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Comment by fasthands9 | Hacker News Reader

I'm not so certain. There are only like a dozen car makers. In any meaningful city in America there are going to be several hundred, if not thousand, landlords. It seems hard to manipulate in that sense. Despite conspiracy theories - landlords are highly incentivized not to let apartments sit empty without rent coming in.

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.

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Yes, the are thousands of what technically qualifies as a 'landlord' in every city, but the distribution of landlords by property type skews strongly. Units with >10 units are owned by a relatively few number of large landlords with many properties. Properties with 1 or 2 units are often owned by individuals with one or maybe a couple properties. So depending on the neighborhood, properties there might be owned by lots of different small-time landlords or it might be just a couple of large corporate landlords.

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 would just wager the number of people locked in to a super specific neighborhood is not that large. Even so I don't think the power law distribution is that extreme here compared to other parts of the economy.

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)

It probably is more so in DC than in NYC. Most of the young professionals I know there only consider living in northwest, south of U street, which is only a few neighborhoods.

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.

Right - but what percent of those large buildings are owned by the same people?

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.

Whatever the number is, 90% of them are owned by companies that were colluding on pricing.

> 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.

In addition, very often lots of the small landlords are hands off delegating most practical decisions on renting to a handful of large management companies, and if they were to become unsatisfied with doing that would exit the landlord role, rather than directly manage. So, in market effect, they function more like a smaller number of large landlords who happen to pay out profit shares to a larger pool of people than like a large number of landlords directly participating in the rental market.

I see what you are saying. My comment was more geared towards how a Zillow number or KBB number could move the market and I didn't consider that in the context of the article about rent.

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.

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