MH NEWS: Manufactured/Mobile Home Park Owners Accused of Price-Fixing In New U.S. Lawsuit
Source: Reuters (9/1/23) – 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 interest 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, which bought Datacomp in 2021 for $43 million. Michigan based RHP Propeties, which bills itself as the country’s largest privately held manufactured home community owner with assets of more $6 billion, and Michigan’s Sun Communities, 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 Capital Management.
Representations 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.
The mobile homes 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 defendant’s 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.
