Wow, this is a brazen price collusion. No doubt about it. Using private data to fix prices and asking landlords to keep units vacant rather than decrease rents.
On the other hand, if the system recommends keeping units vacant, that does start to suggest that it is enabling landowners to take advantage of monopolistic pricing power. Yet higher vacancy rates could actually be socially optimal as well. A similar phenomena occurs in the movie theater business. Theater owners often price tickets such that the "vacancy" rates (empty seats) are quite high. However, a law that required pricing tickets low enough to fill all seats would reduce the return on equity in the industry so much that investment in the theater industry would plummet, vastly reducing the number of theater seats available available to fill consumer demand in the medium to long term.
Lo and behold:
“To arrive at a recommended rent, the software deploys an algorithm — a set of mathematical rules — to analyze a trove of data RealPage gathers from clients, including private information on what nearby competitors charge.”
Dark times if the FTC isn’t picking this up.
While there are anti-competitive concerns with this kind of system, one of the points I was trying to make is that a problem requires more than there be simply a 'feedback loop'.
Even in a market with 'perfect' competition, there can be feedback loops: e.g., an individual farmer might price their grain by checking the current market price which is tracked by a third party, and that third party determines the 'current market price' by querying the prices set by all farmers. The reason this isn't necessarily anti-competitive and can be compatible with 'perfect' competition is due to the other characteristics of the market (all participants are price takers, etc), not due to a lack of coordination between producing firms and market analytics firms.
In my part of the world rents are often very naively indexed, say with CPI or CPI+. That is currently an issue, but usually pretty well functioning. Any individual has no influence on the CPI. So the CPI has a feedback loop, but no characteristic of influence.
In an AI world that characteristic of influence is indeed not clear at first. I can only expect this to be a pretty dark AI considering the 'Great Succes' it is for the owners. I expect it to vacuum data from brokers in order to calculate a "willingness to pay" combined with a "propensity to pay" to calculate individual and portfolio optimal increases.
How is this (/ could this be) collusion? Because the rent increase on property X1, owner Y1 (that is private information, at least I presume for the US rental contracts are 1-on-1 and not public information) is input for all the distributions over properties X and owners Y.
I think your point that other market characteristics have a large impact on collusion (yes / no / degree) is subtle as well.
This sounds like a nonsensical economic argument. Do you have a mathematical model that supports this argument?
It's up to the landlord to negotiate based on his individual situation (condition of the unit, demographics, furniture, etc)
Not different from a company asking for "market data" regarding salaries and use that to _guide_ their salary offers to new candidates
In the end the company will adjust their recommendation based on results/feedback from candidates (some companies could be popular/well liked and get away with lower compensation, and vice versa)
You can only outbid someone if you have more money than them. The lower on the income scale you are, the less this is an option, until it just stops bring an option at all!
Not to mention, it is drastically unfair and inhumane to consign people to live in the streets simply because they are poor, or simply poorer than the next. Rent control gives a measure of dignity to the poor, and ensures that -- at least a little bit -- when times get hard, we all suffer, the rich renters and the landlords too, not just the poor renters.
Until you have to actually pay the rent you bid.
> if supply doesn’t match demand, you just go homeless
This is true in both situations. Only in the second case instead of whatever rich asshole wants to move there getting the rental, the people who have lived there for decades already do.
Now take those decisions en masse: you want a city with a healthy economy, but the city is now stuck since it’s labor resources become illiquid along with its rental market. Now, some people want that, but HN readers (I think?) will be biased towards vibrancy.