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

Overview

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

Renters say hidden Zillow listings make it harder to afford living in New York City.

Details

This week, two New York City renters filed a class action complaint alleging that a brokerage business called Compass—which has been boycotting posting listings on free digital platforms like Zillow—has now delisted so many rental units that it has created a fake supply shock that is artificially raising rents.

According to plaintiffs, Peter Castaneda and Haley Gelfand, Compass has bought so many brokerage firms over the past decade-plus that it maintains a monopoly, controlling “over 80 percent of the rental unit listings available for renters in Manhattan based on 2025 data.”

With that monopoly, Compass can “literally dictate pricing for as much as 80 percent of Manhattan’s rental units,” renters argued. And now, Compass is allegedly trying to manipulate prices on other platforms, as well.

Supposedly scheming to raise rents in order to raise broker fees often pegged to rent prices, Compass went to war with Zillow, the most popular free real estate platform that never charges broker fees.

In New York City, a Zillow-owned platform called “Street Easy” makes it easier for New Yorkers to find a unit without paying a broker fee. However, seemingly hoping to force more people to turn to brokers to find homes that couldn’t be found on free platforms, Compass started delisting thousands of homes from Zillow earlier this year. Renters’ complaint cited a Compass “playbook” that allegedly “involves hiding listings from the public” in an attempt to “enable its own agents to double-dip to increase revenue per transaction, boost its stock price, and effectively ignore the consumer.”

In response to the mass-delistings, Zillow announced new standards excluding those private listings from ever appearing on its sites. That move was designed to curb the practice of hiding listings, since sellers likely wouldn’t want to lose the option of listing on Zillow if brokers can’t find a buyer. But the retaliation prompted Compass to file an antitrust suit, claiming that Zillow was the one trying to monopolize listings. However, Compass voluntarily dismissed that suit in March after a judge ruled that Compass was unlikely to succeed on the merits, writing that it seems clear that Zillow can’t have a monopoly if home buyers like to research across different platforms.

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, 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.”

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 Street Easy exists to give every renter and buyer access to every available home, we support efforts to bring accountability to these practices.”

As regulators eye the situation, Compass’ fight with Zillow has already increased rents in New York, Castaneda and Gelfand alleged. For Castaneda, signing a lease for a one-bedroom in downtown Manhattan this August set his monthly rent at

“This price differential, or a portion of it, would not have existed but for the severe reduction in public listings of rental units on Street Easy, 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 Real Page, 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 Street Easy), and through price comparisons of other similar units on publicly available platforms, such as Zillow (and, therefore, on Street Easy).”

“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 Real Page, 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 Street Easy), and through price comparisons of other similar units on publicly available platforms, such as Zillow (and, therefore, on Street Easy).”

Allegedly, Gelfand watched that price increase in real time. Using Street Easy 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.

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Key Takeaways

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

• Renters say hidden Zillow listings make it harder to afford living in New York City

• This week, two New York City renters filed a class action complaint alleging that a brokerage business called Compass—which has been boycotting posting listings on free digital platforms like Zillow—has now delisted so many rental units that it has created a fake supply shock that is artificially raising rents

• According to plaintiffs, Peter Castaneda and Haley Gelfand, Compass has bought so many brokerage firms over the past decade-plus that it maintains a monopoly, controlling “over 80 percent of the rental unit listings available for renters in Manhattan based on 2025 data

• With that monopoly, Compass can “literally dictate pricing for as much as 80 percent of Manhattan’s rental units,” renters argued