The lawsuit alleges that the landlords violated the Sherman Anti-trust Act and the North Carolina Unfair or Deceptive Trade Practices Act, which both prohibit businesses from engaging in unfair practices affecting competition in the market to increase a company's market influence.
According to the lawsuit, RealPage is a property management software that utilizes nonpublic data from landlords to recommend rent cost adjustments to landlords using the program.
When landlords use RealPage's software, they must agree to provide private information about their properties' rent transactions, such as rent discounts, rent terms and lease status. RealPage then analyzes data from more than 16 million rental units across the country to provide suggested rent changes to landlords.
The lawsuit states that traditionally, healthy market competition would lead to landlords offering discounts on rent or luxury amenities in order to compete with other landlords. With RealPage's analytical services, landlords are now coordinating their rent prices, allowing them to raise prices with less fear of losing prospective renters to other properties with lower prices, according to the lawsuit.
"In the absence of that software, the property owner will have to find public information and analyze the market and ideally price the rental at a lower level than the one that will come up if they use the software," Roberto Quercia, a professor in UNC's Department of City and Regional Planning, said.
An interactive map created by The Washington Post shows that 17 properties in the Chapel Hill area are managed or owned by landlords cited in the lawsuit, including Union Chapel Hill, Bell Chapel Hill and Collins Crossing Apartments.
The average rent prices in Chapel Hill and Carrboro have increased by around $500 and $250 respectively over the last five years, contributing to an affordability crisis in the area.
"When people take advantage of the essential need for housing to extract the maximum profit possible by cheating the system, they are damaging their fellow citizens and they are damaging the company," Chapel Hill Town Council Member Theodore Nollert said.