More than 18 months after D.C.'s attorney general sued 14 of the city's corporate landlords in 2023 for operating a “rent-setting cartel” with software company RealPage, a defendant — one of the District's largest developers — has reached a settlement.
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WC Smith agreed to pay just over $1M and refrain from using any revenue management software that utilizes nonpublic data, according to the settlement announced Monday morning by Attorney General Brian Schwalb's office.
The attorney general's November 2023 lawsuit alleged that WC Smith's use of RealPage software to set rents for over 9,000 apartments in D.C. amounted to illegal collusion because the centralized platform uses private rent data from other landlords to suggest prices.
“We have consistently asserted that we did not participate in any of the activities alleged by the Office of Attorney General in the Real Page litigation,” WC Smith President John Ritz said in a statement to Bisnow.
“We now have been dismissed from this case without admission of the allegations or acceptance of liability. By settling this matter, we avoid considerable and unnecessary legal expenses and can return our focus to creating thriving communities for the residents of Washington, DC – which has been our mission for more than 50 years.”
Founded in D.C. in 1968, WC Smith has a $1.7B portfolio of residential properties across the city, according to its website. It was the second-most-active developer in D.C. between 2020 and 2024 with 15 projects completed, according to the Washington D.C. Economic Partnership.
Its major developments over the last decade have included the 1,140-unit Collective in Navy Yard, the 419-unit Avec building on H Street and the 450-unit Skyland Town Center in Southeast. The firm in December named longtime executive Brad Fennell as CEO, replacing Chris Smith, the son of founder William C. Smith.
The $1M settlement comes as WC Smith is also facing millions in lost income due to the unprecedented levels of unpaid rent in D.C.'s affordable housing market. Ritz told Bisnow in February the company wrote off $7.2M in bad debt and has a $9.1M accounts receivable balance, with 80% of that coming from past-due rent at affordable properties.
The D.C. attorney general's lawsuit named 13 other D.C. landlords, including national REITs like AvalonBay Communities, Equity Residential, Mid-America Apartments and UDR. Schwalb's office hasn't announced any other settlements in the suit.
“I commend W.C. Smith for putting an end to its anticompetitive practices and cooperating with my office to reach this agreement,” Schwalb said in a statement. “We will continue working to hold RealPage and the remaining landlords accountable.”
The Department of Justice is also taking action against RealPage and landlords that use the platform. Following a two-year investigation, the DOJ filed an antitrust lawsuit against the software company in August, alleging it helped companies artificially inflate apartment rents. In January, the DOJ expanded its lawsuit to include six major national landlords.
Real estate executives told Bisnow in January they were puzzled and concerned by the DOJ adding landlords to the suit given that it is targeting relatively common industry practices of sharing rent and occupancy data. The case is ongoing in federal court in the Middle District of North Carolina.
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