Compass Faces Lawsuit From New York Renters as Congressional Scrutiny Mounts

As Congressional scrutiny on Compass Inc. mounts, two New York City renters have filed a lawsuit accusing the brokerage giant of monopolizing the city's rental market and driving up rents.

Plaintiffs Peter Castaneda and Haley Gelfand say that Compass, the world's largest residential real estate broker, seeks to monopolize the market for rental units in the region after the brokerage reportedly called on its agents to remove their rental listings from Zillow-owned StreetEasy.

With its acquisitions of Anywhere Real Estate, Century21, Coldwell Banker, Sotheby's International, and other affiliated names, Compass now controls 80% of the rental unit listings in New York, according to industry estimates cited in the complaint.

The complaint alleges Compass is using that market power to "intentionally cause an existential surge in the price of rental unit-specific apartments," according to the complaint, which cited declining inventory and rising rental prices in the city.

This comes as Congress seeks to probe whether Compass is engaging in anticompetitive practices related to its "Private Exclusives" real estate listings, which are only available online to Compass clients. Realtor.com® first reported this month that Sen. Elizabeth Warren (D-MA) sought information on Compass business practices, after a Republican in the House sent the company a similar request.

Compass CEO Robert Reffkin has defended the business, saying the brokerage is actually "bringing competition" to the traditional model of marketing homes through a multiple listing service.

In the New York lawsuit, the two plaintiffs are seeking class-action status, according to the complaint filed Aug. 19 in the U.S. District Court for the Southern District of New York. If the court certifies the request, other similarly-situated renters could join the action.

The class sought by the plaintiffs would include people in the New York metro "who have leased non-rent stabilized, multifamily residential real estate units" from August 1, 2026 through the present.

"New York City’s affordability problem has escalated from a challenge into a crisis," Blake Hunter Yagman, the New York-based lawyer representing the two, tells Realtor.com. "The biggest financial burden for most New Yorkers is the ability to pay rent each month; and our lawsuit aims to restore competition so that renters have full access to the supply of available apartments across the city."

Compass declined to comment. It has not yet answered the lawsuit in court.

New York's tough rental market

Castaneda and Gelfand said in the complaint that the rent in New York "is artificially higher than they otherwise would have but for the Defendant’s conduct."

According to the complaint, Castaneda and Gelfand each signed a lease for $5,270, which they claim is artificially high.

The Realtor.com New York City Rental Report from the second quarter of this year shows the median asking rent in New York City registered at $3,707, an increase of $164 (4.6%) compared to a year ago and the highest on record.

The median asking rent in New York City was up 30.5% from 2019 levels, compared with just 16.4% gains nationally in June over the same time period.

As well, many renters feel trapped because of the costs to relocate, as rents for new leases are often higher than those for tenured renters.

Scrutiny in Washington

The lawsuit comes as both chambers of Congress want to speak to Compass and Chicago-based multiple listings service Midwest Real Estate Data (MRED).

In July, Rep. Scott Fitzgerald (R-WI), chair of the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust sent letters to both Reffkin and MRED's CEO seeking a hearing on their business practices on Capitol Hill.

A few days later, Warren, ranking member of the Senate Committee on Banking, Housing and Urban Affairs, asked the two companies to provide more information on the MRED partnership.

"Your partnership threatens 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," Warren wrote in the letter, which was obtained by Realtor.com. "I am concerned that this move will increase industry consolidation and harm consumers by driving up housing costs and worsening inequalities in the housing market."

In April, Compass and MRED, the multiple listing service for the Chicago area, announced a deal to distribute Compass Private Exclusives listings nationwide through the MRED database, which has historically operated only as a regional service. Such private listings are not easily visible to the public online, and are instead primarily marketed to clients within the network.

Warren in her letter raised concerns that the Compass deal with MRED “increases risks of civil rights violations,” including violations of the Fair Housing Act, which prohibits discrimination in housing transactions. Warren's letter gave Aug. 21 as a deadline to respond.