Rents are soaring. Is RealPage to blame? | Hacker News Reader

Rents are soaring. Is RealPage to blame?

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72 pointsunclebucknasty207 comments

If this tool allows a market to be a bit collude-y, it may add a bit to rents, and it's worth suing them to see what comes out.

But that software won't get you LA rents in Houston. The macro picture is still supply and demand and we have to intervene there if we want housing to be more affordable in the places people want to live.

People are so desperate for some bogeyman to blame. Institutional investors! RealPage! Short Term Rentals!

Fixing those things would not hurt, to be clear, but lack of supply is the underlying issue, and it's often driven by local NIMBYism.

I went to a hearing to support the construction of 40 "units" (aka homes) in my city last week and got jeered at by a crowd of older, wealthy retirees who were SO ANGRY about those being built.

That same sort of scene (often with no one to speak in favor) is replayed day in and day out all across the country.

This isn't to say 'markets solve all problems' but legalizing a variety of housing is very much a step that your local city council can take.

It's a worthwhile issue to be involved in, because housing is at the nexus of so many other things - the economy, the environment, people's ability to live where they fit in best and much more. These groups are good:

* https://new.yimbyaction.org/

* https://welcomingneighbors.us/

From the article

> Critics say the cooperation between RealPage and apartment managers has emboldened landlords to raise prices even if it means more units are left empty when tenants are forced to leave. Without RealPage, the plaintiffs argue, landlords would be hesitant to jack up rents; instead, they'd focus on keeping their buildings full.

So it sounds like in some point this is depressing utilization of existing stock.

And given that it is (literally) rent-seeking and no one else can build an apartment there that they would rent, it seems like it's exacerbating any supply issues we're experiencing.

Right, like I wrote, it's probably jacking rents up some.

But empty units are empty units and too many of them means you need to lower prices or you are losing out on money because you don't make anything from empty homes.

And whatever effects this has (I'm curious to see what comes out off the lawsuit), you're just not going to be able to say "wow, look at how much landlords in San Francisco are making.... gosh, I want to double my rents!" if you're in a place without a tightly constrained housing supply.

I think you are really not understanding the issue. Unless you have crazy supply of apartments this software can have dramatic effect on prices. You are vastly underestimating the impact of this price fixing. Example from my own building: we have an apartment that has been sitting idle since last 6+ months. Price of it has been going up!!!

I think this type of service may be used elsewhere as well. There was a video of Ford dealer with massive stock of trucks, but still charging the dealer markup. I really hope they(congress) are looking into this in all aspects as it really does skirt the spirit of anti-competitive laws.

> I think you are really not understanding the issue.

Yeah, I'm the one that goes to city council meetings and hearings and reads book after book, and talks with the state economists here in Oregon and I don't understand it?

It doesn't take "a crazy supply" of apartments to create competition.

It's why apartments cost less in Las Vegas than Los Angeles - there are more to go around relative to the demand.

the problem is they are making more money by having a few units empty while renting the rest at higher rents.

the landlord is making more money, people are being squeezed for all they got, and less people have homes.

this is a huge drag on the economy and adversely affects every single person in a region except the rent seeking landlords. Even if you own it is a negative as your CoL is going to go up as stores need to charge more to pay employees more so they can afford homes.

So someone has to step up and be squeezed for all they've got so people have homes? Who is going to volunteer for that?

landlords should prioritize filling units. if they insist on squeezing people for rent while leaving inventory unfilled, they should be squeezed by regulations.

Isn't this what Vancouver did, by levying additional taxes on vacant units? (In that case, for absent buyers parking money, but same effect)

Theoretically that works for current landlords - what happens in a year or two when there are now no new rentals on the market because there are no new landlords because who would take that deal?

It's surely a drag, but I think we don't know how big of a drag it is. My expectation is that it's small. What are the overall vacancy rates? Single digit percent? If yes, then it's not a big impact.

>What are the overall vacancy rates?

I don't believe that's the only measure of economic drag. For instance if, having no choice, people are spending a higher percentage of their income on rent, then it leaves less to spend on other economically stimulative activity, like frequenting a local coffee shop, buying clothes, etc.

This. 30%+ of income just to acquire rental shelter isn't healthy.

Especially when that regressively scales with income (i.e. people who make less pay a larger percent of their total income).

And especially when the siphoned capital isn't being reinvested in new housing (because landlords and investors would rather collude and boost profit margins on existing stock).

Again, link in article we are all commenting on says vacancy rates are 30+% in New York metro.

So seems like "we" (ie people who read the article before commenting) do in fact know how big a drag it is in certain markets.

The article didn't say that at all. And vacancy rates in NYC aren't 30%. They're ~1.4%.

https://www.nytimes.com/2024/02/08/nyregion/apartment-vacanc...

I'm not claiming that this kind of service is good, or that having a trial is bad. I'm actually really interested in the judicial opinion because I could see it going either way. What I am saying is that it just doesn't feel plausible that this software is single handedly moving the market in a big way.

People really do want to point to a single boogeyman for housing unaffordability. And that's too simplistic. Nationally we're short millions of units at a time when we're wealthier than ever. Low supply and high demand means rising prices.

Fix it by making units easy and cheap to build.

We aren’t short millions of units nationally. We are short millions of units in a few popular cities, while we have surpluses in other less desirable cities and locations.

High demand in NYC is definitely not high demand in buffalo. But people need to be where the jobs are, and they aren’t in buffalo.

Rental vacancy in Buffalo is 4.9%.

https://www.rate.com/research/buffalo-ny

Better than NYC, but still low. For reference, the state defines anything below 5% vacancy as a 'housing emergency'.

Buffalo is popular right now because its rents are below national average. It isn't really that buffalo somehow is popular on its own, it is popular because it is cheap. This is completely different from NYC.

Keep in mind that Buffalo used to have a lot more housing than it does today, it was more than one million people in 1970, and today, its just 800k or so.

That sounds like we're short millions of units nationally, not just in a few cities.

Then please be my guest and volunteer to live in Detroit or Cleveland or Buffalo, rather than NYC, SF, Seattle, LA, etc...

Keep in mind that Buffalo used to have more than one million people 50+ years ago, and now only has around 800k.

The above number is for Buffalo's metro area. Buffalo is actually under 300k today and was almost 600k in 1950.

> But empty units are empty units and too many of them means you need to lower prices or you are losing out on money because you don't make anything from empty homes.

If the mortgage is covered by extortionate rents on your other properties then historically the empty unit is appreciating in value.

Renters are in a position where they have no shelter if they don't acquiesce. Landlords have a multitude of options that make it easier for them to horde empty homes.

> If the mortgage is covered by extortionate rents on your other properties then historically the empty unit is appreciating in value.

That appreciation is happening whether the unit is rented or empty.

The scenario the landlord sees for a given unit is (assuming zero mortgage costs just to make the math simpler [1]):

Empty unit: $0 in rent + $Y in value appreciation

Rented unit: $X in rent (X>0) + $Y in value appreciation (where Y is fixed between the two scenarios because both cover the same rental unit).

For the landlord, $X + $Y is greater than $0 + $Y.

The landlord's greatest total income is when all units are rented, as then all units are returning $X+$Y.

[1] including mortgage and tax costs adds two subtractions to the formulas above, which will result in a real net loss for an empty unit, as the mortgage and taxes must be paid, irrespective of the rented status of the unit.

You're assuming a single property and a rational Landlord.

Imagine the Landlord owns 10 properties and sets the rent to $2k/mo on all of them with 1 property remaining empty. Maybe that last property could be rented out at $1.7k/mo but from the landlords perspective that puts downward pressure on the rents of his other properties.

If one of the landlord's existing tenants moves into the cheaper property it's even worse. He loses $300/mo and now has to consider reducing the rent on an additional property. Should he find a new tenant at $1700/mo, he still feels like he's losing because he believes the rent should be higher.

From the landlord's perspective, it's better to squeeze if he has sufficient cash flow. Especially given the belief that lowering the rent will negatively impact the value of the property.

While you're correct that mortgage and tax are fixed costs that need to be met, you haven't considered that landlords have multiple options to offset those costs. When interest is low they'll use equity release and interest only mortgages.

In a city of any size, holding one unit on or off the market is not going to affect the overall price. It's in the landlord's interest to rent it out rather than have it vacant.

Some tenants aren't worth the rent, so it is in the landlord's interest to find reasonable tenants rather than have it vacant, but you don't want to take someone as a tenant who will trash the place and then not pay rent for several months until they are evicted. Additional laws can make who to accept as a tenant even more stringent. For example, if you make below 80% of median income in Seattle, landlords have to pay your relocation costs if you raise rent more than 10% in one year. This means not many landlords are interested in renting to anyone who makes less than 80% of median income anymore.

The landlord feels that he's losing money by renting it out at a lower costs, so he holds out for more.

I used small numbers for the sake of example, scaled up to a city it'd represent 10% of the city's housing stock sitting empty.

Jumping in to say I think it's important to try to control the incentives around how many empty units are "too many" empty units.

Having a tenant comes with cost and risk. Why charge 1200 for 100 apartments when you can charge 3500 for 34 apartments? Maybe even 3000 is still just as profitable

Every extra 100 you charge an existing tenant is pure profit, while reducing price to take on more tenants means more maintenance costs, managing staff costs, etc.

In an economic vacuum this may work itself out, but IF there is a widening wage gap where the you have 30 tenants who can afford up to 4500 a month and you have to drop the price, and then the next 50 potential tenants can only afford up to 1800.. there is financial incentive to squeeze more and more out of the 30 year after year rather than try to accommodate all 80.

Hopefully I'm painting the picture properly

The easy solution is to tax vacancy at a rate that makes this strategy not profitable.

Canada and the UK (among others) have toyed with these kind of "use it or lose it" penalties for unnecessary empty premises. I think they're a great idea, but they don't seem popular, maybe because the benefits are spread widely while the costs are paid by relatively few, but politically powerful, landowners.

To add some clarity for those of us not so au fait with the terminology, rent-seeking refers to economic rent, which here is the different in the apartment rental price actually charged (with the benefit of RealPage) and the price that would otherwise arise in a market which was free of collusion.

The argument is that free markets are (somewhat) efficient and mean that we use our finite resources (like land) in the manner which generates the greatest economic benefit. Normally if you rent-seek by trying to jack up a price above what the market would dictate, someone will come along and out-compete you. The trouble is that it's difficult or impossible for someone to to produce a substitute good here, if there's no empty lot on the street and all the prices are artificially high then how can I come along and compete on price offering apartments on the same street?

Realpage is just a tool, and the landlord can use it different ways. We use it to help us optimize for occupancy so that we dont have units sitting vacant, AND so we can better manage our vacancy over slow periods. It is downright magical at times how it has seemed to predict softening market conditions when I thought the software was simply recommending discounts left and right

An owner choosing to let a unit sit vacant for an extended period is probably more worried about "tenants rights" (squatters) and how difficult it is to evict. You can't blame software if an owners chooses to destroy his real avg rents by letting units sit vacant longer than necessary. 3 months of vacancy to score a 1 year lease, but the opex bills keep coming... no thanks.

Collusion is just a tool, an illegal one, but a tool nonetheless. You say RealPage is magical, I think it’s just evidence of its control over the housing market, not clairvoyance. It self-fulfills whatever prophecy it comes up with. And these prophecies seem to always predict ever increasing prices(excluding high frequency noise), far above what the market would normally allow.

Renting is supposed to have risks, without these risks it probably wouldn’t even be allowed in modern society. Landlords are well within their right to find creative ways to mitigate them, but it can’t involve breaking the very same set of societal rules their tenants are following, there is nothing creative about that. If only criminals targeted criminals, but they always go after the easiest victims.

Serious question… is the stock market collusion? Sellers looking at each others work, agreeing on a price?

There’s a very healthy, active and open market for apartment rents in most cities. If you are posting from somewhere with heavy rent controls, government market manipulation, or extreme demand, blame those instead! it’s still a market.

I’m not excusing bad actors, but real page is not a scapegoat

Can you predict the stock market?

Just like the rent-market can have price manipulation, so can the stock-market and any other market. It’s absolutely possible for a trading platform to do this through price recommendations, and it would be illegal.

The two things being compared here are completely different though. It’s not very useful. Whats the real-life stock equivalent to RealPage? Who even rents stocks?

Additionally RealPage is forceful with its price “recommendations”. Imagine if a trading platform forced you to buy/sell a certain percentage of your stocks at their suggested rate, and file an appeal to opt out.

> It is downright magical at times how it has seemed to predict softening market conditions

It's not magically predicting. It's called colluding. And yes colluding is very effective and profitable for the colluder - even if the collusion is being laundered through a program.

> If this tool allows a market to be a bit collude-y, it may add a bit to rents, and it's worth suing them to see what comes out.

When I buy stocks, the price is set across the country, anyone can get a quote and see what it is at the moment. Is that collusion?

Housing is more limited geographically and while it's very far from a monopoly, larger providers might have some pull in the market.

IDK, we'll see what comes out of the lawsuit, I guess.

If more housing gets built, prices fall though, like in Austin.

Certainly not.

But consider an actual hypothetical cartel that is explicitly defacto and dejure price fixing. Suppose the members of this cartel instead create a new LLC. Suppose that new LLC now performs the role of price-fixing with the condition that not conforming will lead to expulsion from the price feed system. Has this transformation taken a cartel that is explicitly colluding and made it into one that is not colluding?

If so, we now have a mechanism to turn every cartel into a non-cartel via the umbrella LLC. And the latter costs $300 to set up in Delaware. So the anti-cartel law has a $300 bypass. Reasonable, I suppose if you believe that that law has reached the end of its utility.

The trouble with colluding is that if everyone agrees to set the price at $300, another seller can undercut them with a price of $290 and take their business away.

Or one of the members of the cartel can agree to sell at $300, and then offer a kickback under the table to get the business, or offer some other cash equivalent incentive.

Cartels only work if the government is used to make it illegal to cheat on the cartel.

except this isn't the case. there have been many examples of cartels and collusion in the past.

As many examples of failed cartels and collusion, too. That's why they always seek the government to force cooperation. This is how unions operate, for example. Taxis and the AMA are other examples.

> That's why they always seek the government to force cooperation.

you're talking about labor cartels, but the article (and op) are talking about real estate cartels. one operates with government involvement, the other does not.

edit: my original point was that simply the threat of someone undercutting a cartel is not enough to be able to state that cartels cannot exist without government involvement/coercion.

The real estate cartel has no means of enforcement, so its ability to hold the line on prices fails the moment one of its members decides it is in their personal best interest to lower the price to undercut the competition.

I see. Your position is that cartels only exist because governments ensure they exist. I think that is a tautology (in that everything exists because governments ensure they exist since governments enforce law so things exist in society depending on whether they enforce or don't) or wrong, so we have a fundamental disagreement here and unifying will take so long that there's probably no point discussing further.

> Your position is that cartels only exist because governments ensure they exist

Not exactly. Cartels based on voluntary cooperation are unstable and tend to not last very long. Stable cartels are based on coercion of some sort - some mechanism to keep the members in line. The law is the usual means to achieve that.

Thats called a monopoly, and monopolizing intentionally is illegal for the same reasons.

The LLC owns no product to sell. It's merely a price feed service. You are welcome to use other price feed services. In fact, for the fee of a few hundred dollars, unaffiliated people will happily set up other price feed services.

Is one central company telling every bank to hold shares and only release them in specific amounts to achieve optimal price? That’s what’s happening with real page, the supply side is being curated across the whole industry so there is no real competition and thus no real price seeking function. Free markets don’t work with that type of collusion.

There are millions of owners. Do you really believe they'll all stick to the cartel price?

enough do to make enough of a problem that we're discussing it now.

So how come the landlords in Houston are losing out on so much money when they could be charging San Francisco prices?

Those are decoupled markets. Employers pay more in SF, so landlords can extract more. The problem is that landlords in both markets are colluding to extract more than pure market forces would otherwise support. Now if employers then have to raise wages further, that distortion could result in higher inflation.

Capitalism doesn’t work when monopolies and cartels gain sufficient power to eliminate the price setting function of competition.

Cartels don't work without coercion of its members.

Remember the no-poaching cartel among tech companies in Silicon Valley? and the companies were cheating on their cartel agreement? and the infamous email Steve Jobs sent complaining about the cheating?

A landlord has no power.

homes should not be an investment. no one needs stocks everyone needs a home.

True! But show up at a hearing like me and you will hear angry people - who most definitely vote - talk about how those apartments may lower the value of their homes.

The problem in the U.S. (independently of everything else) is that value serves as a filtering mechanism.

Value of properties in a neighborhood correlates to the crime rate in that neighborhood - and that’s true nationwide, and because of certain political protections there’s no way to “divorce” the two - which presents a thorny problem.

Horrible, horrible, horrible analogy. There is so much to say about this but the bottom line is that stocks do not follow price fixing it is more a market equilibrium. This on the other hand is pure price fixing.

It's just a suggested price. There's no coercion.

>It's just a suggested price. There's no coercion

I think you may be misunderstanding the definition of price fixing.

What's the coercion here?

Price fixing is the result of collusion/collaboration, not of coercion.

Price fixing doesn't work without coercion. Let's say you and I agree to sell cars at the same price. How would that be enforced? What's to stop you from cutting your price to grab some business from me?

> Price fixing doesn’t work without coercion.

https://en.wikipedia.org/wiki/Price_fixing

>What's to stop you from cutting your price to grab some business from me?

The fact that the parties mutually benefit from their collusion, which is why they sought to price fix in the first place. It's an agreement like any other.

Please, just read up on the definition of price fixing. It'll clear these questions up for you.

A price fixing agreement is not a contract, because there is no exchange of value.

Hence, it is not enforceable and the members will cheat on it, because the incentives are a Prisoner's Dilemma. Read about the PD, it'll help clear things up for you.

I'm familiar with the prisoner's dilemma. This is not that.

In general, I don't find price fixing that difficult a concept to grasp, which makes it challenging for me to break it down any further for you.

So, unfortunately, I don't think there's anywhere else to go from here. But, thanks for the discussion.

Of course it is the same. Work through the scenarios. It's always advantageous for the cartel member to cheat on the cartel agreement.

Stocks are fungible. Housing is not.

Housing is fungible. You can turn money into a house, and house into money. You can borrow against a house. You can borrow and put it into a house. You can rent out a house.

Look up fungible in a dictionary. Housing is not fungible because not all units of housing are interchangeable. Being able to sell something does not make it fungible.

There are enough dwellings in any city to make them interchangeable.

Really? All real estate is worth the exact same? That's news to me.

When people trade things that have different values, money is also exchanged to make up for the difference.

For example, when you trade your old car for a new car, you pay the difference in value.

Your definition of "fungible" applies to literally everything on the planet. Everything can be exchanged for money and back again. That's not what fungible means. Here's another example to help you differentiate:

* Gold is fungible. Any bar of pure gold (of identical mass) is exactly interchangeable and has an identical value with any other bar of gold.

* Diamonds are not fungible. Every individual stone is unique and must be properly graded by a licensed jeweller. Two stones of the same mass are highly unlikely to have the same value.

The entire reason markets exist is so people can exchange what they don't want for things that they do want. For the purpose of this discussion, they are fungible.

By this broken logic, "Movies are fungible". Because you can turn money into a John Carter, and you can turn Dune: Part 2 into Money. You can borrow against Star Wars, and you can license out Barbie.

But everyone knows, movies are not fungible, because they are not interchangeable. I can buy oil, or unleaded gasoline, and it's basically the same everywhere, it is "replaceable by another nearly-identical item, mutually interchangeable" -- oil and gasoline are fungible. But "Movies" are not fungible, because "Lord of the Rings" is not a replacement for "50 First Dates", which is not a replacement for "The Matrix", even though they're all movies.

Housing is not like Oil, housing is like Movies. It's not fungible, because a 2bedroom row-home in Foster City, CA is not "nearly-identical/mutually interchangeable" with a 4bed,2bath home in suburban Louisville, nor a 1bedroom condo in the Chicago Loop.

Even when the housing is all in the same zip code, much of it is still not fungible with it's alternatives, because housing is so regularly different and unique in a myriad of different ways. ("this one is on a hill, that one is in a valley, it has a higher risk of flooding. This one is in School District A, this house across the street is School District B, this house is in a city with income taxes, this house on the next block over is in a township with no income taxes, that house will need a new roof sooner, this house is in a HOA neighborhood, that house is near the bus line, this house is close to the freeway onramps, that house has fiber but this one is only Comcast Coax, etc")

I've watched thousands of movies. While they are not identical, and a very few rise above the usual, they are fungible. Action movies are interchangeable, murder mysteries are interchangeable, romcoms are interchangeable, and on and on. Once you've seen a few, they follow predictable paths.

There's even a formula for them:

https://www.amazon.com/Save-Last-Book-Screenwriting-Youll/dp...

Definitely interchangeable.

Similarly with genre books. As a kid, I decided to read all of Ian Fleming's James Bond books. But after 5 or 6, I noticed that they all followed a formula, and got bored with them and never continued. with the series.

Yes, all houses are different, but the differences are largely superficial. You'd be happy living in any of thousands of homes in your locality.

At the end of the day, it keeps coming back to land values and land use. Over and over and over again. Land value tax fixes almost all of these problems - YIMBY is just a good alternative that solves some of the problems while being more easy to sell politically than a rewrite of our entire property tax system.

> The macro picture is still supply and demand and we have to intervene there if we want housing to be more affordable in the places people want to live. legalizing a variety of housing is very much a step that your local city council can take.

We already did this ages ago -- most cities have already made all the changes you are requesting, years or even a decade ago. Your talking points are like 10 years behind the times, housing is already legal in 99% of the US right now. (basically everywhere that isn't SF / Bay Area). And you can see brand new 5+1s all over every city, as proof of it. (so much so, that press even writes about it - https://www.bloomberg.com/news/features/2019-02-13/why-ameri... )

Yes, neighbors complain and complain, and it's easy to focus on them, cause they're loud and annoying. But they don't win -- they complain, and then the investors win anyway, and still get to build almost anything they propose. (I'm in the Midwest, and I can count on one hand the number of times an investor lost a proposal -- they get to develop anything they want 99%+ of the time)

> People are so desperate for some bogeyman to blame. Institutional investors! RealPage! Short Term Rentals!

Well, because those are actual issues, and "NIMBYism" isn't. "NIMBYism" is maybe 2% of the overall housing problem, while private equity, investors, illegal hotels ("Short Term Rentals"), pricing collusion ("RealPage"), and such are, collectively, probably ~50%+ of the problem.

There's dozens of problems at play with crazy-high housing prices. "NIMBYism" doesn't even rank among the top ten of them.

> We already did this ages ago -- most cities have already made all the changes you are requesting, years or even a decade ago

No, they did not. This is divorced from the reality of most cities.

> No, they did not.

Yes, they did, and you can see it in the metrics.

If "new housing" is "not legal", how are we at a 30-year-high in new residential construction? - https://www.reuters.com/markets/us/us-housing-starts-surge-1... and https://www.bloomberg.com/news/articles/2023-06-20/us-housin...

Note that we're also at a nearly 50-year record-high on urban apartment construction as well https://www.axios.com/2023/09/07/apartment-building-construc... -- the kinds of dense multi-family units that urbanists insist cities "haven't legalized".

Oregon was the first state in the nation to re-legalize middle housing in 2019, only 5 years ago, with HB2001, which is the kind of reform we're talking about. Most states have not caught up. The governor of Arizona just vetoed their own housing bill.

Building apartments where it was already legal to build apartments is great, and we're seeing it help curb rents in some places, but there's so much more to it than that.

something has to be going on nationally because rents even in 2nd and 3rd tier cities are also high (like 1st tier high). there should be some financial benefit to living in a less popular, lower population place that has less access to a great diversity of foods or an art/music scene.

Part of it is 'household formation' among millenials.

Someone asked this question in the Oregon subreddit, about why the demand for housing has gone up so much even if the population has not.

https://oregoneconomicanalysis.com/2023/10/26/household-form...

The macro picture is collusions drives up everyone's prices equally.

The same collusions occurs in multiple American categories. Americans think the free market lowers prices, but at the scale of macro business interests, it's in large conglomerates interest to raise prices under collusions, as they all win.

Yes, its just price fixing, bypassing laws by using 3rd party tools.

And with no increase in supply and the increase of people needing housing, the prices can go only go higher. Infrastructure designed for populations 30-50 years ago, city planning didn't foresee the need for the public transportation and housing needs for these mega cities.

And then the increase in local taxes to try to compensate for the mass costs, and hurting the current tax base, is a major issue.

Top if off with the increasing inflation and interest rates which is also compounding the situation.

> And then the increase in local taxes to try to compensate for the mass costs

I don't know if it's like this everywhere, but our local taxes have gone up by a big percentage over the past several years. They say they haven't raised our taxes, but since valuations go up, our taxes go up... by thousands of dollars.

If valuations are up across the board, and the revenue requirements remain fixed, then your mill levy should be lower and your tax burden should be the same as the past. It should be pretty clear that your municipality is collecting more taxes than they were previously from published reports. If they aren't, then that means your property valuation has gone up more than others in your region...that should be considered a good thing, even if you have a slightly higher tax burden because of it.

In what conceivable reality could housing costs go up across the board but municipal revenues remain flat? Municipal employees need a place to sleep, so housing costs lead directly to new revenue needs.

If municipal revenue doesn't remain flat, then you can't say taxes haven't gone up.

This was the main reason behind California's Proposition 13 in 1978. At the time, homeowners were seeing their taxes go up and up every year just based on valuation increases. Meanwhile their incomes weren't necessarily increasing at the same rate. Prop 13 has had some negative effects but the anger by voters at the time is entirely understandable.

The biggest issue with prop 13 is they also rolled it out for commercial properties not just your primary residential home. So much prime land is squandered as a result by things like 1950s era single story retail at best or just a surface lot that sees minimal overhead but a lot of upside for the absentee owner.

Deferring taxes until death or home sale seems like it would work better. Now, you just have a system where the newest members of a neighborhood pay way more for services than extant members of the neighborhood.

Deferring taxes does nothing to prevent wasteful over spending by local governments. For all of its faults, Prop 13 was effective in capping spending.

Well sure but its basically a system where you massivly, massivly benefit people already have property, and literally take a huge shit on everybody else.

Its basically a "lets give property owners billion and billions in subsidies" and make everybody else pay.

Exactly. Our tax rates were cut (very slightly) this year, but valuations are still up so the tax bill is up as well. The city acts like we should be super grateful.

Seattle keeps raising property taxes in order to reduce the housing shortage.

My property taxes have gone down for the last few years, probably because King County has moved the equation to taxing land more than structures (and I live in a town home on a small piece of land).

On the other hand, the main reason the landlords using RealPage were not raising rent, seemingly, when they could, was vibes.

And don't forget stagnant wages, forcing desperate sales to those with capital in the bank go acquire property, and then rent it back for even more money....

> …forcing desperate sales

Are you referring to single or multifamily property?

Either way, demand is strong and prices are high. Sellers still have a lot of power in this market and I haven’t really seen examples of anyone selling a property being taken advantage of.

Not to mention that construction has seen little gains in productivity over the past few decades resulting in the Baumol effect in the industry. There's little reason that constructing new housing cannot be automated to the degree that car construction is automated, but a variety of regulatory hurdles and little foreign competition makes building construction prices rise steadily. We need a well-funded startup to pull an Uber and indiscriminately sidestep regulation to disrupt the real estate market.

> There's little reason that constructing new housing cannot be automated to the degree that car construction is automated

What experience do you have that you would be able to make a lofty claim like this?

Are the people working at DR Horton and Lennar and the like missing something obvious? I figure businesses that construct and sell tens of thousands of homes in a year are at the bleeding edge of figuring out how to most efficiently construct a house.

One can observe the increase in quality and variety of prefab and manufactured homes, which fully take advantage of new manufacturing efficiency advances, while also observing assorted regulations that make building such housing infeasible in many parts of the US.

What's you're special experience that makes you so confident this is not the case? Seems like a pretty extraordinary claim.

>What's you're special experience that makes you so confident this is not the case? Seems like a pretty extraordinary claim.

The comment I responded to was edited to include the component about regulations being the problem. Obviously, the parameters within which to construct a house includes regulations, so my experience that automating home construction is not cost efficient yet is the fact that the largest and most successful home builders do not use those techniques. Aka reality.

Whether or not regulations are appropriate or not is a separate discussion, but in my experience, most are good other than the ones that forbid the type of housing being built (such as higher density), or excessive setbacks that waste land.

Edit: never mind, the comment I replied to was not edited, I just didn’t read it thoroughly. My bad!

I replied to you before the parent was edited.

I think we are pretty on the same page regarding regulations. Safety is important. But forbidding density via setbacks, parking minimums, and certain types of housing is what bites us. And there are some regulations enacted in the name of.safety, which create nonstandard requirements where a prefab home factory must either special case that one state/locality, or forbid selling there.

As an example, any factory-manufactured home sold in California must have a sprinkler system. Sprinkler systems are expensive, and while they're very valuable in large shared buildings, I question whether they are necessary to mandate in single family homes.

Of course this isn't targeted at manufactured homes; California mandates this in every new house.

But this fragments the manufacturing of homes and causes issues with getting the efficiencies you would expect from a factory. Multiple SKUs need to be built.

People like custom built homes.

There's an old housing development nearby, perhaps constructed in the 1940s. There were two basic plans, along with mirror images of the plans. You have to look closely to see this, because over the decades the houses have been extensively remodeled and improved with things like garages, extensions, etc.

I live in a neighborhood like this. Our house was built in 1947 and the other original houses are either the same or a simple variation. Of course, most of the original houses on the street have been torn down for large, mostly unique houses.

Maybe I need more coffee, but I can't tell if this is satire or not.

A comment doesn't conform to my worldview, so it has to be satire, right? Your solution is what? More government?

> We need a well-funded startup to pull an Uber and indiscriminately sidestep regulation to disrupt the real estate market.

Whether or not this would be to the public benefit in terms of automation, this is exactly what's happening here but with pricing. The law forbids price fixing, but courts are tech-dumb and so long as you pass your price fixing through an algorithm you've got decent shruggability on any claims made.

They are only able to do this price fixing because of the scarcity of housing right now. If much more housing is built, prices will drop.

I don't think this is true - for one, housing in the US isn't all that scarce (~14M vacant units) [1], and housing doesn't behave like most markets vis a vis supply / demand - there are too many confounding factors and it's not exactly a liquid market.

This would also make sense given that this algorithmic pricing platform is used by so many clients. If just enough real estate firms can maximize their profits in this way, they can afford to buy out anyone who might compete on price.

1 - https://fred.stlouisfed.org/series/EVACANTUSQ176N

I'd be curious to see where these 14 million vacant units are located. It's quite likely that the majority of them would be located in places where people do not want to live.

Right, but that's part of the problem - just being able to build more houses isn't going to solve problems for, say, NY or LA where it's not an issue of how many units but an issue of pricing

> There's little reason that constructing new housing cannot be automated to the degree that car construction is automated

I strongly disagree with this. I watch several general contractors on Youtube. They come across as smart, educated individuals. They frequently talk about the things they do to save time or optimize. Yet, it's obvious that huge portions of their job still involve on the fly decision making.

You might be able to automate this, but it'd come with incredible upfront costs to de-risk and plan every detail. Factory based manufacturing largely doesn't have to deal with this since the environment is so highly controlled. Further, automated manufacturing puts significant time ahead of production building draft parts.

So if we are happy with criminality to “sidestep regulation” how would you feel about squatting vacant homes?

Netherlands had this problem in the 60s and the solution came in the form of a squatting movement.

I feel in the US people are ok with corporations committing crimes but not humans. Weird seeing as the humans are the ones without a home and the corporations are just trying to get rich.

https://en.m.wikipedia.org/wiki/Squatting_in_the_Netherlands

> So if we are happy with criminality to “sidestep regulation” how would you feel about squatting vacant homes?

That already happens in the states. Sometimes, you just need to go on vacation for a couple of weeks and come back to find your home squatted with a fake lease drawn up in crayon to throw you into a civil legal process. You can find tutorials online.

So would you endorse it legally? It was the solution to the crisis in Netherlands. You used to tell the local police station that you were occupying the house.

Empty units stopped being a thing.

It does happen without legal recourse. Since the USA doesn't have a registered lease system (no registration, police don't care), anyone can take property and claim it is theirs, and live there while the courts sort it out. This includes just going on vacation for a couple of weeks.

It isn't a solution to anyone's problems except maybe as a way to live free while doing lots of drugs.

It’s not protected at all though, we both know that.

I'm not sure what you mean by protected. A squatters life is to find one squat, wait until the courts/police kick them out, and then find the next one...wash rinse and repeat. It isn't a great life, but people do it, which sucks if they happen to choose your house.

So, some countries have protections for squatting.

Squatting is legal.

In the USA property rights are very strong. Read the article I posted earlier. Basically in Amsterdam a lot of companies were colluding to keep apartments empty which inflated the price. In response people were legally allowed to squat the apartments provided they were unoccupied.

This fixes the problem of empty apartments.

Comparing the rights of squatters in the USA to the rights of squatters in other countries is a non-starter. I'm saying if citizens in the USA had the same rights to squat as they had in the Netherlands in the 70's and 80's the problem would be fixed.

Price fixing and no penalty for leaving units vacant.

question: how can a municipality determine if a unit is vacant?

> And then the increase in local taxes to try to compensate for the mass costs, and hurting the current tax base, is a major issue.

My favorite is when jurisdictions let people past a certain age freeze the property tax rate at a certain point. Of course, these were the same people who:

1) campaigned against any and all housing that would disrupt the "charm" of the area

2) insisted on a 3/2 single-family home on a significant fraction of an acre

3) insisted that said home be miles away from the city center, requiring lots of infrastructure while simultaneously reducing the population density that would pay for said infrastructure

4) did nothing to shore up the budgets at the local, state, and national level over the last 30 years

Are you under the impression that only people who fall into one of those four categories age?

This is a list of things that a generation by-and-large did, not a list of categories.

But actual data says opposite. Amount of housing is growing while household size shrinking.

>>US-wide, homes built in the last 6 years are 74% larger than those built in the 1910s, an increase of a little over 1,000 square feet. The average new home in America, be it condo or house, now spreads over 2,430 square feet. It is also important to note that, parallel to the rise in living space, households have been getting smaller over the same period. In 2015, the average number of people in a household is 2.58, compared to 4.54 in 1910. This means that today the average individual living in a newly built home in the US enjoys 211% more living space than their grandparents did, 957 square feet in total

Does this control for short-term rentals? I could totally see us building more 3 bedroom Airbnb flats while simultaneously moving families into smaller apartments.

Yeah, this is annoying. Even the 55 and older neighborhood that was built a few miles from me recently, the smallest is about 2K sqft. What the heck??

Surely the math must make sense to someone.

There is an inundation of foreign nationals holding in various camps and temporary housing that are fueling inflation (gov’t money printing, aka fraud) and will drive price increases soon as they start being interleaved into society.

The other side of the equation is also that the same inundation of foreign nationals into the system will drive down wages.

We are all riding the dragon. We shall see how it unravels.

This has long been a suspicion of mine; I've wondered what the actual ratio of housing square footage per person in the US is. I see the wealthy building palatial 3rd homes that are occupied a few weeks a year and wonder if that's a big enough demographic to have any noticeable affect on the national market. Seems wasteful regardless.

Data doesn't say anything. You need to interpret it correctly. For example, any time you see 'average', you should probably run away quickly, because it is almost certainly full of monsters.

https://www.thestar.com/news/insight/when-u-s-air-force-disc...

just some quick things that jumped out at me:

- of homes actually built, hides that there's a lot of demand for smaller starter homes or housing in cities

- the average household can get smaller if there's a bimodal distribution, ie poorer households growing in size. or people not having kids because they don't have and can't feasibly afford a spare bedroom.

- "the average individual living in a newly built home" im leaving this one as an exercise for the reader

Totally wrong. Infrastructure was not designed for population 30-50 years ago. The opposite, to much bad infrastructure was built for to few people.

There are lots of town the same amount of people but about 5x more infrastructure per person.

Even the places with growth have massivly overbuilt infrastructure. And low value housing ever further out is just not helping because the housing + transport cost equation doesn't add up for people.

Its simply bad infrastructure, badly planned with a totally disfunctional insentive structure.

The infrastructre isnt actually supported by the local taxes and raising taxes can often even in the best case only cover maintenance at best.

Look at the data from Stong Towns or Urban 3. If R1 zoneing (single family homes) is 80% of you land and each on is losing money from a tax perspective, its not suprising.

You have medium sized cities that have to maintaine roads that can reach half way accross the country. Indianapolis has to maintaine a road that reaches from it to Alaska.

Lots of good infrastructure like trains and walkable neiberhoods were systematically destroyed and replaced with less efficent infrastructure.

Any county with a great inner city somewhere is profiting massivly and that city is paying for all the infrastructure around it.

Even delapidated inner cities are better from a a tax efficency point of view then single family homes or a wallmarkt.

The poor neiberhoods are overtaxed and the richer ones are undertaxed by a large margin. Even if you assume the poor get the full service they should have, and they often don't.

But im sure the solution is to make the highway threw Austin wider ...

(Side note, it seems weird that they are just now publishing this article when this was news 2 or 3 months ago?).

That being said, I noticed this with the apartment I am renting now. I checked daily and noticed the price was changing on a daily basis, I highly doubt this was done by a human. I ended up emailing them saying something like, I noticed the price was going down could we rent it for a few hundred less than what it currently is (it was going down close to $100 a day or something like that) and they agreed. I assume at some point the price would start going up based on when they expect people to look.

It is really weird to see prices fluctuate that much.

I even start to wonder if they purposefully don't list available units to keep a perception of availability issues to encourage renting at higher price.

Also news a year ago: https://news.ycombinator.com/item?id=34926683

I thought it had been a while, only felt somewhat confident in saying 2 to 3 months ago.

This article doesn't really add anything and its from a major site, so that makes this even more confusing.

I mean, not that we should not talk about it and we should continue to shine al light on it. But, idk something about that feels weird.

Prices of stocks vary moment by moment, too. It's what happens when there is a large number of buyers & sellers in a marketplace.

Stocks makes sense with that being a core part of how that market is supposed to work in the first place.

Rent prices changing daily really doesn't make a ton of sense, there isn't really a valid reason for it except for an algorithm trying to figure out how to make the most money. Under normal circumstances I would expect maybe a monthly adjustment, maybe weekly if it was for a single unit not for all units in a building.

Something like, oh this unit isn't renting we need to get it filled so let's adjust the price. That wouldn't really be a daily thing normally.

Computer and AI algorithms are used to select the best prices for stocks, too.

> Rent prices changing daily really doesn't make a ton of sense

Sure it does, just as stock prices change by the millisecond. The economy is not remotely static. The only reason prices changed slowly before was the lack of information and an illiquid market.

> That wouldn't really be a daily thing normally.

Markets change moment by moment. Just like the price of an airplane seat on a particular flight.

Prices fluctuate more when there are fewer buyers and sellers. This reduces the chance that there is both a buyer and a seller who happen to agree on a transaction price that is near the previous transaction price. As the number of buyers and sellers decreases, transaction volume decreases and volatility increases as price discovery gets more difficult. When transaction volume decreases to zero, there is no price discovery at all and the market price becomes effectively undefined. This could indicate a coming price crash or spike.

If I sell you my used furniture, there is no discovery at all. We simply sit down and discuss price until we reach a price acceptable to both of us. It doesn't mean there's a coming crash or spike.

The crash would be relative to the previous price that furniture transacted at.

If you bought antique furniture, the used price might go up.

Yes it might. That one item can swing the whole spectrum from "free on Craigslist" to "$14,950 OBO" depending on how motivated that one seller is, and how motivated that one buyer. One way or the other, its price will have little correlation with how much it previously transacted for. The buyer might even be a knowledgeable antique appraiser who picks it up for free and flips it for $15k the next day. Whereas when there are a whole community of sellers and many buyers for some item (say, a used video game console), the prices tend to change more smoothly and gradually, in smaller increments.

we are talking about housing, not a stock. two totally, extremely, incredibly different asset classes.

The only real difference is the housing market is far less liquid than stocks are.

Check out REITs, Real Estate Investment Trusts. You can buy shares in REITs, and hence shares in real estate.

People also borrow money on their homes in order to invest the money.

When you buy shares, the shares represent something - a piece of Amazon, for example.

They're a lot more alike than you suggest.

i'll give you that: they are both "assets" that can be bought, sold, and leveraged against.

but i can't live in a stock. i can't rent out a stock for somebody else to live in. i can't burn down a stock. i can't hide in a stock from the police. i can't find a dark place inside my stock to cry. i can't take a hot bath in a stock. i can't cook three meals a day in a stock. i can't sit at my desk all day and make a tech salary in a stock. i can't raise kids in a stock. i can't sleep in one. i can't start an ecommerce business in a stock. can't sell drugs in a stock. i can't walk inside a stock i can't fuck in one i can't even kill myself in a stock.

i can't i can't i can't give this argument any energy.

Fun fact about RealPage that's not mentioned in the article: Jeffrey Roper is the guy who created RealPage's price setting product (YieldStar). Jeffrey Roper's previous professional experience was building a similar product for Alaska Airlines. Jeffrey Roper left that position when the U.S. Department of Justice indicted Alaska Airlines for price fixing and collusion using Jeffrey Roper's software. The feds even seized his computer as part of the investigation.

RealPage saw his resume and said, "Yep that's our guy. We want price-fixing software and we only hire the best".

Thank you for this info!

This happens with compensation as well. It doesn’t have to include software to be problematic - it can just be about exchanging data with each other. Many companies share their compensation data with third parties via “surveys”, and those compensation data companies in return share industry data back to participating companies. This private signaling reduces wage competition but it’s not talked about much because the practice is visible only to HR teams and executives. Part of why they get away with this is an “antitrust safety zone” provided by the DOJ, where if you use a third party survey company and follow a couple other rules, you can get away with anti competitive practices. See the following:

https://www.shrm.org/topics-tools/news/hr-magazine/agenda-co...

The DOJ announced they were revisiting these safety zones in 2023, but it seems like they were only doing so in the context of the healthcare industry:

https://www.wsgr.com/en/insights/doj-withdraws-support-for-h...

Probably all tech companies also suppress wages this way. Enforcement and fines for these practices need to be stepped up, and new regulations are needed.

What is actually missing from discussions about pricing is this:

"What is a reasonable balance of profit for providing a service and benefit to those being served?"

Without tools like RealPage, a landlord will naturally set a price that results in enough profit to make it worth their time, effort, stress, etc.

Economies of scale can make a big difference here, as some of the overhead can be managed more efficiently by having a bigger business (more properties).

But when something like this tool, or just old-fashioned price collusion, enters the equation, inevitably the profits go up unnaturally. It is no longer a free market where every actor will work in their own best interest, but rather a gang of actors is able to extract more from others. This is also exacerbated by the gang not being dependent anymore on the people it serves (it's customers) for other services. In the past, you as a business owner would think twice about grossly overcharging your customers because some of those customers provided their own services which you dependend upon. But now, you can buy your good from cheaper foreign markets, and you can buy your labor from imported artificially-low-paid workers. You no longer have to care what your customers think about you, because you'll never need them.

At the end of the day, what is the point of a human's existence? Is it to make as much money as possible, irrespective of the service being provided or the exaggerated cost to the customers? Or is it to provide a needed service to others such that everyone can be reasonably happy?

Clearly we have been trending toward the former for some time now, as evidenced by the rapid rate of increase of human productivity rewards going to a very small percentage of the population (0.1%) https://fred.stlouisfed.org/series/WFRBLTP1246 .

This trend is not sustainable, because at some point the people will revolt. Maybe we'll all be dead before then from other issues we've caused, but given enough time on this path there will be a complete collapse of the current system.

It's worth noting that Realpage owns their namespake product, but they've also acquired Propertyware and Buildium, two other property management systems, over the years. With that, they have access to quite a lot of rent market data to share to others - more than one my initially expect.

I believe there are about eight main pieces of software in the property management software space, but three of them are owned by Realpage.

Tangential, but it's a sad industry to integrate into if you're an engineer. Very archaic and dominated. I understand why, but that doesn't make it less depressing to work with.

Software does what its users want it to do.

In the case of rents, the users want it to maximize profit.

The users want it to maximize profit because they've been told you can distill every facet of good and bad in a society to whether the line goes up.

Society's singular focus on shareholder returns is strangling everything. It feels like no good can be done in this world unless it makes the holy line go up. It's maddening.

> It feels like no good can be done in this world

Is this not subjective? My neighbor 3 houses down might have a very different idea of what “good in this world” means.

Idk man, "not having an entire generation in debt" sounds like everyone could agree on it.

Not necessarily, if many people from the previous generations are cashing in on investment in that debt.

As someone who worked in real estate for 8 years with 4 years in single-family property management, it is absolutely RealPage and all of the various automated tools that are beginning to populate the real estate sector.

When pricing rental properties, you look at comparables within an (often small) geographic area, making price adjustments for changes such as access to public transportation, proximity to business districts, "newness" of the comparables, amenities in the community, etc.

RealPage's pricing program does not have the ability to take those into consideration. Instead, an outdated 2bd/1ba, 20yo community that's 10 minutes to a business district is being priced comparatively to a just opened 2bd/1ba <1yo community smack dab in the middle of that business district. All because that new community also uses RealPage.

RealPage has also made it incredibly difficult to override their pricing suggestions. In many cases requiring the manager of the company themselves to contact RealPage, file an appeal, and wait for RealPage to approve the appeal.

RealPage is generating these pricing numbers by looking at their own customers, not at the larger market, and has taken that pricing power away from medium to large property management companies (which in recent decades have begun to consolidate the market).

This is what happens when technology companies enter an industry that has been largely stagnant for years with little to no regulation in how those 3rd party tech companies have to operate in a sector that, itself, is highly regulated.

There's a reason I left that industry, from my experience it's rotten to the core and is built to only benefit shareholders with little disregard for consumers and renters. You think Facebook's enshittification is bad and dangerous to consumers?

Related. Others? Pretty sure there have been others...

I saw RealPage's crappy rent-jacking-up software so you don't have to - https://news.ycombinator.com/item?id=34926683 - Feb 2023 (403 comments)

DOJ will examine whether RealPage helped landlords coordinate rent increases - https://news.ycombinator.com/item?id=33744136 - Nov 2022 (123 comments)

RealPage and landlords illegally created a 'cartel' to set prices, lawsuit says - https://news.ycombinator.com/item?id=33633541 - Nov 2022 (3 comments)

Lawsuit filed against rent-setting software RealPage - https://news.ycombinator.com/item?id=33317414 - Oct 2022 (50 comments)

Rent going up? One company’s algorithm could be why - https://news.ycombinator.com/item?id=33224502 - Oct 2022 (279 comments)

That seems localized and also heavily driven by the market manipulations of and through government pushing urbanization and wasteful co-located office work, rather than pushing for distribution and decentralization and remote working.

In the area I am spending some time in it seems to be a different situation. Several large apartment complexes were clearly planned/started a few years and are now approaching completion, while the influx of people has clearly declined. We are taking at the very least many hundreds of not thousands of apartment units. Many of the complexes are struggling to fill and existing complexes that have been sold and over-leveraged over the last several years are being poached with lease-up type deals, e.g., two free months.

I would love to know if these complexes are also outperforming. My anecdotal intuition is that they are not doing well, and will only get worse if the urban lobby will succeed, which is likely as it is closer to and in control of power and more corrupted than the non-urban lobby.

Propublica has also been covering RealPages including senate and DOJ investigations + proposed legislation

* (2022-10) https://www.propublica.org/article/yieldstar-rent-increase-r...

* (2023-03) https://www.propublica.org/article/yieldstar-rent-increase-r...

* (2023-11)https://www.propublica.org/article/doj-backs-tenants-price-f...

* (2024-01) https://www.propublica.org/article/senators-introduce-legisl...

(edit to fix bullet formatting)

They're soaring now, they'll be crashing next. Live by the algorithm, die by the algorithm.

Are rents falling in Austin because they don't use RealPage?

The problem is we have been saying there is going to be a crash for years. But I don't know if there will be until the supply problem is fixed in big cities.

Big dense towers are only going to go up so quick and until then, what is going to cause a crash? People are obviously paying these prices or they would be sitting vacant. It isn't like I can just pick up and say, I am not paying rent. I have to live somewhere. (Yes, I do fully realize that technically I could pickup and say exactly that, but realistically it's not a choice many would want to make if they have the choice).

I agree we need one, badly. But I just don't see it happening unfortunately.

The rental market can stay irrational for longer than most people can go without a decent place to live.

We got a great deal on our current apartment due to a combination of 1. user error & 2. one of these algorithms.

Our place was originally listed at $7,550 [1], but the leasing co used pictures from a shittier unit within the same building!

Naturally nobody was interested, so the pricing system automatically ratcheted the price down to $6,050, at which point we checked out the apartment & noticed the discrepancy between pictures and reality.

As people figure out the balance between "AI" and "common sense," I bet there's going to be tons of mispriced crap out there in market.

[1] (Numbers changed by ~5% so as to not doxx our apt #)

>We got a great deal on our current apartment due to a combination of 1. user error & 2. one of these algorithms.

I periodically look at available units at a complex I considered the last time I moved. A few months ago I saw a unit twice the size of my apartment for only slightly more (and less than other, smaller units in the complex), presumably because of a RealPage pricing error.

Moral of the story: When you're thinking of moving, start checking complexes you're interested in every day.

Inflation and investors chasing returns. Whatever tools they use don't really matter, and is a distraction. Build (a lot) more market rate housing or even free gov't housing. Deal with inflation aggressively (even deflation) or raise all salaries and benefits to match.

The cost of owning homes and apartments is also going up.

Taxes on my property in a major metro area have nearly doubled since 2019. Inflation raised prices of labor and building materials. Insurance premium are also higher.

Rents will continue to go up, as there just isn't enough supply in most major markets.

what is the problem ? Land is a commodity and this fact has wide social acceptance, so let's let the market do its job, or let's start discussing the nature of the principle of private property.

Related discussion:

https://news.ycombinator.com/item?id=39575803

...among other things: years of not building enough housing, plus cost disease on the prices of housing construction, plus Airbnb eating into housing supply, plus most new development being in unwalkable subdevelopments or sterile 5-over-1s* so that the demand for anything walkable gets blown through the roof. I think that's the list?

Edit: oops, how could I forget anti-development zoning and Nimbyist development codes that prevent private solutions?

* I would love to know the actual name, or a good derogatory name, for that type of apartment; they're not all 5-over-1s after all. The real problem is the lifelessness, and that the ground-floor businesses, when they do exist, tend to be depressing and corporate, such that people don't want to pick them over older construction that is better integrated with neighborhoods.

These are called double-loaded corridors, which are basically buildings required by North American fire codes to have two accessible interior stairwells for each unit. Unfortunately due to architectural constraints, this means that all new buildings built in the past few decades have interior "hotel-like" corridors and exterior flat, boxy frames.

North America is the only country that requires this type of fire construction--most other countries allow one interior staircase and an exterior staircase out of a window (like a ladder). Without this requirement, you're able to build buildings that are shaped differently, have windows in multiple directions, better support 3/4/5 bedroom condos, and are cheaper.

There's a movement to harmonize our fire codes with international standards; you can read more here: https://www.centerforbuilding.org/blog/we-we-cant-build-fami...

Lets built houses out of wood mixed with oil and then make regulation to make it firesafe.

Go look at how these 5-over-1s burn when they catch fire before they are finished.

https://archive.is/MAfYj

Could it be that people have developed an aversion to buying homes and instead choose to rent? Are the prices of houses rising at the same rate?

I would love to buy a home, but cannot due to the extreme cost, therefore I rent. This is definitely not unique to me.

I would love to buy a place, my rent is well above what I could expect to pay for a mortgage in the same area (for likely a nicer place).

But rent around here being so high stands in the way of saving enough for a decent downpayment.

I do know some people who prefer to rent for the flexibility, but I don't think its enough for this.

I'm not sure why the bigger issue isn't being talked about more, but yes, algorithms and "AI" are deployed in fashions that optimize profit. That's it. Profit. It's only getting much, much worse.

This is correct. I am currently working on a system to do price and purchase monitoring and optimize people’s purchasing. One of the things that I keep having to work around is dynamic real-time personalized pricing systems as they are more prevalent than I realized.

It seems almost inevitable that everyone will move to subscription / surge pricing models unfortunately. There are no structural incentives for retailers to keep prices lower. Perhaps bulk purchasing will change the game at some point, but it seems unlikely.

> personalized pricing systems as they are more prevalent than I realized.

Can you share the worst offenders? I am sure everyone is curious to know.

ETA: I wonder if this leads to an adversarial service, which lets you do "persona based straw buying" to get the lowest possible price.

Surge pricing also means doldrums pricing. The knife cuts both ways.

If things keep going this way, we will all end up paying the maximum an AI or algorithm thinks you can/will pay based on all of the data about you, your region, your friends, etc. For everything, not just rent.

You forgot the big input: how many other lessors are offering properties. There isn't a dial that owners can turn to just raise rents in a 2-sided market.

Who cares about other lessors if they're using the same algorithm (or a similar enough algorithm from a different company)?

The seller, since them accounting for the algorithm allows them to undercut the competition and make a profit.

The algo is a red herring, supply and demand conquers all.

You're quite right. The trouble with cartels is the incentive to cheat by offering a better price under the table is very hard to resist.

For example, auto dealers often will sign terms with the manufacturer saying they won't sell a car below a certain price. But the dealers can (and do) "cheat" on this by throwing in extended service plans, below-cost financing, a higher price on your trade-in, etc.

A common theme on HN is that people cannot negotiate prices. They can, all the time. All that's needed is to try. Even just saying "is a discount available" will often get you 10% off. (Of course, you have to be nice about it.)

Unless the supply problem is solved, there is no cure for not enough housing stock on the market. You can shuffle people around and then what? If there are only 10 holes and 20 pigeons and you can have 1 pigeons per hole, some pigeons are gonna end up in the wild

Because otherwise it's communism. Or so those with power to change anything want us to believe.

What's actually happening is the prices get more and more accurate due to having more and more market information available.

The Law of Supply & Demand is to blame.

It is not price fixing, it is price finding. There is nothing wrong with a market maker existing. There is good evidence that markets with higher penetration of this software respond more quickly to declining markets than do other markets with disorganized lessors who maintain the "pretend and extend" strategy to rent setting.

From the article,

In fact, the lawsuits claim that RealPage shares "peer lists" with clients that tell them exactly who else is providing data to the company within a specific distance of their property.

This sounds like reassurance to a landlord that peers will mimic the same price moves. If true, I would call that price fixing.

You are hereby reminded that litigants can claim anything they want in a brief. The bar for sanctioning a party over unfounded claims is extremely high.

Another kind of marketplace that provides detailed information on the other bids and asks is ... every functioning marketplace you have ever heard of. Commodities, stocks, futures, farm produce, everything.

In all of those markets, both buyers and sellers have access to the asks and bids. For your analogy to hold, I think the market data needs to be freely available.

Does RealPage give this info freely to renters, or is it hidden behind a subscription or fee and meant for landlords only?

Demand for a roof over one's head is inelastic. Markets do not work for inelastic goods. These people can't just downsize; renting is the low end of housing, and the low end is being systematically crushed by the landed aristocracy, abetted by automated price collusion.

> Demand for a roof over one's head is inelastic.

Quite the contrary. In my younger days, I could not afford an apartment. So what did I do? I got together with a friend who could not afford an apartment, either, and we shared an apartment.

I've also rented a house with multiple roommates to bring the cost down.

This probably varies regionally, but in my experience it's become pretty common for landlords and even HOAs to prohibit roommates (other than family members) these days. A handful of municipalities have even put it into law for single-family zoning. I gather it's considered to be a marker of "troublesome" people.

I know people with roommates in apartments today.

The type of roofs over one's head is hugely elastic. At low cost there is shared rental housing far from where someone might find ideal. At high cost you can build a custom stand-alone structure made of the finest materials on an acre of land.

It very well could be price fixing based on much of what has been talked about over the last several months about this. If RealPages is managing all of these prices for properties in a given area they are in a position to inflate prices gradually over a period of time.

It is a natural feedback loop of an algorithm like this. If it is designed to look at the properties around your location, and you try to get the most money for your property, over time those prices will go up as the algorithm tests what people are willing to pay for a given unit/building/location.

You could argue that this may have already happened with humans, but at a different pace and the algorithm is literally feeding its own inflated prices into itself.

Let's also not ignore that we are talking about housing here, there is a strong ethical side to not trying to price people out of places to live.

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