Pricing software adds billions to rental costs, White House says

If the market was free I’d agree but that invisible hand likes to smack folks like you and me pretty hard…

> Anything that provides information makes a market run smoother

This is not necessarily true. Market failure can occur due to information which is provided asymmetrically or which facilitates collusion.

Do you think that describing price fixing as merely parties "providing information" to each other makes it not a crime?

If rents go down, as they should, you won't have people flooding into new construction unless it's cheap.

You're not wrong about it being a housing supply issue, but it's not because we don't have enough - it's because this software-facilitated rental price fixing and collusion scheme allowed a few individual property management companies to take over 80% of a market, raising prices so far above valuation that they could warehouse more than 20% of those rentals while still meeting their repayment obligations, artificially pushing people into houses, which private equity had also been investing into. It was the biggest scam of the century.

Supply doesn't imply mere existence, otherwise someone could just claim all the gold in the sun was theirs. In this case, the demand was for "affordable housing", and the supply was artificially constrained so that mortgages became more affordable than rent.

And who are the customers of mortgages? Largely wealthy pensioners. Blame them, not the feds (for housing, at least... it's not a federal power). Hell, blame the local homeowners that voted to zone out new construction, MFDs, manufactured housing, or anything that might allow any transient or poverty associated person into their schools and communities.

How is any of what you're saying related to the issue at hand?

Is this a defense of cartels?

"We're not fixing prices, we're merely sharing information"

I don't have issue if the parameters the pricing operates is transparent and reviewed by government. e.g. What what you pay as tax depends on 100s of different factors.

"Anything that provides information makes a market run smoother."

Depends. If the information provider is also a middle man that profits from manipulating the information, then that can unbalance the market.

E.g: if renters pay through realpage, then the incentive for realpage is to increase the prices to collect more fees.

Except that it's not just "providing information" as it does not supply information to both the buyer and the seller. In a stock market, both the buyer and seller see the range between bid and ask, and historic prices are readily accessible. That is very much not what RealPage was doing, as it exclusively focused on providing pricing information for landlords from other landlords, enabling them to collectively increase prices without informing renters.

The Behind the Bastards podcast on this topic is quite informative; see: https://www.iheart.com/podcast/105-behind-the-bastards-29236... .

To the users of this software, it isn't an oops at all, it's absolutely _desired behavior_.

To hapless tenants, it is a negative. They're the _victims_ of the algorithm, not the users.

I think the incentives are completely clear, it’s about maximising $$$, profit, returns.

People are not making mistakes, it’s a conscious effort to increase profit as much as possible. The only mistakes is allowing this to exist and not regulating it out of existence.

What’s wrong with the used car market? Prices are basically a commodity. https://www.cargurus.com/ aggregates national prices and makes price discovery a breeze.

Typically these desirable places have optional amenities that people want, like jobs.

Not many tech positions available in Huntington, WV.

Why is the parent downvoted?

It's the truth. The US is near the all-time high record high number of housing units per capita. We'll likely exceed it some time within the next 2 years.

There is absolutely no housing crisis of any kind. There is a _density_ crisis, that is forcing people into unaffordable locations.

The problem is not simply the use of algorithms. The problem is that the algorithm is coordinating prices for a large percentage of rented properties. It's effectively a cartel.

Isn’t the real problem not enough units?

If there are enough units, there’s no need for extra taxation on vacant units as it becomes a self-correcting problem (or someone pays a whack of property tax while consuming less than the proportional services, meaning they’re subsidizing others).

There is a strong negative correlation between vacancy rates and rent, that would immediately deincentivise the new housing construction that actually leads to lower rental costs.