Comment by falcolas | Hacker News Reader

Comment by falcolas | Hacker News Reader

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It is, by the most recent data I can find, short by between 4 and 7 million homes. But other reports state that there are in excess of 10 million homes sitting vacant. No, the two numbers are not interchangeable due to location of the homes, but they're both pretty low.

That means that the shortage is between 3% and 5% of the total homes available in the US (around 140M). And given there are under 700k homeless in the US (I wish it were lower, but it is lower than I was expecting before looking it up), most people are finding homes to live in.

By most measures, and given how new homes are being built every single day (and are very, very likely being sold as soon as they're up), it's not even remotely close to "woefully inadequate".

And for a moment, let's just say we agree and the supply is woefully inadequate. Two things can be true at the same time. A shortage of housing supply dovetails nicely with landlords colluding to identify the highest possible price point for their housing.

There absolutely is a housing shortage in the places people want to live. That's why prices are high. The economics here are pretty basic ones of supply and demand.

> And for a moment, let's just say we agree and the supply is woefully inadequate. Two things can be true at the same time. A shortage of housing supply dovetails nicely with landlords colluding to identify the highest possible price point for their housing.

And yes, they do dovetail. The best way to cut landlord profits is to give tenants a lot of options. RealPage is not a good actor - there's no real upside to it from what I can tell. I'd be fine if they just went away. However, broadly speaking, given more supply, rents fall. There is just tons of empirical evidence for that at this point.

> However, broadly speaking, given more supply, rents fall. There is just tons of empirical evidence for that at this point.

That will depend, honestly. The popular narrative that backs this is the 1-2 property landlord who can't afford to leave their units vacant.

The problem is that this type of landlord owns fewer total units than those who own 25 or 50+ units. And those kinds of landlords are both becoming a larger majority (their share of ownership is constantly growing) *and* they have the ability to let units sit fallow to keep the prices on the remaining stock high.

That is to say, empirical evidence is not the final authority in a market that doesn't resemble what it did even 10 years ago.

The claim that "supply and demand" somehow do not apply to housing as they do most goods is an extraordinary one, and extraordinary claims require extraordinary evidence.

Once again, yes, RealPage might be able to push things a few percentage points up and that's bad, but it is simply not capable of turning Houston prices into Los Angeles prices.

> The claim that "supply and demand" somehow do not apply to housing as they do most goods is an extraordinary one, and extraordinary claims require extraordinary evidence.

The extraordinary evidence is the proof of collusion - which we have. That's all that it takes to corrode away the basic tenants of a free market, and it's why collusion is policed the way it is. It is, frankly, a mistake to play down the impact that collusion between landlords has on the rental market.

"When competitors agree to fix prices, limit production, or engage in other forms of collusion, the natural balance of supply and demand is disrupted. This disruption typically results in higher prices for consumers, as the competitive pressure that usually drives prices down is absent."

"Collusive practices can also lead to a misallocation of resources, as they distort market signals that guide investment decisions. In a competitive market, prices signal where resources should be allocated to meet consumer demand most efficiently. When prices are artificially set through collusion, these signals are corrupted, leading to resources being channeled into less productive or less needed areas."

https://accountinginsights.org/collusion-in-markets-detectio...

> Once again, yes, RealPage might be able to push things a few percentage points up and that's bad, but it is simply not capable of turning Houston prices into Los Angeles prices.

You didn’t address the point though. If the issue is collusion, why haven’t landlords hiked mid-tier city rents to San Francisco levels?

Or maybe it’s simply supply and demand.

Or maybe people living in mid-tier cities can't afford San Francisco grade rents? If we need to pull out a catchy (if overly simplified) Econ 101 principle, we could use "What the market can bear," and Houston jobs don't pay as much as jobs in San Francisco.

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