Arizona AG says many of state’s largest landlords inflated rent prices

PHOENIX (AZFamily) — Arizona Attorney General Kris Mayes says nine of Arizona’s largest rental companies “cheated” renters. The result, according to a lawsuit filed by Mayes earlier this year, is that renters paid higher prices than the rental market would have otherwise charged.

“This is flat-out cheating,” said Mayes in an interview with Arizona’s Family Investigates.

Mayes’ lawsuit alleges that the landlords used a software company called RealPage to set the rent prices.

The lawsuit states that “approximately 70% of multifamily apartment units listed in the Phoenix metropolitan area are owned, operated, or managed by companies that have contracted with RealPage for ‘Revenue Management.’”

“It spits out a price, and all of those landlords are asked to stick to that price. No one is allowed to go beneath it, because that of course would ruin their scheme,” said Mayes. “It’s the modern day equivalent of a smoke-filled back room deal between landlords, where they’re agreeing to charge high prices. And we passed anti-trust laws in this state and this country for precisely this reason.”

According to U.S. Census data reviewed by Arizona’s Family Investigates, in 2018, the majority of renters in Maricopa County paid between $500 and $1,500 per month. In 2023, the majority paid between $1,500 and $2,500 per month.

That increase coincides with an increase in the number of large investors buying rental properties in Maricopa County. They are purchasing both single-family homes and multi-family apartment complexes.

According to the organization Private Equity Stakeholder Project (PESP), the percentage of homes purchased by investors between 2018 and 2022 increased by 78%.

“We’ve seen it very clearly, where a private equity firm buys a building and then immediately increases the rent,” said Jordan Ash, who is the housing director for PESP. Ash studies the effects investors have on the housing market.

“They see an opportunity to raise rents or to add on fees or to spend less on maintenance and repairs,” Ash said. “One company’s rents affect another’s,” he said.

Renters who spoke to Arizona’s Family Investigates say the higher prices don’t always mean better service or living conditions.

“I was without a shower in my apartment, and it was completely taped off for approximately seven weeks,” said Justin Clark, who is now suing his former landlord.

“How do you not have the staff to make sure that I have A/C?” asked Kacie Gettinger, who says the air conditioner in her apartment did not work.

She has since moved out and is now living in a home owned by a local landlord.

Clark paid $2,200 per month for a one-bedroom apartment, while Gettinger paid $3,100 per month.

Both apartments are owned by one of the companies that is being sued by Kris Mayes.

RealPage’s media team did not respond to repeated requests for comment, but in court documents, its attorneys said Mayes’ lawsuit “advances and implausible theory” and contains “demonstrably false allegations.”

If you believe your rent may have been affected by a landlord using RealPage, you can file a complaint with the Arizona Attorney General here.

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