Big landlords used software to collude on rent prices, DC lawsuit says
arstechnica.com
arstechnica.com
Did anyone try to challenge pay benchmarking in court?
Not an attack, but isn’t that almost the same logic they’re using?
My very simplistic take on this...
- offering a sampling of current rents in the area for $50/month [not price fixing]
- offering a sampling of current rents in the area for $50/month, and then facilitating collusion between land-lords, and also pressuring landlords to adhere to rent rates [price fixing]
Obviously, there's a lot more nuance there, and I'm not a lawyer, but seems to be the gist of it.
You don't recognize an analogy?
The issue at hand is that the company required at least 80% compliance with their pricing suggestions as a stipulation of using the service. This gave them the ability to influence the market. If you didn't accept their listing recommendation 80% of the time, they kicked you off the platform.
Want to create an illegal taxi company? Just make it an app. Want to discriminate based on race? Hide it behind facial recognition and predictive policing. Collude for wage suppression? Create a wages database and "suggested wage" for HR. Want to copy other people's art but need to file off the serial numbers? Dali has your back. Copy other people's code without a license? AI is on it.
https://arstechnica.com/tech-policy/2020/06/detroit-police-c...
this stuff has been simmering before AI got branded.
it's definitely AI washing.
Or gate employment on requiring college/high level academic degrees.
This most likely means that they have a surfeit of applicants and want to cull the herd, or that they aren’t serious about hiring (or at least about hiring someone who is actually qualified).
Very few jobs actually require the knowledge gained during an undergraduate degree, much less what is learned during a master's.
You can even view the climate catastrophe etc and environmental contamination issues and other things as a manifestation of this. Our industrial scale has outpaced our system’s willingness to regulate, and agile corporate structures using this tech advance at a decidedly linear or exponential pace while the government agility trends towards zero.
It is better to have systems that bias towards someone being able to rule, and then we can work on making sure the system decides that someone in a fair way, rather than biasing towards gridlock unless every possible dimensionality of the population (as represented by the various branches and chambers of government) all absolutely 100% concur. Obviously it would be silly to require 100% concurrence, but if you require that five different dimensions of society all agree at 70% threshold then you have effectively required that level of agreement anyway. At some point this leads to social collapse.
https://en.wikipedia.org/wiki/Liberum_veto
Since the US has a unique geographic position which makes it effectively invulnerable this will take the form of internal rot, stagnation, and gridlock until a sufficient crisis pushes us over.
And really those are both just two sides of the same coin anyway, it is pretty obvious to me that over-biasing to inaction is just as dangerous as over-biasing to action in general, and especially inaction may be particularly dangerous as we move into a century where things are ever faster and the consequences are going to be very very real.
> Some say the world will end in fire, Some say in ice. From what I’ve tasted of desire I hold with those who favor fire.
> But if it had to perish twice, I think I know enough of hate, To say that for destruction ice Is also great. And would suffice.
https://www.propublica.org/article/yieldstar-rent-increase-r...
Separately, I find it sad that CEOs are thinking topline only and not thinking about their bottom line. The CAC for all new renters is not fixed costs, its variable, and increasing CAC vs leaving it close to 0 (and reducing related payroll) would be a viable strategy for a lot of buildings.
CEO just haven't done the hard work/math
I didn’t find anything usable. Could you send a URL for data for a company who wants to understand cash plus equity competitive positioning relative to the top 10 highest-paying large SWE employers?
Every once in a while, one law firm will defect and raise salary, and every other law firm will update theirs within a week to the new rate.
after this initial hire, your salary growth (and segue to lucrative partnership) will be based on your performance and how much they want to keep you, again, undermining the notion that you are somehow locked into an oppressive system.
It seems like you want to have some unrelated debate about what group is more oppressed than other groups.
>after this initial hire, your salary growth (and segue to lucrative partnership) will be based on your performance and how much they want to keep you, again, undermining the notion that you are somehow locked into an oppressive system.
as a point of clarification, Biglaw salaries is fixed for associates up to 8th year. Yes they can still be fired, yes they can be made partner. Yes they make more than an Afghani dirt farmer.
RealPage required 80% acceptance minimum of their pricing quotes. They required written reasoning and approval from someone at RealPage to change the price of a unit.
If you went under 80% they kicked you from the program.
Applied for an apartment and was accepted. Before signing my lease rent in all the other units were lower by $300-400. Asked about it and well... "The computer sets the prices, we can't change that. We can move you to a different unit though."
Suddenly the unit I applied for is back on the site at the new lower price...
This was at a complex that proudly had the realpage logo on their homepage.
Renewal offer was $600 more after a year (~25% increase).
They wanted to ask me why I was moving out...
I pointed out my car had been vandalized twice and they shrugged. I did this a few times with various things (gunshots, water pouring on my head during an interview..., my water heater blowing up and them keeping me waiting for 2 days on a replacement) and they basically shrugged off everything and kept insinuating that they would be withholding my security deposit no matter what.
Final thing I mentioned was the original RealPage lawsuit... suddenly they want me out the door asap and promises of my entire deposit back...
The whole "efficient markets" theory goes for a toss when large corporate landlords representing a disproportionate share of the market are all able and willing to just sit on empty units and take temporary losses while prices steadily go up.
If anything, the large buildings in nyc call for corporate landowners instead of every day people renting second homes.
So... I don't think they're as different as you think.
When I think of corporate landlords I think of publicly traded apartment managers like Avalon. Those exist in NYC but it’s not the most common type of rental at all.
Hell, I think Realpage actually has several different single-family software titles (they tend to do lots of acquisitions).
This isn't 1982, no one wants to manage this crap on paper, or in some craptastic Excel spreadsheet.
A sufficiently high property tax would fix incentives very quickly.
Imagine a hypothetical scenario where tax is $1,000 per month, the cost of hosting a tenant is $500 per month, and prevailing rents are $1,500. –– You can accept a tenant right away and break even. Or you can wait a couple of years until someone agrees to pay $2,000 per month. Which do you choose? Spend $18,000 to wait and then make $120,000 in the following 20 years, or spend nothing now and make $0 in the following 20 years?
On the flip side, if the tax were only $500 per month then you could accept the tenant willing to pay $1,500 right away.
You have your cash flow now, and your potential customers now. If it is a money losing money proposition, you can sell. If you want to bet on prices in the future, you can, but the higher the property taxes, the worse that bet is, and the less likely it is to be made.
While it does not speak to selling, it doesn't ignore it. It is factored in.
> Why not wait 5 years for $5k?
Well? Don't leave us hanging.
> If it is a money losing money proposition, you can sell.
And then what? Maybe in recent months the tide has started to turn, but over the past 10+ years interest rates were effectively 0 for a reason: Nobody had any idea what to do with money. Interest rates are a product of supply and demand like everything else. Real estate is the last resort where money goes when all other ideas have been exhausted. If real estate is what you are invested in, you got there by not having better ideas.
Wait 100 years for $100k…it is meant to show why your scenario makes no sense.
> And then what?
And then someone who does want to do something productive with the property purchases it. Such as a homeowner, to live in.
> but over the past 10+ years interest rates were effectively 0 for a reason: Nobody had any idea what to do with money.
This is getting off topic, but interest rate and monetary and fiscal policy is a political thing. At least one person (me) has an idea of what to do with money. Providing kids with healthy meals at school would be a start.
If you have something to show, I'm interested. Why hold out on us?
> And then someone who does want to do something productive with the property purchases it.
And now the former property owner has nothing. What's the point of them going to all the trouble? I am sure they would rather use that time to post on HN, like you and I have the luxury to.
> but interest rate and monetary and fiscal policy is a political thing.
Interest rates are adjusted in accordance with certain political goals, yes, but they are adjusted in response to behaviour. Rates were lowered because people weren't looking for money, not that people stopped looking for money because interest rates were low. Basic supply and demand.
> At least one person (me) has an idea of what to do with money. Providing kids with healthy meals at school would be a start.
And if you invest wisely, you'll have even more money to help with that! So, we're back to trying to figure out what to invest in. Any ideas?
I'm being dense; how have you factored that in?
I agree that a higher tax will might not resolve the situation. I also think that a lower tax would not, either. First, some math:
((years_rent * months * rent) - (years_hosting * months * hosting)) - (years_tax * months * tax)
The cost of renting immediately at $1,5000/mo and $1,000/mo tax:
((20 * 12 * 1500) - (20 * 12 * 500)) - (20 * 12 * 1000) = $0
The cost of renting immediately at $1,5000/mo and $500/mo tax:
((20 * 12 * 1500) - (20 * 12 * 500)) - (20 * 12 * 1000) = $120,000
The cost of losing 2 of the 20 years while speculating for a $2,000/mo renter and $1,000/mo tax:
((18 * 12 * 2000) - (18 * 12 * 500)) - (20 * 12 * 1000) = $84,000
The cost of losing 2 of the 20 years while speculating for a $2,000/mo renter and $5,000/mo tax:
((18 * 12 * 2000) - (18 * 12 * 500)) - (20 * 12 * 500) = $204,000
This shows that a lower tax is more profitable. The case where profit is <=$0 exists, but the the speculation also generally increases profit if we're just ignoring the part about it being speculation (with risk of never filling a spot or not having cash flow). A solution might be to lower taxes, but the incentive to speculate is still present (would you rather $84,000 or $204,000?). A better solution would be to punish the speculation directly. A variable tax rate where the unoccupied unit is taxed higher might accomplish this.
The same thing happens in new "luxury" buildings in LA. Poorly constructed, barely occupied, but resets the rent in the neighborhood and can afford to be at 50% occupancy for 2 years+ until folks capitulate.
The roles of human leasing agents has to have changed greatly at these companies; my guess is they are more administrative now, with much less interaction with the tenants.
It's awful.
> The surge in apartment construction is softening the Class B market more than any other asset class. In high-supply submarkets, Class B rents fell more than twice as much as Class A over the past year. Yet in submarkets with no new supply, Class B performed right in line with Class A.
https://www.realpage.com/analytics/class-b-market-softening/
This is pretty much in line with what economists everywhere are telling us:
https://www.washingtonpost.com/opinions/2023/10/20/housing-s...
Not to defend the company; if they caught them trying to fiddle things, throw the book at them. But I just don't see their software being powerful enough to manipulate prices that far out of line with the market. You can't charge San Francisco prices in Baltimore.
Of course, people want a Big Bad, a bogeyman to blame for the housing crisis, not 100's of small decisions in their city and state regarding zoning and taxes and so on that has shaped the North American city over the past 100 years.
It becomes an issue if a group of landlords agree not to rent below a certain threshold in a community. This is classic price fixing - leaving renters no alternative other than paying the minimum rate set.
This is exactly what's happening, though. Landlords using RealPage/YieldStar are required to follow its guidelines and need permissions from the company to make exceptions. It's technology mediated collusion to price-fix.
Heavily disagree. There is everything wrong with that. Housing should not be an investment or a profit source at all
Who would build housing, then?
> We get it, you have rentals
Nope.
It's fine if people make a profit at providing essential goods as long as there's enough surplus to redistribute to those who markets can't reach.
No one complains about farmers profiting from farms. We care about people going hungry, so we buy some food from tax revenues and help feed them.
I don't see the possible parallel with farmers, all there is in common is land potentially owned as property. Farmers bear fruits through labour. Real estate investors bear returns on capital.
That's interesting you mention some people going hungry, most people's inability to slap logs together to make shelter, and resorting to tax collection and distribution.
There have been many attempts to eliminate bearing returns on capital. They all resulted in a prostrate, non-functioning economy. There are two input requirements for a functioning business:
1. labor
2. capital
Neither can come for free.
I also disagree, it isn't right.
While real estate is commonly accepted as one of the prominent investment type of asset, it has been challenged with excellent arguments against it.
That's like saying there's nothing wrong from profiteering during a crisis. Are you for stores drastically increasing prices on essentials like water and food during a natural disaster?
Here's the thing. When there's a natural disaster, it used to be that everybody outside the disaster zone would fill jerry cans with gas, load up their pickup trucks with supplies, and immediately drive into the disaster zone and sell it with high prices. They'd get there far faster than the government.
With the anti-gouging laws, nobody bothers doing that anymore.
The result is (pick one):
1. no anti-gouging laws. Gas and supplies are available.
2. anti-gouging laws. No supplies are available.
In which case are the people needing supplies better off?
Do you really think that's better?
With 2. We can look into the application of these laws and figure out why nobody is picking up the opportunity to reasonably profit by making gas and supplies available.
Profeetering is defined as taking advantage of a situation to increase prices beyond "reasonable"
The law is clear with one thing: profteering by committing a crime is legally wrong.
It leaves us with cases where no crime was committed. But this post argues collusion happened in the case of property let pricing. let's not make the gasless situation the rule to the exceptions.
A reasonable price is what people are willing to pay for it. It's that old Law of Supply and Demand again.
> The law is clear with one thing: profteering by committing a crime is legally wrong.
Enjoy the inevitable resulting shortages, then.
BTW, anti-gouging laws also cause hoarding, making the shortages even worse.
All illegal tactics.
But I give it to you, bureaucratic measures have shown again and again to have even more nefast consequences than business criminals doings.
"unreasonable pricing" is a nebulous undefined concept.
> hoarding
Hoarding only happens when the government tries to repeal the Law of Supply and Demand. It is not a natural state of free markets.
Whenever the government tries to repeal the LoS+D, all kinds of worse consequences result.
It applied in Communist countries, too, and nobody tried harder to repeal it than they did.
> Watching the American brand of capitalism rot slowly from the inside
Caused by the constant misguided attempts to repeal the LoS&D. Rent control is a n illustrative example.
> Not everyone is after a buck
Not enough to run a working economy on.
The reason supplies aren't available is the local supply is out of action from the disaster, and nobody has any incentive to bring supplies in to the disaster zone.
Scalping by definition causes a shortage due to speculators buying up large quantities of something with the plans of selling it at an inflated price caused by a lack of supply.
It isn't the only reason, but saying it doesn't cause shortages is absurd. Availability of things like masks, hand sanitizer, and toilet paper rapidly recovered once people who drove across entire states emptying shelves were shut down.
https://www.nytimes.com/2020/03/15/technology/matt-colvin-ha...
The only purpose to scalping is reselling it. Not taking it out of supply.
> caused by a lack of supply.
Scalping neither increases nor decreases supply.
> Availability of things like masks, hand sanitizer, and toilet paper rapidly recovered once people who drove across entire states emptying shelves were shut down.
People were hoarding, not scalping. And they were hoarding because stores were not allowed to increase the price.
They were hoarding items in high demand with the intention to sell them way above market rate. If only there was a word for that...
It's called "arbitrage" and is a normal part of a functioning market.
So yes, there is something wrong with it. Instead of letting the prices float to the settling rate of the market, they're being manipulated to reach a specific financial goal.
That is morally reprehensible, especially when it comes to shelter.
> The collaboration "amounts to a District-wide housing cartel," Schwalb said, noting that "well over" 30 percent of buildings with five or more units use RealPage's software, along with 60 percent of 50-unit-plus buildings. Across a wider Washington-Arlington-Alexandria area, more than 90 percent of units in large buildings are subject to RealPage pricing, according to Schwalb's office.
I'm not here to defend them. It's possible that, at the margin, their system helps gouge renters a few percentage points. They should be stopped from doing that.
But the broad wins are still with abundant housing.
As with much else, it's not either or... build more, and put a stop to this kind of thing if they find they are able to manipulate markets.
What I mean is the casual observer wondering why housing prices are bad. Blackrock, AirBnB, this outfit... people want to blame someone besides the local and state politics that got them where they are:
https://www.theatlantic.com/ideas/archive/2023/01/housing-cr...
If it were easier to build housing, someone would always eat the margin here. Lead times are short these days since you can have a lot of stuff prefabbed. The hard part is usually permits and the like. You can put up a new apartment tower in a year given that permits will be zero problem.
I think even wood-framed CLT type buildings can go up in that time frame. A precast concrete building could be done in half that time or less.
It should be be the same deal for landlords. Using this site should constitute evidence of collusion and multiply the penalties.
Essentially isn't the company at this point just acting as a market maker, by figuring out the market clearing price where as many units as possible are filled at the highest price?
Did it? Or did ZIRP?
People aren't going to sit around losing money if central banks aren't guaranteeing your asset price (on leverage) is going up about 4x your interest rate.
at this point, a lot of them are not adjusting rent down because it will reflect on their property value, which is an additional hidden variable in the equation.
It should not be profitable to keep property empty. It is a drain on society.
This does not factor into any calculation about housing prices, unfortunately, and will likely never be factored in until there's a literal revolution (highly unlikely).
Just like pollution, the homeless are either ignored or bulldozed out of sight and out of mind.
https://www.c-loans.com/loan-to-value-ratio-for-commercial-l...
You can only be certain this strategy works when you know the competition is doing the same. If you have a formal arrangement to coordinate pricing with competitors, you are deep in collusion territory.
Yes. And it is also amoral. There is a limited supply of housing. Holding it vacant is restricting access to one of the very most critical human needs there is. It might look better on the balance sheet but it is worse for humanity. Thus, the need for regulation and legislation that prevents this sort of thing.
So the correct action would be to introduce cost for keeping units unrented. Personally I'd go with probabilistic approach and just penalize owning large amount of property because the more you have the higher chance is you are letting some of it go unrented. And property ownership is way easier to check than determining if some property is occupied or not.
There's already a cost of keeping them unrented - the loss of rental revenue.
If you've ever tried to sell a house and had it sit vacant for months when trying to find a buyer, you'd find out about that cost.
Right. And observing the market shows us that this cost is too low.
Why would I ever sell an empty unit if it appreciates in value faster than it costs me to keep it? Provided that I have no better opportunity to use that capital, which must often be the case.
If you need capital it's another story. But even in case of a single home, the fact that you can sit on it for months instead of lowering the sale price means it's to cheap to keep it if you don't need it.
Well, in a working market, you'd have more supply get built up by developers and those landlords would lose pricing power. Or it could still fail in the other direction, people would find the area too expensive and find jobs elsewhere. I think my take here is if the landlords each had, competent, ruthless capitalist employees, they would end up setting the price just as high as RealPage, because RealPage doesn't actually have any kind of mechanism to enforce compliance with the cartel structure.
Actually as others have noted, they do. Don't use their prices at least 80% of the time, and you get kicked off.
That’s the collusion — preventing landlords from lowering prices from competitive forces.
If this were true, it should be easy to find the terms of the contract the spelled this out. They didn't. What they found instead what an out of context quote that vaguely sounds like that, but is more likely expressing that if you want to profit from our recommendations, you actually need to follow them.
No, because the software was recommending leaving units unfilled. Rather than being like doing market research on craigslist, using this site is more like everybody hiring the same consultant to set their prices and vacancy rates, which does feel a bit like laundering the collusion.
In kaibee's first paragraph, there's a missing question: Is it collusion to pay someone to set rates accordingly by using information and decision-making processes you yourself could not have gotten on your own?
I think this is the key. E.g., looking at Zillow could tell a given landlord that they need to charge more rent for a given unit. But looking at Zillow couldn't tell that same landlord to, say, keep that unit vacant for months in the hopes there is a multi-landlord unit-vacancy plan to increase prices across a city. And IIRC, these kinds of decisions have been made by a lot of landlords in a lot of these markets.
In fact, if I'm a landlord, I'm not going to take that risk unless I've got a good reason to believe that a) the software I'm relying on is used by the vast majority of other landlords, and b) the software is advising and strongly incentivizing everyone else to do the same thing. (And possibly that there are penalties if the other landlords don't make that move.)
The same thing happens with amazon stealing vendor business, and arbitrarily banning people without legal recourse. When you set the market, you can't be allowed to dictate who participates.
Its the same core problem. These private marketplaces grow to the point where everyone depends on them and then shenanigans ensue
And this is at hotels. Our solution? Force all hotel guests to checkout before reaching the statutory number of nights that afford them tenant protections. Which is massively inconveniencing responsible people, all because the government wants to protect scammers.
Politicians should be providing housing to people if they want them to not be homeless, or paying the housing vendor. It’s easier to get elected by promising housing and low taxes though, and punt the costs onto select portions of the populace who play a game of trying to determine who is going to use the laws to scam them, which ends up resulting in discrimination.
Obviously, free too much of anything skews incentives. But the consequences of homelessness should not be borne by select portions of the population.
It is absolutely impossible to ensure good faith and lawful process by having the landlord make an unverifiable assertion followed by the cops kicking people out a week later. This isn't enough time to schedule a hearing let alone have the counter party getting representation. Furthermore factually society as a whole is better off as a whole if we have fewer people with crashed lives living like hobos on the sidewalk so its advantageous for such a process to be orderly and slow enough that people land somewhere other than flat on their back.
People staying long term in hotels is an extreme edge case we shouldn't optimize the rest of the system for.
What the law is telling you is that if you offer long term tenancy you are a landlord even if you call yourself a hotel. This and your decision not to get into the landlord business both seem to me perfectly acceptable. To quantify this let me ask you a question.
How many of your folks staying over 30 days were planning on staying indefinitely? If the majority of the folks planning on staying 30 days were planning to leave in 90 perhaps the threshold should be increased to accommodate contractors and students who might need accommodations.
If most of the folks over 30 days are lifers then maybe the threshold is already accurately set.
Cool, then that “we” (government, voters, taxpayers), should pony up for all the time that a tenant ends up staying and not paying.
Otherwise, what “we” want is for a certain subset of society to subsidize not having people out on the sidewalk, as opposed to having it come from government coffers where everyone’s taxes would pay.
Another option is for the government to provide housing for people.
>It is absolutely impossible to ensure good faith and lawful process by having the landlord make an unverifiable assertion followed by the cops kicking people out a week later. This isn't enough time to schedule a hearing let alone have the counter party getting representation.
I disagree. We have computers, broadband, and electronic databases. It takes 2 minutes to prove if you did or did not pay someone.
Hell, in my case, I have an email from the squatter explicitly stating they will no longer pay unless they get a reduced price AND that they have done this to other hotels in the past AND that they waited until the statutory time passed so they could take advantage of eviction wait times.
Broadband and computers make it easier to transmit an unverifiable assertion prepared wholly by one side. The way you verify this is you have a human being listen to both sides.
Without this we wouldn't capture
- failure to keep proper records
- recording the payment in the wrong account
- inappropriate or illegal charges
- rent being legally withheld
- lost or stolen money orders including stolen by employees of landlord
- disputes over whom was supposed to get paid in situations where custody of property was disputed
- malicious lies
Again its pretty clear that your accommodations for the night and your home ought to be treated substantially differently. For 36% of American households their home is the linchpin of their life and livelihood. I don't think we ought to undermine a process essential to the lives of tens of millions of people to help out a couple of hundreds of low rent hoteliers deal with squatters.
We already normally deal with hotel guests who won't leave substantially different then tenants in most states usually by establishing a threshold beyond which one goes from A -> B and a simple process by which one removes unwanted guests different from the process to remove tenants.
I do have to wonder if complainants are dealing with situations arising effectively providing long term housing in fact if not in law eg slum level accommodations rented cheaply by the week or if the process of removing non-paying guests in hotels in your state is just well and truly broken and instead of fixing it you are suggesting breaking the process which tens of millions rely on instead for the benefit of mere dozens of hoteliers
And this should not take months. Otherwise, all this technology society has developed is all for nought. You can literally take a laptop or phone into court and login to bank accounts to prove payment. If someone wants to bribe or hack into bank servers and commit fraud, then obviously we can get higher powers involved at that point.
> I don't think we ought to undermine a process essential to the lives of tens of millions of people to help out a couple of hundreds of low rent hoteliers deal with squatters.
I agree, and the government should pay for it, not “a couple of hundred low rent hoteliers” (not sure what purpose the denigrating adjective serves, as if a business providing lower priced services is somehow bad for society).
> instead of fixing it you are suggesting breaking the process which tens of millions rely on instead for the benefit of mere dozens of hoteliers
I never suggested “breaking” the process. I suggested fixing the legal system, which is clearly understaffed or overly bureaucratic. And it helps everyone, not just a “few dozen hoteliers”.
What you (and current politicians) seem to want is a “few dozen hoteliers” to provide housing for free for the benefit of all taxpayers, allowing you to have lower taxes.
That bureaucracy is called process and it exists for reasons that are out of scope of your deadbeats.
> I never suggested “breaking” the process. I suggested fixing the legal system, which is clearly understaffed or overly beauricrafic.
There is no way to fix the process that would allow you to remove a long term tenant in a week and there isn't a political will to sink millions to billions into staff to allow such matters to be handle them much more expeditiously. Society wouldn't experience a net gain and has finite resources.
> not sure what purpose the denigrating adjective serves
It serves to identify the nature of the problem. You have a problem in that you are offering long term tenancy to people who don't qualify for long term tenancy other places. You are trying to do that by pretending its short term tenancy and are frustrated that the rules of long term tenancy applies. Instead of calling the cops to roust a trespassing guest who didn't pay for this 3rd day you are having to evict folks who can't or wont pay after months or years.
You have deliberately adopted a known broken niche and in a way are providing a valuable service to society and are pissed that society neither wants to fix the niche nor acknowledge that value.
So then society can pay the rent if it is determined that the tenant is not paying. Problem fixed.
The reason this does not happen is because society wants to get away with sticking certain subsets of the population with the cost who don’t have the political capital to fight it.
Also, the simple solution is that the government pays the rent only for time after the business files an eviction claim with the court. After that, the ball is in the court’s court.
The tenant caused your loss and you can't recover it from the people. Any such procedure would entirely break the model whereby landlords select tenants based on the expectations of remuneration. If the entire government could be made to bear the cost upon request of unpaid rent landlords would be substantially less apt to be careful in their selection.
This would be a good thing, usually people denounce it as “discrimination”. It’s why you “need” a credit card to stay at a decent hotel, it is a credit check by proxy because the hotel operator cannot count on the police to do their job and remove people.
These types of government policies only end up hurting poorer people who have no credit.
The legal system should exist to remedy legal disputes, for everyone, in a timely manner. Whether it be a big business or a small business or a personal dispute.
A clogged legal system where simple disputes take an inordinate time to resolve is a sign of decay and corruption. You end up with people losing trust in the system, so now you have an incentive to take advantage, because others are going to take advantage of you. And then it becomes a game of who you know (more than it already is), or taking matters into your own hands.
Now, our many long term hotel guest have to pack up all their shit after a certain number of nights and go stay at a different hotel. So society inconveniences productive people, and conveniences a scammer. Does not sound like a net win for society.
I don’t know if you are trolling, but if you are not, trust is worth a lot. Trust is what makes businesses in the developed world so productive, and lack of trust is what makes business so costly in the developing world.
One company I partly own sued a customer for nonpayment several years ago. Customer declared bankruptcy. Sucks for all the same reasons as your relatively tiny tenant dispute. At the next board meeting, we didn’t waste our time bemoaning the existence of bankruptcy protection—after all, we may benefit from it ourselves someday. Instead we developed plans for how to mitigate the risk of nonpayment in the future.
You run a business; act like it. Accept the inherent danger of swimming or get out of the pool.
I never wrote that I did. I merely provided an example showing the consequences of not having properly functioning courts.
I am not bemoaning protections for tenants. I am bemoaning not clearing the dispute for inordinate amounts of time. Which leads to discrimination.
> Accept the inherent danger of swimming or get out of the pool.
I would rather not see my country become the developing country my parents moved away from, hence spreading an opinion about this issue (which is broader than just tenant laws).
Because this benefits half the country we ignore the fact that its sucking the life out of the other half and celebrate the increase in household wealth for middle class folks. Meanwhile another group of vampires is waiting to suck the life out of these mom and pop landlords as they get old and overpay for medical services. Because grandpa lives to 95 instead of 90 there is no generational transfer of wealth other than to the financial services industry which acquired grandpas rental house cheap when he ran out of money at 75 and his house even cheaper at 90 in a reverse mortgage so he could stay in his house for a few more years.
40 years later housing medicine and education have broken the middle class even though the first increasingly builds tiny shitty apartments which fall apart, the second increasingly relies on nurse practitioners and other less than doctors, and the latter pays adjunct professors like burger flippers. Somehow even when those industries absolutely dominate normal folks paychecks not much of the money even seems to stick to the hands of the folks actually doing the work.
To say that prices are the result of a free market is both true and meaningless. Unmanaged free markets aren't really good for anything.
The practice of designing around existing patents is actively encountered.
In reality, the case against the landlords and RealPage seems stronger than that, but I find even the theoretical case interesting.
Data like Zillow's Zestimate may impact the prices that people start with, but supply and demand take care of the rest.
I think that the lack of housing supply in most markets and higher demand for housing is what is keeping prices inflated.
If anything, this shows how high prices _would have gone_ had the interest rates stayed low, given that they are still high with today's high mortgage rates lowering demand.
this is empty verbage -- the money supply is run by groups of people i.e. the tender is tendered by tenders. Those comfortable with double-dipping into the cash supplies and using it to boost asset prices, did so with gusto. The rest of society suffers with a small (governing,lending) few benefiting mightily. The "copium" statements by the intellectually uncurious, those who are benefitting, and those that are perpetrating, come off like this vacuous non-statement above.
Keeping adding people and not housing supply and prices will go up. Remove people and add housing supply and prices will go down
"The housing market" is, by far, individual home sellers. Home sellers without sufficient incentive to sell can afford to wait for a higher prices. They are getting massive utility from the house already, they live in it, they might have no reason to sell if they cannot get a sufficiently high price.
Barring loss of income, death, or something else that really motivates a home owner to sell, there is little reason for homeowners to sell the property at a price they deem too low.
Hence increasing supply is the only way to lower prices, because an empty house usually has has negative utility (property tax, maintenance, security, etc), so the seller (home builders) are far more motivated to sell it.
The auto world works a little different since there is an entire wholesale operation behind the scenes that also drives pricing. There are several alternatives to KBB although less targeted to consumers. Also way more standardized in condition reporting.... but I know too much about the industry.
I do think that the introduction of software has probably made price discovery more efficient and gives landlords more confidence that if they raise rents, they will easily have offers even if the current tenants leave.
For some of the more desirable and built-up urban neighborhoods, small individually owned properties are all but bought up and almost all of the units are in large complexes owned by large corporate landlords.
I live in NYC. The housing market sucks here - but I don't think its because of collusion in setting prices. The supply just isn't as high as demand (and millions of voters who already own property seem fine with that)
But if we consider that people would consider living in the larger commute area, the article says:
> Across a wider Washington-Arlington-Alexandria area, more than 90 percent of units in large buildings are subject to RealPage pricing
And these large building are the bulk of the housing stock in these areas, they're not competing with single family homes or duplexes in these areas.
I'm not suggesting an app couldn't help coordinate prices in this instance, but I am suggesting that as long as the buildings are owned by other people they still have strong incentive to compete with each other.
If I own a building and the app suggests I raise prices, but then the units don't fill, I'm just going to lower prices.
> If I own a building and the app suggests I raise prices, but then the units don't fill, I'm just going to lower prices.
Yes, but if everyone raises prices together, people won't just choose to be homeless. Collusion is anti-competitive because it ensures that the participants wont compete with each other on price. They all raise rates together so people are stuck: their rent went up, but so did rent everywhere.
In a competitive market, some will raise rates, some will keep them the same, some may drop them. Those differences in strategy is what creates competition. When everyone cooperates to do the same thing, it eliminates competitive pressure.
It would be interesting to see if how rent markets change if more data becomes available. In the auto-industry, a car dealer can offload the unit to the wholesale market to minimize loss, whereas a landlord is less liquid.
The inventory pressure is there in both situations. An unsold car after 30-60 days is a problem both because of typical retail business dynamics and additional factors with general vehicle depreciation and high maintenance overhead of a vehicle compared to other capital goods, but the exit strategy is there and risk exposure can be limited.
Adding transparency, and a tax incentive to fill vacant rentals, could make rent prices less sticky.
I would be surprised if this were the case. It's supply and demand. Imagine there are 20 houses available for sale in a small area. The Zestimate for each is 1.5M. But I see they are sitting on the market a long time, and I don't see a full open house. If I am going to bid on one, am I bidding 1.5? Nope. I am gonna bid way less because I perceive the market is in my favor (more supply than demand)
Opposite scenario. Only one house for sale. The Zestimate is the same 1.5M. The open house is mobbed. Am I going to bid 1.5? No, because I gotta bit higher if I want this house because the market is not in my favor (more demand than supply.)
The Zestimate is useful in the 2nd case because it tells me what a similar house in the area went for, so I have an idea of how much people are willing to pay, and go higher than them. But I am not going to actually bid high unless I see the market shape that way.
Or a house where the seller is dropping prices for many months will have the old data deleted, and the history only shows that it was just put up for sale at a lower price than before.
I don't know if this is a feature of MLS, but Zillow already had the data, so I cannot think of a reason that they would remove the data unless they wanted to hide the fact that the houses are not moving at the original prices.
BTW this is one of those cases where having an agent helps you. A good agent will be able to tell you "oh there's a lot of houses coming on the market, getting no bids, and coming off" if you don't pick up that insight yourself.
And it’s selectively deleted too. For example, one house, you can see the price reductions in 2010/2011, and then it never sold. And they tried selling again, and reduced prices, and once again, the house didn’t sell, but this time, all of the information about this year and last year was deleted.
Customers do the same thing. They look at price and shop around.
Collusion where a group agrees to charge more than the market price together is bad (and illegal). Its worse for the individual supplier as they could charge less and get more revenue, but done collectively can have a potential for a higher total revenue given everyone obeys. But there is always an incentive to cheat and make more individually while hurting everyone else collectively. Which is why the legally enforceable aspect is important
But these aren't the same thing
Get Apartment A to raise rents and enforce these increased rates.
Then go to Apartment B and say “look you gotta raise your prices to the market rate, apartment A is doing it so you can too”.
Then go back to A and say “hey the market can bear this price, why don’t you raise your rent?”
They also encourage owners to keep units vacant (which they should be able to afford if they’re getting prices to go up) rather than rent at a cheaper price.
So this feels like collusion to me. But they also say “Everything we do is legal!” - and if that’s the case we need better laws and regulation to avoid this type of behavior. It’s like a distributed cartel - you can’t charge SF rates in Baltimore but what if you could get Baltimore rates to go up by X% YoY with this tactic? Seems unfair.
...
If someone can figure out the con on a message board unrelated to real estate I'm pretty sure investors financing this stuff could figure it out as well
If they did the math after all the various factors are considered and this happened, then clearly this is the best play from their perspective. It's not even malice it's just "economic sense", except the way the economics works out just happens to screw people with barely enough money to afford rent.
That still doesn't mean they're not culpable under the textbook legal definition of collusion.
Louis Rossmann has made numerous videos about vacant properties where asking prices for rent are significantly above what he considers to be market value. Notably, https://www.youtube.com/watch?v=NdfmMB1E_qk and the Reddit post which that video comments on: https://www.reddit.com/r/nyc/comments/innhah/comment/g4ai27m...
The TL;DR is that there's weak evidence that the contractual conditions attached to financing from investors who seek high risk and high reward makes those landlords ignore local market conditions and incentivizes those landlords to leave commercial units vacant instead of renting them out at market value.
But that first person takes a Big risk raising prices since he is necessarily losing money relative to charging market price in the hopes others come along in significant numbers.
Leaving rooms vacant is incredibly expensive. Profit margins are not that high. So think if you're making 15% margin eating a single month of rent would cost you profit over 6 units. It's a hell of a gamble
Profit margins are high if you collude with 90% of the market to artificially raise prices.
> The complaint, filed earlier today by Attorney General Brian Schwalb, focuses on the multifamily landlords' use of software from Texas-based firm RealPage, which suggests rental prices based on a pricing algorithm. Key to those models, according to the suit, is the data fed in from the landlords and the pressure RealPage puts on them to stick to the code-derived rental rates.
It's a complaint. Nothing was filed yet. And it looks like they used a pricing algo to suggest a price? Im suggested a price when I sell on eBay, or StubHub or Facebook marketplace, or pretty much anywhere. I don't know how they "pressured" landlords but maybe a box like "we suggest market price to maximize returns!" eBay similarly warns me when I stray too far away. The pricing algo is actually a fabulous service.
And if they're a property manager then their job is to find the market price and rent out apartments at the behest of landlords. I really don't see the technical issue here. You can say collude and conspire, but what does that mean in technical terms. And what does "being subject to" the algo mean? Exposed?
RealPage requires users to accept some % of centrally-decided prices.
That's the issue.
> And what does "being subject to" the algo mean? Exposed?
No. It means being required to set prices to what the algo says, instead of being allowed to "defect",with lower price.
I like your comparison to other marketplaces. If an overwhelming portion of a certain product were sold on eBay, and eBay suggested prices to all sellers that nearly all of them accepted, I would consider that collusion as well. If that product were a luxury good like Pokemon cards or something, I would consider the collusion unethical but maybe not a huge deal. If the product were a fundamental human right, like housing, I would be very upset and would want the government to get involved.
Which is why the very bad and illegal part, of the software company trying to enforce the high prices, was so bad.
This only works if landlords can't "defect" and lower prices on their own.
That's why it's collusion.
This IS collusion because RealPage goes to apartment A and B and says "give us control and we will list your prices together to get the highest price"
If every landlord in town all went to a guy named Bob to ask what they should set their prices at, that would be illegal collusion.
Hell, by that metric the stock market is collision.
I don't really care whether there is a cartel for paperclips.
It doesn't mean they are okay when it comes to critical sector like housing!
Information sharing is an integral component of cartel behavior, especially when it's highly structured in cartel software like RealPage. Where there's smoke, there's probably fire.
Information sharing is a necessary but insufficient component of cartel behavior.
Because selling labour is the most cut-throat business there is. To the point that we had to create extensive labour laws to stop the bleeding that always ensues when unencumbered labourers start competing with each other.
Revealing price information to your competition puts you at a competitive disadvantage. If they know you charge $30 per hour, they'll jump in and offer to do it for $29 per hour. Conversely, if they don't know how much you charge, they are left to guess. If they think you charge $35 per hour, they'll offer $34 per hour, but then you'll win as you charge $30 per hour. Obviously you are disadvantaged if you let that information be known. Especially if they can withhold their information from you.
No business wants to reveal price before they have to. Retail has to get the price out there early as it is the only way to get customers in the door, but businesses will keep things as close to their chest as possible. Try buying anything geared towards enterprise customers... In fact, ideally, they will leave the customer make the first offer as it is also a disadvantage to go first.
If there are 10 firms chasing 9 employees, more information will drive up prices. IF there are 10 employees chasing 9 jobs, more information will drive down prices.
From my personal experience working in an industry that hires a lot of minimum wage workers, I encounter a lot of people who just don't realize that they could make more doing something else. I mean, they understand in some nebulous way that higher paying jobs exist, but not in an actionable way. With more information, they might notice that they could squeeze out a particular guy making $30 by doing the job for $25 per hour. But they don't even go there because they lack the information needed.
At the same time, those minimum wage jobs I speak of aren't going to pay more if the people leave – the work would just disappear. So while these individuals would make more, they would place downward pressure on the overall market in making such a move. By keeping the information hard to come by, however, you can avoid some of that competitive pressure.
> No business wants to reveal price before they have to.
Interesting. If RealPage/etc is "just" about information sharing, as many of its defenders in these comments are asserting, why would any rentier use it? There must be more going on.
Anyway, coworkers or friends sharing labor price information clearly has nothing to do with your rebuttal. The main outcome is that one party might be inspired to ask for a higher wage. It's a crude form of coordination, but that is why our capitalist society discourages it.
To facilitate collusion.
Although I understand your larger sentiment. As a farmer, I have to align my prices with the Chicago Board of Trade, which in many ways is similar. Once price data becomes pervasive enough, there is a tipping point where you have to reveal your prices early to remain competitive. I mentioned retail earlier as being another example of where that has taken hold. That theoretically is a reason why rentiers could be compelled into using such a system absent of collusion taking place.
> but that is why our capitalist society discourages it.
I am not sure I understand the attribution to a capitalist society here. It was also discouraged to talk about income in Soviet Russia, as an example. That competitiveness of which we speak is not a function of a capitalist society, it is a function of human nature. Hell, I bet in early hunter-gatherer societies it was discouraged to talk about how much of the gathered resources you were able to keep for yourself.
What evidence do you have for this? In current "socialist" countries like China, talking openly about wages is common and not discouraged.
The incentives are crystal clear. Price coordination works, and workers in USA are brainwashed against doing it in their own benefit.
Again, as we have discussed several times now, revealing one's price early starts to become necessary to remain competitive once price data becomes pervasive. We can find many examples in the USA where that has become true. Clearly there is nothing about even American society in particular that keeps everyone holding their price as a well kept secret.
Such data is not readily available in the USA with respect to labour in general, however, thus asymmetrically offering up such information puts one at a disadvantage, hence why workers are generally guarded. You even point out yourself that coordination is necessary to remove that disadvantage, so it seems you already understand this beneath the exterior trying to act to the contrary.
But in order for it to even have a chance at success, there's a deeper and more insidious market manipulation: an engineered shortage of apartments.
If there was adequate housing supply, landlords could not profit from this collusion.
However, we embrace this collusion through heavy restrictions on housing supply, which directly enrich landlords.
This is the true collusion that we should remedy, and perhaps there should be lawsuits against the city and its land use officials.
Henry David Thoreau
Computers have a way to automate collusion and hide it's existence. In every major industry there is a small cottage industry that provides pricing data.
The obvious response someone can reply with is that there needs to be a way to punish non-colluding players, but the reality is, you only need to have the whales involved. The small players can charge less, but realize that if they're only providing 5% of the market (combined), and cannot exceed that, they have no downward pricing pressure.
Combine all that with the fact that the FTC asleep at the wheel to this and monopolies gobbling up all of the competition. Almost all of our food is owned by a handful of companies that own hundreds of brand names.
As a YieldStar user, you basically set the desired occupancy you want, like 93% or 95% (and before you have a misinformed take about 95% occupancy = landlords keeping units vacant... this is an industry standard... there is always some slack in the market). So YieldStar basically tries to pull/push forward demand to get to the desired occupancy by changing the rent. You could make your occupancy 100%. But it's actually less revenue to do that.
Is this all legal? No idea. I'm eager to wait to see how this plays out. But an interesting thought is: Are property management companies "colluding"? They work on behalf of other landlords in the same area. They "aggregate" leasing data and act as a central operator to conduct leasing.
There are probably A LOT of other industries where some central party is aggregating data, which makes the market more "efficient" from a capital perspective.
What's funny though, is i can't think of any other industry begging to let us build housing, which reduces rents and income for landlords. We are seeing rents come down fast in these oversupplied apartment markets. Maybe there's a lesson. Want to reduce rents? You have to add supply (i.e. TX), or reduce demand (San Francisco's years of mistakes making it lease desirable).
I would love for this kind of lawsuit to win. In an algorithm driven world, systems level views are critical and I hope the law keeps up. If anticompetitive prices are an emergent feature without a literal “let’s collude” handshake, it still needs dealing with.
Formal collusion isn't the only means by which rents might rise in tandem across a market.
To be honest, I could have found a cheaper place as a grad student. I just wanted to live in a newer place, closer to my lab. But pretty much every new construction is priced as if it’s in a major city. There are a few buildings here in Champaign Urbana where the rent matches the rent in areas close to downtown Chicago.
Having lived in a remote college town long before such software could have been popular, I think a lot of college towns were probably already overpriced. There’s an almost guaranteed supply (students), often growing (as more students are accepted each year), and universities are often slow to build their own housing. Students want to be close to campus, often don’t have a car, and have access to cheap loans so landlords nearby can charge inflated rates.
A collective refusal to deal is a crime under Texas law.
I have filed many complaints. I get no action.
Or an author to publish "the magic formula" in a textbook that is popular among landlords
Or self-hosted software that does the same thing as RealPage except bring-your-own-data (companion app: craigslist scraper) and phrases recommendations more like "probability of these consequences using this strategy"
this phrase undermines their whole case. A city experiencing a housing affordability crisis is not going to see a decrease in rents regardless of this software (which may be illegal and ok, throw the book at them)
Housing affordability crises are caused by shortages of housing compared to demand for living in that place.
Naturally the "Rent is TO damn high" guy from a few election cycles ago (look on Google for that) is also the case.
I don't know how the used car market and rental market will return to what it was before for a forseeable future.
Until we make housing into a much less attractive "Investment" we will see obscene pricing levels. The only way to do that is to increase supply of housing. The hands down best way to do that is to end R1 zoning, minimum offsets, and parking minimums. At least within 20 miles of major cities.
The solution is quality social housing, built by the state in large enough quantities to disrupt the market.
Something like this would be a huge improvement and reduce housing costs.
https://www.strongtowns.org/journal/2018/6/6/toward-dynamic-...
https://en.m.wikipedia.org/wiki/Danchi
Housing didn’t become a depreciating asset there over night. It was the express result of the state intervening in the market.
https://www.pewresearch.org/politics/2022/09/19/modest-decli...
Cities have been writing laws and zoning that prevent economies of scale from kicking in for decades. If they just stop doing that, we'll get more housing.
You're stating this like it's a fact, but you haven't explained why. In a free market, competition is on the basis of price and quality.
Imagine if you are currently owning and occupying a house and have a chance to pay your mortgage by building a rental property on the unoccupied half of your lot. A lot of people would be very happy to do so if it were legalized.
Edit: But you are totally right that socialized housing would be an excellent solution.
That isn't the only way.
We could eliminate the many tax benefits like: accelerated depreciation, 1031 exchange, step up cost basis for inherited property, etc.
Heck, there's no policy justification for having the stepped-up basis at all.
Decrease the benefits for owning an investment property, then the number of people purchasing investment properties will be lower and prices will likely fall.
Yeah same for health, education, insurance, internet, medicine etc.
https://oregoneconomicanalysis.com/2021/03/16/who-benefits-f...
Granted, those are paper gains, but still, better to have that option than to be priced out of the market completely, as many are.
> The only way to do that is to increase supply of housing
And gave some examples of reduced regulation (zoning, parking) that would make it easier to build. They didn't say anything about government subsidies.
You said
> No, the best way is to build housing
Aren't you both saying the same thing?
I think you might have stopped reading at "don't make housing such a good investment" and not considered the substance of their argument.
Soviet style block housing with mixed use development would be awesome but rich Americans would HATE it. Especially when you are building on a 10 acre lot next to their $2M 3 bedroom house, 3-5 miles from downtown, to build 4,000 units for the poors that make them coffee and deliver their Uber Eats.
It's much more politically viable to allow them to build a 20 unit apartment building on their 1/3 acre lot and rent it for $40,000/month to help pay for their $2M mortgage.
The only way to increase the housing supply is to increase the price of the house. So you're left with a death spiral. Build to lower prices, but the actual building is costing more than what people are willing to pay for a house, let alone the markup needed to justify KB homes (or others) to get involved at all.
Sure they're building, and you can go to job sites, but they're not going to charge what you think they will at the end. Long gone are those signs that say NEW HOMES LOW $400s!!!
And if you do, they're undesirably small condos. The sales cycles are extended or, unfortunately, they're just going to keep selling at the $800 prices you're seeing for a new home.
Besides - even if there weren't many success stories to draw from, which there are - things can be improved on. Just because the first bicycles kinda sucked, doesn't mean that modern e-bikes aren't amazing. There are similar examples everywhere.
What's going on right now is a horror show. It's stupid, economically and morally.
There are lots of places all over the US, that have some forms of public housing.
And yet most people prefer private housing.
By all means, the government should compete in the housing market like everyone else.
And then the consumer should decided.
But, my feelings are that most people are currently choosing private housing markets for a reason.
Zoning rules like height restrictions, floor area ratio, lot coverage, setbacks, parking minimums, square footage minimums, lot size minimums, and other zoning restrictions place extreme limits what can be built before we even mention exclusive single family zoning.
Yes, these RealPage estimates seem to be used, but if these estimates were wrong, the large landlords would simply fill up their competitor's units and would create an incentive to create more competitor units.
Perhaps the DC governemnt would do better to simply build it's own brand of low-cost housing.
if only there were a way that landlords could actually prevent the creation of more competitive units... you'd probably want to preclude development in certain zones of the city... maybe could call it "zoning" or something.
Not really. RealPage "recommends" what you should set rent rates at, and even tells you that they "discourage" you from deviating from that recommendation, as it is based on an assumption of other landlords in the area (including those using RealPage) will be doing.
It's plausible deniability for landlords, at most.
Worse than that. They require you to agree to their pricing at least 80% of the time.
Will see how the other companies would react to this. I'd guess, they would enforce the notion of "recommendation" to whitewash the outright collusion.
I think it's when cooperation replaces competition in the market. Free markets, like everything, have pros and cons. The pros of a free market depend on competition. Some markets are so small that everyone in the market grows to trust each other and they find a mutually beneficial arrangement; they stop competing and there goes all the benefits of a free market while leaving all the cons.
Did I miss anything?
It reminds me of https://ncase.me/trust/ . Often it's a good thing to have trust in a group, the elimination of competition is good. But, again, the merits of a free market are based on the assumption that companies will compete, and to the extent this is not true, the benefits of free markets are undermined.
It seems like half the people in this thread are arguing that simply knowing the market price constitutes collusion.
However, that isn't the only service RealPage offers. They also offer a service where they set the price and list units for the owners.
The first service is not collusion, but the second one is collusion.
It is the difference between a service that reports gas station prices and a recommendation to owners to make a decision VS a service that controls the sign and sets the price for them.
Every once in a while, one law firm will defect and raise salary, and every other law firm will update theirs within a week to the new rate.
It is the same with the landords. In theory, they can charge whatever they want. It is 100% legal to extract rent. It is only illegal to make agreements with other parties to price fix.
Conveniently, all of the landlords participating in the conspiracy had some kind of service agreement with RealPage/YieldStar, which appears to equate to an agreement to fix prices.
One where RealPage gives you a recommended price and you are free to choose whatever price you want. They might ask you something along the lines of "why didnt you use our price?"
The other is the AutoPilot feature, where RealPage "takes the wheel" and set/publishes the listing price for you based on their model.
I think the first case is pretty clearly legal, and the second has some valid concerns.
The point of both services is to help landlords maximize profit, but that isnt illegal by itself.
> The point of both services is to help landlords maximize profit, but that isnt illegal by itself.
No, it's immoral, which is why lawsuits and regulation are coming.
With respect to the latter, I dont think there is anything immoral about maximizing profit by legal means. The counterparty isn't owed anything.
In general the legal system requires all charges to be substantiated by evidence. In general logical or rational thought requires allegations to be well founded.
In contrast, where else do we simply let charges and outcomes be dictated by sentiment or allegations opposed to evidence?
Unless you're misreading my reply to mean the absence of hard-evidence.
Whenever libertarians or deregulation-loving neoliberals start arguing for "smaller government" or deregulation just point them to examples like this. Only government stops thinks like price-gouging, housing discrimination and many other state functions.
What we're dealing with here in economic terms is what happens when you apply a largely unregulated market to a necessity that (by being a necessity) has inelastic demand. You need somewhere to live so the only function of capitalism in that case is to extract as much wealth from you as possible for something you can't possibly do without.
Some will point out not all landlords do this (that's just a matter of time) and there is other software. This is the lie of competition when what we really end up with is price-fixing. Except price-fixing is technically illegal so instead you end up with "price leadership", which is the same thing but legal. This is where Delta decides to start charging $30 for a checked bag and United and American Airlines mysteriously follow suit.
"Leadership".
This isn't innovation. It's not even market efficiency. It's coercion, which is state violence, something people seem blind to. If you don't pay the sheriff will show up and phyusically throw you on the street. Eviction is violence.
1. Many capitalists and libertarians are in favor of antitrust regulations. Cartels are second only to the government in their ability to distort markets
2. Calling the housing market "unregulated" is a joke. In many places the supply is constrained largely due to regulations.
3. The tension between socialism and libertarianism in the US has ended up with kind of an anti-dialectic where we end up with the worst-of-both worlds (if your not a rentier). Any legislation that can reduce competition is framed as benefiting the poor, while any legislation that might upset the status-quo is framed as government overreach.
Who enforces these "antitrust regulations"? A gutted "small" government?
> The tension between socialism and libertarianism in the US has ended up with kind of an anti-dialectic where we end up with the worst-of-both worlds
This is an interesting framing, because during the original rise of socialism in the mid 20th century, USA had an extremely productive dialectic of socialism+libertarianism (1930-1960). It was only after the capitalists took over again in the 70s, and pushed back against socialism, that things started to go south for the median American.
To say there is a significant component of socialism in today's USA is absurd, and demonstrates how foreign the concept of "socialism" has become. We are controlled by corporations and the corrupt politicians they manage. There is clearly NOT a dominant thread of "public servitude" that is required for a socially-oriented economy.
Yes? Small doesn't have to mean toothless.
> This is an interesting framing, because during the original rise of socialism in the mid 20th century, USA had an extremely productive dialectic of socialism+libertarianism (1930-1960). It was only after the capitalists took over again in the 70s, and pushed back against socialism, that things started to go south for the median American.
Friedman et. al. (who certainly championed the gutting of antitrust in the US) were able to take over in the at least partly because of a wide range of geopolitical events that happened to depress the US economy, and then Reagan (who Friedman was an advisor to) took credit for the recovery. While counterfactuals are difficult, I think the example of Thatcher (who Friedman also advised and in some ways paralleled Reagan on policy) gets blamed for the UK's economy in the 80s.
> To say there is a significant component of socialism in today's USA is absurd, and demonstrates how foreign the concept of "socialism" has become. We are controlled by corporations and the corrupt politicians they manage. There is clearly NOT a dominant thread of "public servitude" that is required for a socially-oriented economy.
I agree that we are left with the remnants of FDR's socialism that hurt the wealthy the least.