NC’s new Attorney General takes a strong early step by taking on corporate landlords | Opinion
Newly elected North Carolina Attorney General Jeff Jackson is off to an encouraging start by filing a lawsuit aimed at price fixing by several national apartment landlords.
Jackson, like his predecessor and now governor, Josh Stein, is committed to protecting consumers from distortions of the market that inflate costs and boost corporate profits.
Jackson filed the lawsuit alongside the U.S. Department of Justice and attorneys general from nine other states. They allege that six corporate landlords are trading private information and manipulating vacancies to boost rents. The other states bringing the lawsuit are California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, Oregon, Tennessee and Washington.
“North Carolinians are struggling to afford their rent as it is. We won’t stand for landlords and real estate companies making the problem worse to line their own pockets,” Jackson said in a news release. “I’m suing these landlords to make sure they play by the rules so North Carolinians can get fair prices for rent.”
The six landlords named in the suit — who collectively manage hundreds of thousands of apartments nationwide —are Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc and Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC and Cortland Management LLC.
Also named in the lawsuit is the Texas-based software company RealPage, which provides an algorithm that the attorneys general allege enables landlords to share internal information, jointly set vacancy rates and charge rents higher than they could on their own. The lawsuit says the algorithm helps influence rents for about one-third of all apartments in the Triangle and in Charlotte.
“Renters are entitled to the benefits of vigorous competition among landlords,” the lawsuit says. “In prosperous times, that competition should limit rent hikes; in harder times, competition should bring down rent, making housing more affordable. RealPage has built a business out of frustrating the natural forces of competition.”
Rents in North Carolina cities and in growing cities nationally spiked during the pandemic. The increase has since slowed and in some cases prices have dipped as a massive expansion of apartment construction has softened the market.
But rents remain well above pre-pandemic levels and affordable apartments are in short supply. The Joint Center for Housing Studies at Harvard University reports that, according to the latest available measure, the lack of affordable rent in the U.S. hit an all-time high in 2022 when 22.4 million renter households spent more than 30 percent of their income on rent and utilities – an increase of 2 million households over three years.
By going after national landlords, Jackson is doing what he can to stem the affordability crisis in North Carolina. Renters who paid artificially inflated rents will not get rebates, but the lawsuit could make corporate landlords set future rents more in line with actual demand.
This lawsuit is significant for another reason. It brings to light the kind of market manipulation that distorts costs beyond the effects of simple inflation.
Housing costs overall have been skewed upward by hedge funds and large corporations buying thousands of single-family homes with the help of real estate tax breaks. Market manipulation also increases medical costs and mergers by food suppliers contribute to higher grocery prices.
During the presidential campaign, Republicans blamed excessive government spending in response to the pandemic for an increase in inflation. That may have played a role, but the costs of rent, medical care and groceries are also increased by monopolies and supplier collaboration.
The Biden administration has pushed to prevent mergers and break near monopolies that drive up consumer costs. Those efforts will likely sputter under the incoming Trump administration. President Donald Trump’s willingness to give corporations free rein will undermine his campaign promise to lower or hold down price hikes.
If the federal government backs away from protecting consumer interests, the states can still act. Fortunately for North Carolina, it has an attorney general who is willing to do so.
Associate opinion editor Ned Barnett can be reached at 919-404-7583, or nbarnett@ newsobserver.com