Mobile home park owners accused of rental price-fixing in new US lawsuit

Equity Lifestyle Properties

01/09/2023 16:13

By Mike Scarcella
       Sept 1 (Reuters) - A group of the country's largest
corporate managers of mobile home communities and a market data
provider were sued in U.S. court on Thursday for allegedly
conspiring to inflate rental prices for older and low-income
residents.
    Two Illinois residents who rented lots for their
manufactured homes filed the prospective class action in Chicago
federal court against Datacomp Appraisal Systems and nine other
companies that own or have controlling interests in more than
150 housing communities across the country.
    The lawsuit alleges that the corporate owners shared
competitively sensitive information about lot rentals and
occupancy via industry reports from Datacomp. That information,
according to the lawsuit, allowed the defendants to coordinate
their prices in violation of U.S. antitrust law.
    Plaintiffs' attorneys at DiCello Levitt and Hausfeld, who
said they filed the lawsuit based on their own investigation,
estimated a class size of "hundreds of thousands" of members in
the U.S.
    The defendants include Chicago-based Equity LifeStyle
Properties  ELS.N , which bought Datacomp in 2021 for $43
million; Michigan-based RHP Properties, which bills itself as
the country's largest privately-held manufactured home community
owner with assets of more than $6 billion; and Michigan's Sun
Communities  SUI.N , a real estate investment trust.
    Other defendants include Lakeshore Communities in Illinois;
YES! Communities in Denver, which the lawsuit said was partially
owned by private equity firm Stockbridge Capital Group; and
Inspire Communities in Phoenix, owned by private equity firm
Apollo Global Management.
    Representatives from Datacomp and the other corporate
defendants did not immediately respond to requests for comment.
    The lawsuit adds to a growing number of cases that allege
pricing-fixing through shared market data among competitors.
    Dozens of cases that were consolidated in Tennessee federal
court earlier this year accuse apartment data and analytics
company RealPage of conspiring with real estate firms to drive
up multifamily rental and student housing rates.
    The mobile home suit alleged rental prices have increased
9.1% per year between 2019 and 2021.
    "The effect of defendants' conspiracy has been devastating
to manufactured home residents," the lawsuit alleged. "These
individuals — whose median annual household income is
approximately $35,000 — are being overcharged for what used to
be affordable housing."
    The 85-page lawsuit seeks to stop the defendants' alleged
price-coordination efforts. It also seeks triple damages and
other remedies.
    "Given the number of Americans who reside in mobile home
communities and the fact that the case is nationwide, damages
will be substantial," said plaintiffs' attorney Gregory Asciolla
of DiCello Levitt.
    
    The case is Carla Hajek and Gregory Hammerland v Datacomp
Appraisal Systems Inc et al, U.S. District Court, Northern
District of Illinois, No. 1:23-cv-06715