Florida corporate landlord raided by FBI

Florida

Photo by Joe Raedle/Getty Images

By Giselle Balido

June 11, 2024

Cortland Management, which owns 46 properties spanning more than 16,000 units across Florida, is under investigation for price-fixing.

Cortland Management, a property management company with dozens of properties in Florida, is under investigation by the FBI as part of a multifamily rent price-fixing investigation.

According to MLex, which first reported the news, on May 22, Cortland Management’s Atlanta office was searched by the FBI under a limited search warrant to investigate allegations that Cortland and other property management companies have been involved in a conspiracy to artificially inflate apartment rents.

Court documents revealed that the alleged conspiracy “involved the use of algorithms by competitors in allegedly fixing prices.”

In this type of collusion, a pricing algorithm combines competitor data and provides the suggested “maximized” rent for a unit, given local conditions. Such software can allow landlords to collude on pricing which, under the Sherman Act, is “unlawful for competitors to join together their independent decision-making power to raise, depress, fix, peg, or stabilize prices,” according to the DOJ and FTC.

The DOJ’s investigation of anti-competitive business practices includes several other large real estate property management companies and is a result of the Biden administration’s efforts to lower the cost of living for middle-class families.

Cortland owns buildings across Florida

Cortland builds and manages apartment projects in many major markets across the United States, with a nearly $21 billion portfolio as of September, as stated on its website. The company has 46 properties spanning more than 16,000 units across the state, including more than a dozen in the Orlando area. This includes Cortland Colburn, a luxury apartment community in the heart of Orlando’s entertainment district. In June, the company announced its newest acquisition when it purchased Harbour Cove, a 240-unit, Class B apartment community located in Pembroke Pines.

The FBI investigation into Cortland comes at a time when the Sunshine State’s rental market has become unaffordable for many families and hardworking Floridians.

In 2024, Miami ranks #10 in the list of the most expensive cities to rent, according to Rental Real Estate. The Sunshine State also places #7 in the ranking of states with the highest rental costs in 2024, according to Forbes.

The skyrocketing price of rent and properties is often attributed to the influx of people from all over the country moving to Florida coupled with the fact that Florida does not have rent control laws limiting the amount that landlords may ask for rent, creating a perfect storm for price hikes.

 

RELATED: Biden proposes new actions to address housing shortages and high costs

 

A state law signed last year by Gov. Ron DeSantis (HB 1417) that prohibits local governments from establishing rent control laws, except in a housing emergency, allows landlords in Florida to increase the rent as often as they wish, as long as sufficient notice is provided each time.

Another reason for the high rental prices, according to Democratic House Minority Leader Fentrice Driskell, is Gov. Ron DeSantis’ and state Republicans’ decision to take money from the Sadowski Fund, a trust established to create affordable housing, and give it away to corporations or direct it to pet projects.

“Renters across Central Florida and our nation deserve to live with dignity, to know the full cost of their housing up front, and to have the power to drive costs down,” says Gen-Z Florida Congressman Maxwell Frost, who continues to advocate in the nation’s capital for fair and affordable housing. “This governor is not fighting for working families, working people, people who are living paycheck to paycheck. And that’s not what our leaders should be doing.”

RELATED: Why Can’t Florida Fix Its Housing Crisis? The GOP Legislature Won’t Use This Program

Author

  • Giselle Balido

    Giselle is Floricua's political correspondent. She writes about the economy, environmental and social justice, and all things Latino. A published author, Giselle was born in Havana and grew up in New Jersey and Miami. She is passionate about equality, books, and cats.

CATEGORIES: HOUSING
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