Lawsuit Alleges Compass Created Fake Supply Shock in NYC Rental Market by Delisting Units

Lawsuit Filed Against Compass

Two New York City renters, Peter Castaneda and Haley Gelfand, have filed a class action complaint against the brokerage firm Compass. The lawsuit alleges that Compass has intentionally delisted numerous rental units from free digital platforms, including Zillow, to create an artificial scarcity in the market.

Allegations of Market Manipulation

The plaintiffs claim that Compass, through its acquisitions over the past decade, holds a monopoly, controlling over 80% of Manhattan's rental unit listings. This dominant position, they argue, allows Compass to dictate pricing for a significant portion of the market. The lawsuit suggests Compass's actions are an attempt to manipulate prices and increase broker fees, which are often tied to rental costs.

Conflict with Zillow

The complaint details a conflict between Compass and Zillow, specifically its NYC platform StreetEasy. Compass reportedly began delisting thousands of homes from Zillow earlier this year. Renters allege this was part of a 'playbook' to hide listings from the public, forcing renters to use brokers and allowing Compass agents to 'double-dip' on revenue.

Zillow's Response and Prior Legal Action

In response to the mass delistings, Zillow implemented new standards to exclude private listings from its sites. This move aimed to discourage the practice of hiding listings. Compass then filed an antitrust suit against Zillow, accusing it of attempting to monopolize listings. However, Compass voluntarily dismissed its suit in March after a judge indicated that Compass was unlikely to succeed on the merits, noting that Zillow could not have a monopoly if consumers research across multiple platforms.