Are some rents in Canada part of a price-fixing scheme?
CBC
Cynthia Black believes her rent has been rigged.
Since 2022, the Toronto resident says she has twice faced annual rent increases of either seven or 11 per cent — depending on the lease type her household was offered — in two Livmore buildings owned by GWL Realty Advisors, a division of Canada Life.
The buildings were constructed after 2018, which means they are exempt from Ontario rent controls, which are currently set at an annual increase of 2.5 per cent.
"The hikes have never made any sense. And when myself and other tenants sat down and asked [GWLRA] to please stop raising rents so high, they told us they use software called YieldStar to help determine our rents," she told CBC's The National.
Black had never heard of YieldStar and says she didn't think much of it.
"I wasn't able to negotiate my rent in any way," Black said.
But in June, she says YieldStar came up again — only this time it was in the news, as the FBI was investigating the company that owns it, RealPage, and landlords who use it for alleged collusion, price-fixing and artificially inflating rents across the U.S.
That investigation ultimately led the U.S. Department of Justice to announce a lawsuit against RealPage this past August. In a statement, the DOJ said, "Americans should not have to pay more in rent simply because a company has found a new way to scheme with landlords to break the law."
The DOJ says YieldStar allows landlords to use "mathematical algorithms to align their rents."
The DOJ further alleges the software is developed and sold to allow landlords to "sidestep vigorous competition in the market. Competing landlords agree to submit to RealPage, on a daily basis, their most sensitive, non-public information, including rental rates, lease terms and projected vacancies. The algorithm then takes that information and sends real-time pricing back to competing landlords."
According to RealPage promotional material, "by leveraging real-time lease-transaction data, YieldStar monitors price shifts daily, providing greater precision for optimum pricing."
Black told CBC News she was furious when she realized what was happening.
"How dare my landlord be using this software that's under investigation for price-fixing in the States," she said.
When CBC first approached GWLRA — which owns thousands of properties across Canada — in early October to learn more about its use of YieldStar, the company would not respond to questions about the software. GWLRA did, however, emphasize that it has only raised rents at a rate of 3.5 per cent per year, on average, across its real estate portfolio.
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