FBI Raids Big Corporate Landlord over Nationwide Rent Hikes
thebignewsletter.com
thebignewsletter.com
But the price-fixing amongst "competing" landlords is where it goes wrong.
I would bet they're spreading the empty units around too, so no landlord ends up with all the empty ones.
Landowners get the biggest subsidy of all in the US, where they pay proportionally very little to the local government’s operational costs, and benefit the most from the law and order, judiciously systems, and education of the local populace.
And instead of going after landowners for reaping the rewards of sitting on unproductive uses of land that everyone has to spend extra time and energy to travel around, the government even gives them tax breaks (1031 exchange, property tax caps), and instead goes after people who actually perform work (income tax).
What's the right period of vacancy to allow for 1, 2, 3, and 4-bedroom units as a function of floor level, direction faced, time of year, elevator or not, age of building, distance to school and transit, etc?
The unit can provide utility as long as it is fit to live in. The only question is what price people are willing to pay for it.
We can even generously set it at 1 year just to start things off. If landlords are still too comfortable keeping units empty for the sole purpose of holding out for another price, then it can be revised lower.
Speculation driven rises in residential real estate prices buy/rent are a plague on society and we need to stop framing the problem so that we lose sight of the purpose of housing, it’s to house people…
If they were a utility, this would resemble selling all your water to las Vegas because they could pay the most and not selling to anyone else even if las vegas' usage drops.
Sidelining things to artificially create scarcity is bad for everyone.
Very seldom collusion is so blatant to be written in contracts. "Reports" and "recommendations" and "market color" are well established ways for competitors to communicate and coordinate illegally. Without additional evidence it would be difficult to build a case from that only, but large conspiracies leave large traces. The FBI will find something, if the conspiracy existed.
Pricing information is public, but inventory is typically not, at least in this context.
A cabal deliberately keeping supply down to drive prices up in a particular region seems like the real issue.
And I seriously doubt the people want to choose more than once every two years (many only vote once every four years).
Presumably they have dozens/hundreds of workers to manage those units? I'm not sure how "number of units owned" is indicative of easiness. A quantitative trading firm has billions of dollars under management. Does that mean it's even easier to be a quantitative trading firm?
Correct... which makes being a landlord exceptionally easy. All you have to do is have enough money. There is no cognitive or physical load that a landlord is required to carry, you simply open your checkbook.
A landlord never loses their money because they own the land. If a resident trashes their place, well they have insurance for that, better call the contractors to fix it up.
So you don't even need to know what you own as a landlord, you just pay other people to know it for you!
If you are working full-time and have your own house maintenance _and_ you are trying to assess tenants, fill out paperwork, fix issues at the rental property, travel to and from rental property, coordinate contractors, paint in between tenants, etc., it's work.
My (ex)mother-in-law went in to a retirement home, during the first year we wanted her condo to be available (eventually) if it didn't work out. Being a landlord for that year sucked.
Out in the real world, the cost a landlord would pay a management company to deal with all of this is absolutely baked into the cost of rent charged to the consumer. A landlord may choose to do it themselves to pocket that margin as profit, but they need not.
The only job requirement for "landlord" is "own an asset."
[0] And yes, there are exceptions that prove the rule - e.g. people in declining areas with decreasing demand for housing who don't have enough margin, or people who dramatically underprice their rent for some reason
Toilet overflowing? The tenant would call the management company, and the management company would call me and say the toilet was overflowing, do I want to do anything about it? If yes, they would give me a few plumbers' phone numbers and I had to take time out of my day, call around, arrange and pay for everything.
Air Conditioning broke? The tenant would call the management company, and the management company would call me and say the A/C was broke, do I want to do anything about it? Same story as above, they didn't actually do anything.
After the tenants moved out, the management company would call me and suggest a few cleaners, which I'd have to arrange and pay.
They charged me 15% to act as a phone middleman. I eventually concluded I didn't have the time/energy to be a landlord so I sold the place.
In my situation, their fees would have skimmed basically all the positive cash flow out of the property.
I was thinking more from the perspective of a more hands-on landlord who is invovled in marketing their property, doing or managing maintenance, and dealing with tennants.
This is property management, not being a landlord. The fact that landlords exist who can fully outsource the management and still turn a significant profit is a sign that our housing market is deeply flawed.
"It's not enough for them to make a lot of money, they need to make ALL the money" (James Stephanie Sterling pretty much whenever a triple-A game company does something shady)
The problem is that I can't opt out of housing since these same assholes bought all of it up.
Unfettered markets create monopoloies and oligopolies.
Housing isn't like other goods. If you don't want to buy an air fryer or can't because of price or supply, that's OK. You won't starve. But people need housing and we've built our economy entirely on ever-increasing housing prices.
This is a Ponzi scheme. The next generation has to work 3 times as hard or long to pay for your house to get that pricing increase. It's quite literally just theft from the next generation. Except it's worse than that because that threat is backed by state violence: evictions and homelessness.
We are quite literally choosing to kill people by witholding a basic human need: shelter.
Rental markets aren't "monopoloies" or "oligopolies" by any stretch of the imagination.
They’re also a necessary expense. It is the last thing a person can choose not to spend money on.
The hair splitting meme around "monopoly" and effective monopoly power (and the common meaning of these terms) is just ugly.
You conveniently left out the part before: "at least 21 large landlords and institutional investors [...]". Wikipedia says the definition of oligopoly is:
"An oligopoly (from Ancient Greek ὀλίγος (olígos) 'few', and πωλέω (pōléō) 'to sell') is a market in which control over an industry lies in the hands of a few large sellers who own a dominant share of the market."
"at least 21" is not "a few" by any stretch of the imagination.
As far as the rental.market being an oligopoly, there's an argument to be made that the existence of things like RealPage makes large sections of the market act as it would with an oligopoly, even if it doesn't quite meet the definition.
That is an interesting conversation to have, separate from the illegal price fixing.
I do think there are far too many players involved for it to fit the reasonable description of an oligopoly. (I am not the upthread objector to the use of that word, though I think the objection is valid.)
So what we have now is a whole bunch of landlords who largely all use the same software. That doesn't sound illegal. Now if it happens to spit out the same results for all the users, that's one thing (and problematic all on it's own). But the allegation here is that landlords bought into and use the software knowing this would be the outcome.
This is just an evolution of the old cartel of 10 or so CEOs scheming to fix prices in a dark cigar-filled room except now companies attempt to remove their own responsibility by waving their hands at The Algorithm [tm].
[1]: https://en.wikipedia.org/wiki/United_States_v._Paramount_Pic....
Or, do, and thereby point out that the problem is systemic, to a culture too enmeshed in the system to understand critique.
So either way. Do what you were gonna do.
one could theoretically maybe move to the barren wilderness of Nevada or Alaska or somewhere else desolate but given the lack of services, job, etc. it's not very practical. WFH didn't really lower home prices in the Bay, but it did make a bunch of attractive rural towns really expensive.
Saying "my software said to do x" isn't a defense when you are accused of x. In fact, it may be seen as negligent or systemic, both of which are bad places to be. I'm not sure where people think they can get off the hook for criminal behavior because they outsourced pulling the trigger.
2. the propublica article claims that realpage increases overall revenue by renting out less units.
From an economics standpoint, if you rent out 10+ units, having them 100% rented would also indicate that you are leaving money on the table.
Maybe there could be a fine/tax for units vacant over 6 consecutive months?
I wonder if VC's or people with Finance background are required to take Ethics classes.
Can somebody explain how holding apartments off the market is driving up revenues?
In China this level of crime gets you sent to re-education camps or just executed.
If the rent to leave 10% vacant is 11% higher, I basically break-even on cash-flow and have a higher building valuation (on a multiple of rents when fully-rented basis).
If it's 12% higher, I make more cashflow (plus giving myself an easier job with more freedom in operations to do medium maintenance between tenants and have units free for temporary dislocations, etc;).
The small landlord/owner with a couple of houses or condo units is going to want them 100% rented because leaving even one of them vacant is going to be significant impact on revenue.
If you rent that out for $900 a month, you will basically never have it empty, because those in it won't want to move (they lose the $100 bonus) and if they do, someone will grab it right away.
If you rent it for $1000 a month, it'll fill up relatively easy (compared to the market it is in) so you'll often have relatively low vacancy (but even one month empty is paid for by ten months rented.
If you rent it for $1100 a month, it'll be vacant much longer, perhaps forever depending on supply.
You are assuming that the marginal cost of turnover is zero, which it definitely isn't. Putting a unit on the market, showing it to prospective tenants, processing applications, background checks, income verification, etc is labor intensive and expensive. This is during the period where you have 0 income from the unit.
Just as much, small landlords are terrified of the damage a bad tenant can do and might not have the resources and experience needed to quickly get rid of such a tenant and finding a tenant can be expensive and time-consuming giving them further incentive to leave the place vacant. And also having less knowledge and experience, small landlord aim to follow the market and they'd aim to have an apartment as "market rate". Certainly, lowering an existing unit's price would only bring in "less desirable people" since "desirability" is very much a function of income.
1. You won't increase rents for existing leases, these need to be up for renewal so you can make changes to them.
2. You are assuming that you control the whole market. Even if 70% of landlords use RealPage and their pricing recommendations, the remaining 30% should be able to absorb some of the people moving out as a result of this if the new rent is substantially over market.
3. This creates somewhat of a prisoner's dilemma problem. Any non-compliant landlords inside the 70% bucket could only raise their rent by 5% instead of 10%, get full occupancy rates and come out ahead of their competitors.
It means that 30% people will get market-determined terms and other 70% will have no choice but to accept RealPage pricing. Because they need to live somewhere.
Lower supply means the price of existing offerings goes up.
Obviously, it's not holding all units off the market but collusion to hold enough units off the market to get a maximum value of the units times price, what they called in econ back in the day the monopoly equation.
It increases revenue with fewer units rented, the claim is not "maximize" revenue, but, for a property manager, that they "increase" revenue, in step with a sizable portion of that local market. It's a marketing claim to property owners, not a global/overview claim to the public.
Holding housing stock level constant, they can set prices that a renters moving in, in the coming years, can't improve on.
This is artificially limiting supply so instead of saying you have "100 units for rent" you only show 3 or 4. Done strategically this can give the appearance of a limited supply, even when the supply is not limited.
Imagine you go to 5 different complexes and they all say "Oh man, we only have 1 unit left and it's $$$". You're going to behave differently, especially if you're in need for a room then if you go to those 5 complexes and they say "Oh, yea, we have 40-50 units vacant at the moment". A sense of urgency is put on the renter.
I wonder how many of these large property owners engage in such rent seeking behavior too.
But you seem to be suggesting the opposite: As price rises, landlords are less willing to sell a lease, and tenants more willing to buy a lease.
The law of supply and demand observes that when people are more willing to sell or less willing yo buy, the price declines. (And, when they are less willing to sell or more willing to buy, price increases.) Supply (willingness to sell) and demand (willingneess to buy) determine price
But that's in a perfect market with perfect and symmetric information and pure rationality, and the upthread poster is talking about psychological tactics that leverage the fact that the real world doesn't feature perfect and symmetric information or pure rationality.
When you get into the meat of it, what the previous commenter is trying to say is that rent is quite inelastic and thus people will happily pay a lot more than is necessary when you can employ some clever marketing tricks. But the strange wording has it going all over the place.
Economic behavior is not physical law. Awareness of economic behavior can change behaviors. For example if you observed that ice cream stocks went up the day that hot weather was forecast you'd quickly find yourself in a battle to predict when it was going to be hot at earlier and earlier dates.
>happily pay a lot more than is necessary when you can employ some clever marketing tricks.
And the marketing trick is called lowering supply.
>People (or other animals, I suppose) determine price.
Quite often by controlling supply
The original contextual comment indicated that there was no reduction in supply, merely false claims of the "there is only one unit left!" nature. Normally a buyer would look around to make sure the claim is true, but I guess the idea is that people get so emotional about housing that they don't give it a second thought, which plays into why there is such inelasticity to exploit.
Try reading the thread before replying next time.
This raid is potentially glorious. Faith in the system tentatively renewed.
I'll keep my fingers crossed for not only certain parties going to prison, but also certain parties being forced to compensate for the huge harm to entire markets and the people in them that they knowingly caused.
(IIUC, if a lot of owners collude to manipulate prices, then the rest will also tend go up, because they notice the new "market" price, and they see their costs are going up. And then this has other economic effects, including payroll and retention for small businesses. And presumably also the various costs to society of health and happiness problems, since the economic stresses can be pretty bad for some.)
So the question is why isn't supply rising? Is it because existing landlords aren't funding housing construction or the difficulty of entering the market?
Surely it cannot be that the supply of land is that limited. Or is it? Due to zoning regulations?
By "not entirely", I mean that while land value often dominates, lowering it doesn't solve the problem, because even if you somehow acquired a city lot for $50k in the Bay Area, you wouldn't be able to build a house on that lot for $100k. So, solving one problem doesn't make it affordable.
Landlords lobbying against new development under various guises (environmental, "character", "history"); landlords very cheaply withholding vacant land from use (minimal taxes to pay, no rent to pay, no penalties for vacancy); landlords utilizing zoning regulations to prevent effective use of other people's land
It’s zoning, it’s environmental review, it’s historic/landmark review, it’s good neighbor agreements, it’s disorganized and/or corrupt permitting departments, etc. All of this gets weaponized against new supply. Ultimately. City electeds answer to voters, not builders, so they get the government they deserve.
Some places are building, adding supply, and consequently lowering prices. Austin is a prime example.
From JosephPolitano on X:
Last year, Austin MSA (population: 2.4M) permitted 21,300 units worth of 5+ unit apartment buildings—more than LA (pop: 12.8M) and SF (pop: 4.6M) combined.
San Francisco permitted 1,151 housing units over the last 15 months. Austin permitted 1,248 in January alone.
Austin averages 28+ units per day this year. San Francisco has allowed 15 units total in all of 2024.
In a good system, government doesn't subsidize cost. It just enters whenever the system is broken to work based on supply and demand of market.
In LA, you used to have a ton of extremely cheap studio apartments. We're talking $600 for a nice studio apartment with its own bathroom, you had SROs as well which while not luxury apartments, provided housing.
But the vast majority of this housing stock was very old and created before there was thousands upon thousands of regulations, for example most apartments in Los Angeles need to be constructed with parking. You have to have a certain amount of outdoor space, etc. So you end up having housing cost twice as much as it really needs to .
It's really sad too, because just 15 years ago or so you could have a minimum wage job and afford your own place. Now that's not really obtainable anywhere in the United States. I've met tons of young adults, some even ranging into their 30s who have really bad home lives but can't afford to move out .
Solutions to this are often really short-sighted, you have affordable housing units going up which are costing $600 to $700,000 for the city to build. Obviously this just doesn't work so you have a bizarre lottery system just to have a roof over your head.
Personally I think the solution would be a combination of subsidized high speed rail and an aggressive rethinking of what a town needs to be. Imagine being able to hop on a high speed train that goes about 150 miles an hour.
You could have a community of affordable housing that's a short train ride away from San Francisco, LA, or any other unaffordable city.
I've also noticed you have a very bizarre system where many working-class people, rail operators, firefighters, teachers, etc. They have super commutes which are ranging from 1 to 2 hours each way just to get to work.
I think a big part of the solution is remote work. Uncoupling as many jobs as possible from specific locations changes the game substantially.
There are a wide variety of issues at play: high interest rates, localized shortages of construction workers, rising material costs, zoning restrictions, local opposition and years of underbuilding.
Seems to be the same thing, just in a different "market"
If this is "wage fixing" by the employer, what does this say about sites like levels.fyi for employees? Is that also "wage fixing"?
Those guidelines were rescinded by the Biden administration last year due to concerns that algorithms eroded the distinctions between past/aggregated and current/disaggregated data.
I can scarcely imagine what would be required to try to prevent this. Call up AWS and order them to block a bunch of ports, hope there's no jumpboxes or vpns on odd ports? Run deep packet inspection and hope there aren't web terminals in use?
Assuming you do get network access, assuming you're not afraid of employees messing around while you are raiding, it's still a nightmare. The office systems and the product are probably just so convoluted & interwoven in most companies.
Not while there is a housing crisis
One thing is owning your house and wanting it’s value to appreciate, another is cornering people to bleed them dry leveraging the fear of homelessness
Meanwhile the perpetrators will reorganize and lobby their misdeeds into legality.
For more concrete specifics, reorgs and lobbying are both costs, so you can rest content that this effort imposes costs.
i'm not saying it's not criminal, i just don't think i understand what american laws they're breaking by doing this.
so based on this context and some other comments, it seems like the potential crime isn't so much that they use these sources to algorithmically suggest a price or contrived vacancy, it's that their agreement enforces that any of their subscribers has to use their suggestions on price and availability, thus making it likely price fixing. correct?
They're using non-publicly data provided by their friends/partners to set rental rates. This data includes lease length terms, de-marketing reasons, etc. They then use this data to set a price on a specific unit. If I used their software and was putting a unit up on the market, they would have the price they recommend. If I disagreed with that price, I wouldn't be able to change it. I had to submit an appeal to RealPage, they would review my appeal, and decide if the rental rate was correct or not. I, as the property owner/management company, have lost all ability to set rental rates myself to the complex I own or work for.
And due to their pricing being compared to their own units, or to their partners units, this amounts to price fixing.
If they scraped apartment complexes websites and got public facing pricing data available there, that would be one thing. It's the fact they get all this non public data is extremely problematic part.
Some quotes:
> concerted action can take many forms—including, inter alia, competitors’ jointly delegating key aspects of their decisionmaking to a common algorithm, because doing so “joins together separate decisionmakers” and thus “deprives the marketplace of independent centers of decisionmaking.”
> As technology has developed in the 133 years since the Sherman Act created a federal prohibition on price fixing, firms have evolved the mechanisms they use for reaching unlawful price-fixing agreements. In-person handshakes gave way to phone and fax, and later to email. Algorithms are the new frontier. And, given the amount of information an algorithm can access and digest, this new frontier poses an even greater anticompetitive threat than the last.
> The question in this case is whether the defendants have violated Section 1 of the Sherman Act by allegedly knowingly combining their sensitive, nonpublic pricing and supply information in an algorithm that they rely upon in making pricing decisions, with the knowledge and expectation that other competitors will do the same. Although not every use of an algorithm to set price qualifies as a per se violation of Section 1, taking the allegations set forth in the complaints as true, the alleged scheme meets the legal criteria for per se unlawful price fixing.
(emphasis mine)
> To begin, the complaints allege that RealPage’s proposal “contemplated” and “invited” concerted action among the landlords. In fact, its “intent to create coordination among users,” including its “aim” of “increasing revenues by raising rents,” was “transparent to all.” Among other things, RealPage required each user to submit real-time pricing and supply data to it, and RealPage’s marketing materials allegedly “touted” its use of “non-public data from other RealPage clients,” enabling them to “raise rents in concert”; as well as the algorithms’ ability to “facilitate collaboration among operations” and “track your competition’s rent with precision.”
> Indeed, the complaints also contain ample allegations on how RealPage directly constrained the “deviations” from its suggested prices, including by enforcing and monitoring compliance with those prices, so the landlords effectively delegated aspects of their pricing decisions to RealPage.
> Indeed, RealPage allegedly touted this feature—stating in a press release that it gives clients “the ability to ‘outsource daily pricing and ongoing revenue oversight,’” such that RealPage could “set prices” as though it “own[ed]” the clients’ properties “ourselves.’”
You can think of RealPage's role as a facilitator that gathers competitors together and says "let me set all of your prices, if enough of you agree then you won't need to compete and we'll all make a lot of money together." That is illegal under antitrust law.
> Let’s just change the terms of the hypothetical slightly to understand why. Everywhere the word “algorithm” appears, please just insert the words “a guy named Bob”. Is it ok for a guy named Bob to collect confidential price strategy information from all the participants in a market, and then tell everybody how they should price? If it isn’t ok for a guy named Bob to do it, then it probably isn’t ok for an algorithm to do it either.
Full talk from 2017: https://www.ftc.gov/system/files/documents/public_statements...
/s
It'd be one thing (still not good, but less problematic) if it was merely informational. But you also have RP requiring 90-95% compliance with their prices (including mystery shopping), requiring landlords to get RP's "approval" to go against the recommendation ("you mess with everyone when you don't", which if you're actually competing in a free market, why would you care?), and even up to and including advising their customer's execs of "problematic" property managers (those who are not complying).
I'd be curious to see the vacancy rate data.
https://www.costar.com/article/961023632/atlanta-multifamily...
As someone who has been the target of an overzealous law enforcement investigation, these investigators love to come up with a larger conspiracy to fit their narrative.
It could just be too many properties are owned by a few people and they have too much pricing control over entire regional markets… too bad we don’t have a choice but to pay when you need somewhere to live.
I suppose all we can do is speculate until the evidence is shown.
Presumably, RealPage can sell its services for a far higher price with the conspiracy than without. It doesn’t take a genius to periodically poll competing landlord’s rental prices, either via telephone or internet search.
What does take a genius is to deliver the benefits of being a cartel and also deliver plausible deniability to avoid legal/punitive costs.
The coordination is the service. Realpage is literally offering CaaS (cartel as a service). The "market insight" would be nearly valueless without the guarantee that Realpage was signing contacts with your competitors that prevents them from undercutting your prices (and vice versa).
That's not how late stage capitalism works. Quite often it's closer to winner take all.
Think about it this way, you need to buy a piece of management software that costs $1000 per month (or $10,000 whatever, just a healthy chunk of your revenue). They both do the job well enough so they aren't completing on capability. Now imagine one of them earns you 25% more by using it. Well, everyone that rents is going to be interested in that sales pitch. Capitalists like more money for the same expenses.
If you're familiar with the area, do your research, and have some experience, you can get a number pretty quickly.
RealPage offered to do that work for you - but once they are doing for a certain percentage of the market in an area, they become controlling of that market, and you can get "harmonic errors" that don't get corrected, because they control too much of the supply pricing.
They essentially turn what should be a competitive market to a monopoly via collusion.
No Rent Control Destroys Communities
“Rent Control” is just price fixing in favor of the consumer, but has also a litany of issues including the quality of the community formed
Example if rent control forces prices down, but inflation makes the cost of maintenance high, then cost cutting will be done (poor service, poor landscaping, outdated appliances, less renovations, less security).
Saying to just do rent control is just as bad as saying let free market run wild regardless of price fixing/collusion
Wonder if this is just the tip of an iceberg? What other industries might be doing similar things?
Not SaaS specifically, but basically all of healthcare is monopolized through hospital group purchasing organizations.
It’s important to get this right, or we won’t be able to solve either of these problems (skyrocketing rents & homelessness).
Ridiculous claim: https://www.pewtrusts.org/en/research-and-analysis/articles/...
Sure, correlation vs causation blah blah. This correlation persists even when controlling for most other variables people can think of:
> A large body of academic research has consistently found that homelessness in an area is driven by housing costs, whether expressed in terms of rents, rent-to-income ratios, price-to-income ratios, or home prices. Further, changes in rents precipitate changes in rates of homelessness: homelessness increases when rents rise by amounts that low-income households cannot afford. Similarly, interventions to address housing costs by providing housing directly or through subsidies have been effective in reducing homelessness. That makes sense if housing costs are the main driver of homelessness, but not if other reasons are to blame. Studies show that other factors have a much smaller impact on homelessness.
> Much of the research looks at the variation in homelessness among geographies and finds that housing costs explain far more of the difference in rates of homelessness than variables such as substance use disorder, mental health, weather, the strength of the social safety net, poverty, or economic conditions. Some vulnerabilities strongly influence which people are susceptible to homelessness, but research has repeatedly concluded that these factors play only a minor role in driving rates of homelessness compared with the role of housing costs.
A platitude about correlation vs causation is downplaying what we know about this specific situation.
It stands up both to intellectual review and research studies. It’s a very clear idea that higher rents are harder to pay for, so it’s more likely you can’t pay. It’s conceptually sound AND backed by research.
> Especially visible homelessness
In many parts of the country visible homelessness is a small fraction of the total homelessness. For example, historically Boston had 5% of the homeless population on the street.
Homelessness doesn’t look like what people see. For every homeless person laying on the sidewalk having a health crisis there are 10-20 more people in homeless shelters or cars. This is where the homeless families are.
If you have bad luck (eg medical expenses, car crash etc) and suddenly can’t afford rent, high rents make it hard to get enough money to bridge that gap. This is a real risk for low-income workers - one surprise bill could easily deplete savings and risk not paying rent.
If you’re just irresponsible or handicapped and can’t work full time (eg mental health issues, physical health issues) and have trouble maintaining income and savings, then expensive rent makes it more likely you won’t earn enough any given month.
Hell, if you’re a drug addict and barely able to hold a job and always looking for your fix, high rent makes it harder to find a slummy house to get out of the rain.
You can find PLENTY of data on homelessness from your city’s homeless Census which they do every year. It’s a rigorous process and it’s done in a controlled manner in every major city in America.
The execs were from Texas and when they presented to the MyNewPlace team, they told us SFers with smug self-satisfaction that drug testing would be required as a condition of employment.
I was not and am not a heavy drug user; I am anti-surveillance state.
I helped a bunch of fellow devs (including myself) apply for medical marijuana prescriptions (cannabis was not recreationally legal in CA at the time) and when proffered the RealPage offer of employment, I resigned on the spot.
This is my look of smug self-satisfaction that the RealPage execs are now under Federal scrutiny for monopoly price-fixing.
Ultimately, the tests were never administered after tremendous push back. The policy was not revised, but just not bothered with. The funny thing, is this was in a state that I swear will be the absolute last state to allow for any kind of legalized use.
I'm in the same boat: I don't partake, but neither do I want my boss watching me on my day off. Two related stories:
1. A friend went through the same process as you. The whole Bay Area team refused to take the tests. New corporate boss: "But we test everyone!" Local team: "Not here, you don't!" Faced with a choice between firing the entire new acquisition or getting some sanity, the buyer modified their supposedly inviolable policy to exempt CA employees.
2. I was the CISO at a prior gig when an enterprise customer was evaluating our service. They checked all the usual boxes and then asked, "oh, and you do drug test all your employees, right?" The CTO and I looked at each other and I had the privilege of being the one to say, no, we do not and will not test our employees. Either they're performing up to expectations or they're not. That felt great.
I had a beer yesterday and I know I won't be in trouble for that. Why should I remotely care whether a coworker smoked a joint at the same time? We're both sober and working today.
Edit: CTO and I laughed about it later. What counts as a passing score locally? Is there a minimum value, too, or just a max?
https://www.tiktok.com/@newsforthought/video/715903134243979...
What's going on is that Vanguard, BlackRock and (other?) private equity firms have bought up huge swaths of real estate in the US as secure investments. This started around 20 years ago when financial advisers like Suze Orman recommended Vanguard as a vehicle for retirement savings alongside a 401k, Roth IRA, etc:
https://www.suzeorman.com/resources/mutual-funds
https://www.oprah.com/money/financial-freedom-by-suze-orman (2008)
Now during a slow housing market, private equity firms are holding land and housing, rather than selling for a loss like banks did when the 2008 housing bubble popped. Due to a weak economy post-pandemic, inflation driven by corporate greed to prevent losses by the wealthy during those ~2 years that labor stayed home from the workplace, and high interest rates which resulted from the Federal Reserve trying to slow that inflation. Their infinite holds have resulted in record high rents and mortgages due to low volatility from lack of competition.
Depending on how the presidential election goes, and if there's a recession or stagflation in the following year(s), private equity firms will likely find themselves under increasingly high pressure to sell and free up capital to pay their investors dividends. Then private equity firms may go to the federal government for a bailout just like Fannie Mae and Freddie Mac did.
Basically Gen X, Millennials and Gen Z on Main Street will be asked to bail out private equity firms on Wall Street to save the retirements of Boomers. The key difference between the Housing Bubble popping and today being that people under 50 have been under the yoke this whole millennium: underemployed, working excessive hours and multiple jobs while being denied raises/savings/retirements and even having their social safety net slowly dismantled (for example the unemployment work search requirement used to deny benefits after the mid-2000s) since the economy became financialized after the 2000 Dot Bomb.
At every turn, rather than investing in stuff like automation and renewable energy, prioritizing work/life balance like in Scandinavian countries, or even promoting unions/guilds/cooperatives, the US outsourced 100,000 factories under the GW Bush Administration and stonewalled nearly all pro-labor programs under the Obama Administration. Leaving us with a monopolized and duopolized economy that nickel and dimes working people and blocks them from participating in capital investment by labeling low-dollar trades as "pattern day trading" in 2001, for example:
https://en.wikipedia.org/wiki/Pattern_day_trader
After a lifetime of exploitation, it's a bit like the Lannisters having to go to the Iron Bank when their gold mines stopped producing. Or billionaires who can't find where all of the money went, begging young people for their last penny so their grandparents can retire in dignity. It.. raises some eyebrows to say the least.
RealPage may be the first in a long chain of dominoes that leads to young people having real leverage over moneyed interests. It will be curious to see how they respond - whether they bow to the status quo or organize to demand structural changes in the economy like during the Progressive Era, New Deal and post-WWII economic expansion before trickle-down Reaganomics flatlined wages as productivity increased after 1980.
>https://en.wikipedia.org/wiki/Pattern_day_trader
wtf are you talking about? I don't see how that meaningfully prevents working people from "participating in capital investment". It only applies to day trades (ie. buying and selling the stock in the same day) on margin accounts (ie. you're taking out a loan to buy the stock). If you're doing that, chances are it's gambling, not "investment".
Do not blame the exploited, blame the exploiter.
I don't see how this can be accepted and yet "just following orders" is viewed negatively.
Because of the coercion the company puts on its customers for bucking what their software says to do.
Not saying it's okay, just why do we only hear about Realpage
My guess is since Realpage is biggest and their business is all about price fixing, Feds figure convict them, shut them down and MAYBE send exec or two to jail and rest will fall in line so quickly.
- RealPage makes the price increases opt-out with required justification.
* RealPage actively suggests a price for each unit without exposing the underlying fundamentals to the customer, rather than displaying aggregate data and allowing the customer to make a pricing decision.
* RealPage incorporates private data, including vacancy data, from all participating companies into their pricing model in order to generate a shared agreement about pricing. This information is being voluntarily shared in order to manipulate the market - that is, they broker horizontal collusion between players in a vertical industry. A group of landlords calling each other to say "we're going to make sure the vacancy rate stays at 5.5% this year" or "hey let's make sure we don't let these units go for under market value even though they're empty" would also be illegal collusion, it's just being laundered through an algorithm.
This is the big smoking gun that makes it a hub-and-spoke price fixing ring (also called vertically integrated horizontal collusion - ie, a cartel).
There's also the part where RealPage bought their main large-scale competitor, Lease Rent Options (who claimed to use only public data, in contrast to RealPage), in a 2017 deal that probably shouldn't have passed antitrust review, so there isn't anyone else to blame (they also own Buildium).