Hidden Zillow listings created fake supply shock, raising NYC rents, lawsuit says

Meanwhile, local and federal authorities have launched antitrust probes to investigate how Compass may be harming real estate markets. Behind one probe is US Senator Elizabeth Warren (D-Ma.), who thinks Compass may be threatening to “create a two-tiered housing market where insiders pay for exclusive access to housing inventory and market data, while everyone else is shut out.” An attorney who represents renters, Blake Hunter Yagman, told Ars that plaintiffs are looking forward to having their case heard in court. “When a titan of an industry decides to choke off supply of an essential good or service, like housing, the implications can be swiftly vast and severe,” Yagman said. “New Yorkers already are facing affordability challenges which have evolved into a crisis—and that crisis is only compounded by high rent prices, which is the largest bill that most of us have to pay.” Compass declined Ars’ request to comment. But Zillow’s spokesperson weighed in on the class action complaint, telling Ars that, “when listings are deliberately hidden from public platforms, real consumers pay the price. This summer, New Yorkers have seen exactly that play out, with one dominant brokerage deciding which homes people get to see and further squeezing the NYC market during a housing crisis. Because StreetEasy exists to give every renter and buyer access to every available home, we support efforts to bring accountability to these practices.” “This price differential, or a portion of it, would not have existed but for the severe reduction in public listings of rental units on StreetEasy, where apartment rental prices are adjusted according to the law of supply and demand on the platform,” renters argued, while emphasizing that rent prices are sensitive and can change day to day. To back their claims, they noted that: “Those who set rent prices (e.g. rental community administrators, owners of apartments, and others) set prices through various means which respond to supply and demand; these means include algorithms (including RealPage, which is used by the majority of rental communities in the United States), price setting tools, (including those which can be found on Zillow, and, therefore, on StreetEasy), and through price comparisons of other similar units on publicly available platforms, such as Zillow (and, therefore, on StreetEasy).” Allegedly, Gelfand watched that price increase in real time. Using StreetEasy from July 2026 until she signed a lease in early August, Gelfand said the prices went up before she, too, agreed to pay a seemingly supracompetitive monthly price to rent a one-bedroom in downtown Manhattan for $5,270. Their complaint cited data showing that across all areas of New York, available rental units have dropped 40 percent in the past year. Market reports suggested that drop corresponded with a 3 percent increase of rental prices in June, which was quickly doubled to a 6 percent increase in July, as available units continued to decrease through August. “As a matter of fact, Compass’ ‘strategy’ has intentionally caused an existential surge in the price of rental unit-specific apartments in New York City,” renters alleged. “The cause of this is that apartment inventory has precipitously dropped, creating a supply shock.” Renters argued that Compass’ behavior, which Warren described as “anti-competitive,” is “already driving up housing costs and worsening inequalities in the housing market in New York City.” They think Compass should have to disgorge unjust enrichment and pay damages for artificially raising rent prices. They seek to represent “all New York City renters who have leased non-rent stabilized, multifamily residential real estate units from August 1, 2026 through the present.” They also want an injunction blocking Compass from hiding listings from platforms like Zillow. “Renters in New York City already spend more than 30 percent of their income on rent—a ‘threshold economists classify as unaffordable’—and prices continue to rise, making the dream of living in New York City ever more out of reach,” renters argued. They alleged that there is no procompetitive benefit for Compass to hide listings and noted that Compass’ alleged anticompetitive conduct also hurts the labor market by depriving other non-Compass brokers of commissions. “This not only deprives Zillow of the ability to feed a significant amount of rental unit listings to prospective renters and drives Zillow’s profitability into the ground, but it forces renters to pay brokers fees to Compass and only Compass when those renters ordinarily would not pay any brokers fee at all or, alternatively, would have had real estate agents from competitor firms who would split commission-based fees with Compass,” renters argued. And that’s particularly harmful, since data shows 45 percent of real estate agents “cannot or are struggling to pay their own rents,” plaintiffs said.