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FBI raid on real estate company linked to Harlan Crow's RealPage rental price fixing [1]

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Date: 2024-06-05  

A tip of the hat to David Cay Johnston, who opened his interview on the Mark Thompson Show yesterday by noting a story that, so far as I can tell at this time, has been completely blacked out of the news mainstream media.

Two weeks ago, on Wednesday, May 22, the Federal Bureau of Investigation raided the Atlanta headquarters of Cortland Management. According an MLex article on May 29, the FBI raid was

… part of a criminal antitrust investigation by the US Department of Justice into a conspiracy to artificially inflate rents for apartment units. The inspection comes as the DOJ's antitrust division deepens its investigation into the rental housing market and the use of a price-setting software provided by RealPage, whose clients include some of the largest US residential real estate owners and management companies…. Cortland is named among dozens of defendants in a putative class action in Tennessee alleging the use of RealPage’s software platform to coordinate and agree upon rental housing pricing and supply.

As David Cay Johnston points out, such price fixing is a clear violation of the 1890 Sherman Antitrust Act, which imposes severe penalties — including imprisonment — for the felony of creating a “contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce...”

Johnston also pointed out that rising prices are the major reason why Americans remain so dour about an economy that — according to the professional management class — is doing great. Johnston noted the two areas with the largest price increases are food, and rent. And in the past four years, rent prices have increased by a third nationwide. Some localities and regions have seen much higher rent increases.

So, here is the Biden administration taking legal action against a company that is using its dominant market position in the real estate market to gouge Americans by using artificial intelligence to artificially drive up rent prices. Why don’t more Americans know about this? Why is the mainstream news media silent about this important legal action? Why aren’t Democrats shouting from the rooftops about this legal action against big corporations?

In October, 2022, ProPublica published the article, Rent Going Up? One Company’s Algorithm Could Be Why, detailing how RealPage had developed and sold its software to large real estate management companies specifically to extract as high a price as possible in any rental market:

In one neighborhood in Seattle, ProPublica found, 70% of apartments were overseen by just 10 property managers, every single one of which used pricing software sold by RealPage. To arrive at a recommended rent, the software deploys an algorithm — a set of mathematical rules — to analyze a trove of data RealPage gathers from clients, including private information on what nearby competitors charge. For tenants, the system upends the practice of negotiating with apartment building staff. RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money. One of the algorithm’s developers told ProPublica that leasing agents had “too much empathy” compared to computer generated pricing.

In April 2023, author James M. Nelson posted an article, The Harlan Crow—Clarence Thomas connection no one saw coming—RealPage, based on research for his forthcoming book, The New Landlord, Powered by Big Data, and Artificial Intelligence. Nelson revealed that RealPage was created in 1998 by real estate heir, and owner of at least one US Supreme Court Justice (Clarence Thomas) , Harlan Crow. Yeah, that Harlan Crow. Nelson wrote in his article:

Beginning in about 1998, to bring about meaningful change to the rental industry, Harlan Crow pushed a group of investors to form a consortium comprising of real estate and technology companies to build the RealPage Platform, 2 he is one of its originators. In 2002 AI-powered platforms like Apple, Amazon, and Microsoft entered the $12 trillion rental housing industry. Driving the sector in all 50 states is RealPage, the primary provider of AI technology. They own and operate the industry-wide common pricing platform (referred to as Platform) where up to 95% of all rental units are priced. Through the Platform, landlords access and share all data on their applicants, tenants, and properties. Nationally, they provide pricing for 20 million rental units. Today the rental industry has been wholly transformed into a data-driven economy predicated upon the theory that landlords no longer compete on price. Harlan Crow’s influence over the rental housing industry is powerful. Greystar CEO Bob Faith detailed that over the decade’s Crow has formed a tight-knit group of managers that now dominate the industry. Just how powerful is that reach? Our concentration study concluded that half of all rental units in the metro Seattle area are priced by a small group of 13 managers who all originated from–the ‘Crow Empire.’

This can be a mighty weapon, if Democrats will only seize it and use it! It is possible that Harlan Crown himself could be caught in the RealPage dragnet cast by the DOJ. And Harlan Crow is one of the billionaires most responsible for corrupting our Supreme Court. Take down Harlan Crow, and a path opens for impeaching, at some point in the future, Crow’s pet corrupted Justice, Clarence Thomas.

TweedleDee5 posted a sadly unnoticed story on RealPage on May 25, 2024, asking us to make sure our Democratic state Attorney Generals are fully involved in the many lawsuits against the company, if they are not already. TweedleDee5 also anticipated Johnston in urging us to make sure voters know that it is Joe Biden’ Justice Department and Democratic state Attorney Generals who are wrestling with RealPage and its monopoly power driving huge rent increases.

It is definitely worth listening to the entire interview of David Cay Johnston. He has been tracking and writing about Donald Trump for three decades, andhas warned about Trump’s megalomaniac ambitions in numerous articles, and two books: The Making of Donald Trump, published in 2017 by Melville House Publishing; and The Big Cheat: How Donald Trump Fleeced America and Enriched Himself and His Family, published by Simon & Schuster in 2022. Johnston won a Pulitzer Prize in 2001 for his coverage of taxes and tax evaders and cheats, in a series of articles in The New York Times. The series led to a number of tax policy changes by both the Clinton and Dubya Bush administrations.

Johnston forecasts Trump will lose the 2024 election by at least ten million votes, but is worried about the Democratic Party which “has a long record of snatching defeat from the jaws of victory.” Johnston also thinks that Trump’s behavior will compel judges to imprison Trump. Grab a cup of coffee or iced tea, and give it a full listen:

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[1] Url: https://www.dailykos.com/stories/2024/6/5/2244971/-FBI-raid-on-real-estate-company-linked-to-Harlan-Crow-s-RealPage-rental-price-fixing?pm_campaign=front_page&pm_source=trending&pm_medium=web

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