'Must be held accountable': Arizona AG sues corporate landlords over 'astronomical rent hikes'

Arizona Attorney General Kris Mayes (D) is suing some of the state's biggest corporate landlords and a Texas-based software company over what she calls "astronomical" year-over-year increases in apartment rent.

Mayes' lawsuit alleges that major residential real estate companies — in conjunction with the company RealPage — "directly contributed to Arizona’s affordable housing crisis" by colluding to gouge renters in Phoenix and Tucson, which are the state's two largest metropolitan centers. According to the Arizona Republic, rents in the Phoenix metro saw a 30% average increase in 2021 alone, which was the highest in the nation.

"[The companies] stifled fair competition and essentially established a rental monopoly in our state’s two largest metro areas. RealPage and its co-defendants must be held accountable for their role in the astronomical rent increases forced on Arizonans," Mayes stated.

READ MORE: (Opinion) Rent is unaffordable for more than half the country

The AG's office is arguing that landlords' collaboration with RealPage constitutes a violation of the Arizona Uniform State Antitrust Act and the Arizona Consumer Fraud Act. And Mayes isn't the only state law enforcement official pursuing legal action over rent increases tied to RealPage. The Arizona Republic reported that cases were also brought last year in Nashville, Tennessee and Washington, DC. In 2023, ABC affiliate WKRN reported that Nashville's year-over-year rent increase was the fifth-highest in the US. And the DC City Council passed a bill last June to cap annual rent increases at 6% in an effort to ease costs on residents.

RealPage was the subject of a major investigation by nonprofit news outlet ProPublica in 2022. According to the outlet, RealPage uses a software called YieldStar that deploys an algorithm that helps landlords determine the maximum amount of rent they can charge for an available unit. One of the algorithm's developers said that human leasing agents had "too much empathy" in negotiating rents with tenants, and argued they should instead opt for the computer model that often recommends double-digit percentage increases in rents.

"The beauty of YieldStar is that it pushes you to go places that you wouldn’t have gone if you weren’t using it," one real estate professional said in a video testimonial.

The Arizona Republic reported that the nine corporate landlords named in Mayes' lawsuit are Apartment Management Consultants, Avenue5 Residential, BH Management Services, Camden Property Trust, Crow Holdings, LP / Trammell Crow Residential, Greystar Management Services, HSL Properties, RPM Living and Weidner Property Management.

READ MORE: Are rents rising in your neighborhood? Don't blame the baristas