitment to integrity in business practices and insisting that it has not engaged in any anti-competitive behavior. Greystar expressed that it would vigorously defend itself against the allegations.

The lawsuit claims that the accused landlords regularly shared sensitive pricing and occupancy data among themselves, using various forms of communication such as emails, phone calls, and group discussions. This shared data included specifics on renewal rates, their acceptance of algorithmic price recommendations, promotional offers like one month of free rent, and pricing strategies for the coming quarters.

One of the landlords involved has reportedly agreed to collaborate with the Justice Department, with a proposed settlement that would limit how the company can utilize competitors' data and algorithms in setting rental prices.

Doha Mekki, the acting assistant attorney general for the Justice Department's antitrust division, emphasized that the initiative against RealPage and the six landlords aims to prioritize people over profits, making housing more accessible and affordable for millions of Americans. The landlords have been implicated in a broader lawsuit against RealPage, a company that operates an algorithm recommending rental prices. Prosecutors allege that this algorithm utilizes sensitive competitive information, thus enabling landlords to synchronize their prices and circumvent the normal competitive forces that would drive rents down.

In response to the allegations, Jennifer Bowcock, RealPage's senior vice president for communications, stated that their software is utilized in less than 10% of rental units nationwide and that landlords implement their price recommendations less than half of the time. Bowcock urged that the focus should shift away from blaming RealPage and their clients for the housing affordability crisis, asserting that the fundamental issue lies in the shortage of available housing.