If the seller is able to unilaterally hike rents beyond the level which people are willing to pay but they pay it anyway because the alternative is total life failure, then it's obviously not a functioning market.
If rents are paid no matter what, you dont need AI to tell you to set it high.
But we know rents arent limitless because ability to pay is not limitless.
It says it right in the article's subtitle:
>Software the U.S. government says is illegal gives landlords ability to coordinate rent hikes.
The AI (in this instance "AI" just means "a blackbox algorithm") is basically an excuse to provide plausible deniability on market collusion. Combine this with the relatively inelastic nature of the demand for housing, it creates an avenue for abuse. Without the AI, you don't have collusion meaning increased competition will produce a lower and fairer market price.
If rents are inelastic, you dont need collusion? You just charge as much as you want?
Ahhh, ok, so why wouldn't this happen even with AI?
Isn't the population of landlord's heterogenous? Some landlord's are happy to leave their units empty for a year, while others don't want to leave it empty between tenants?
So in that case, even with collusion, you'd have some landlord's undercutting other landlords?
Its also accurate that social pressure on the landlord has always been an option, as opposed to disdain of the nomadic people that are interested in paying the given hiked rate
Even a perfectly inelastic (vertical) demand curve still intersects the supply curve at some price.
In other words, even if I would pay infinite dollars for a widget, I would still purchase from the cheapest supplier.
You could probably just have software without any AI that says to everyone who uses it "raise prices by 10% this month" and then everyone does it.
Maybe that's all it does anyway, who knows.
I think the real problem is that it constitutes a cartel.
You’re mischaracterizing the problem. It’s not that shelter is a basic need that can’t be fulfilled at any other apartment building. It’s that a 14-month lease with a 10k lease break penalty will readily ruin anyone’s life on the spot. Paying 50% more for month-to-month isn’t feasible for anyone either.
There are also people who can move to other locations.
If rents are up, you need more houses, it's really not that complicated.
The supply side has been imploded by government decree, leading inexorably to the current debacle. I personally know several builders closing down their businesses. Not for lack of demand, of course, but because construction has been made impossible by vacant-eyed bureaucrats.
Dear central planners and jr. totalitarians:
This self-imposed disaster won’t cease until you decide it’s time for it to be over. Or, keep voting as you have - your choice. You do you.
It’s great for banks and financial institutions and their investors to keep housing prices going up.
https://www.strongtowns.org/journal/2024/7/15/federal-and-st...
I see nothing wrong with this market at all. The reality is that there’s plenty of people willing to live in these apartments, often splitting the rent with roommates. The more people that do that, the more the rent goes up because now it’s acceptable to have two or even three incomes paying what used to be the rent for a one bed room.
The only way for the little guy to win this game is to not play. Screw those overpopulated metros and go live somewhere else.
https://www.cbc.ca/news/canada/london/london-ontario-real-es...
The median price of a single-family home is C$685k. This is one of the cheapest cities in Ontario.
If I "go live somewhere else", that means moving to Texas where I can triple my take-home pay as a software developer for a significantly lower cost of living.
Labour is not a perfect commodity that can be moved around. Once someone leaves Canada, they're probably not going to cut their earnings by moving back, even if we fix the housing crisis.
This has already happened with AI. Go look at Geoffrey Hinton's students and researchers at the University of Toronto.
That sounds great, to be honest. Why don't you do just that? Sounds like Canada deserves it.
https://x.com/danluu/status/1351785083598893062
Anyone who can code is fleeing this country en masse and the government's response is to bring more people in from abroad to address the "skills shortage". This depresses wages further, because the government views us as interchangeable cogs in a machine.
This causes GDP per capita to shrink as we bring in several less-efficient people to do the work of one. GDP per capita has gone from over 90% of the USA in the 80s to 73% now.
https://www.theglobeandmail.com/opinion/article-canada-is-no...
I don't believe Canada deserves this. We're a first-world developed country that my ancestors spent centuries building that is actively reducing our living standards so we can compete against WITCH.
I visited the American Jewish History museum in Philadelphia recently, and they had a recreation of a flophouse from the 1920s with a 100 sqft bedroom in which a recent immigrant doing manual labour would live.
My classmates in the 2020s that are immigrants are paying most of their income to split that room in two.
I'd rather go to a museum in my country and tell my kids how much better their lives will be than mine. I want to give back to the community that raised me.
With urbanisation going up to 11 there are not many "somewhere else cheap to live" for many professions. People can't easily find a job at a place with lower rents because there's a reason it has lower rents: it's less desirable, has less opportunities, so on and so forth.
For the privileged class of office workers with remote jobs that's an easy solution, and one that I see many peers taking over time, for the rest of society it's not feasible. If you were a theater actor (or teacher), you can't go live in the middle of nowhere, you won't have many peers, you won't have many venues, companies, etc. to work with. Now apply that logic to many professions who need a community around (of other workers, of companies or customers) to do their work and you will realise that for the vast majority of people it's not feasible to flee expensive urban centres.