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US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

klobuchar.senate.gov

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Re: US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

#31

Post by bobthepanda »

joenot443 wrote: post #5

> “As recently reported, software offered by RealPage uses pricing algorithms to adjust prices on vacant apartments in real time… The program may also induce landlords to charge the rents recommended by the algorithm, putting upward pressure on prices and decreasing the availability of affordable apartments” That’s the meat of it, really. Someone more knowledgeable can speak more confidently, but I’d be pretty surpri…

The question I think is interesting. If you replaced an algorithm with a group of people, would a centralized entity recommending rents be price-fixing, just outsourced?

Re: US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

#32

Post by jmyeet »

UncleOxidant wrote: post #25
jmyeet wrote: post #21

Price controls are ineffective long term but can be a useful stopgap measure in the short term. The only solution to this is dealing with supplyside issues, notably the artificial constraints on housing supply. This is longer term.So the pricing algorithms are a natural reaction to market forces. Here are some more important things you can do in the short term to increase supply: 1. Outlaw (at the local and state lev…

> 2. Start punitively taxing second homes; I'm assuming you mean punitively tax 2nd homes that aren't being rented out?

I distinguish between "investment property" and "second homes". An investment property is a working asset that's specifically there to generate income (eg by renting it out). "Second homes" here are really non-working assets (eg the family lake house).

Re: US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

#33

Post by johncessna »

psychlops wrote: post #23
gonzo41 wrote: post #14

Earlier quoted context omitted.

This is not true. I encourage you to listen to this two part pod cast about this issue. Robert Evans goes into depth about this. Part one https://www.iheart.com/podcast/105-behind-the-bastards-29236... Part Two https://www.iheart.com/podcast/105-behind-the-bastards-29236...

I literally couldn't make it through the noise to find signal. Is there a specific slot of time to start?

It's pretty rough. At the 4-5 minute mark the schtick stops.

Re: US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

#34

Post by Ancalagon »

jmyeet wrote: post #21

Price controls are ineffective long term but can be a useful stopgap measure in the short term. The only solution to this is dealing with supplyside issues, notably the artificial constraints on housing supply. This is longer term.So the pricing algorithms are a natural reaction to market forces. Here are some more important things you can do in the short term to increase supply: 1. Outlaw (at the local and state lev…

I feel like the damage from capitalism has already been done and point three would just restrict future supply even further by making new construction even less profitable. Most places needing new construction aren’t in areas where developers would really consider building ultra luxury anyways

Re: US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

#36

Post by yieldcrv »

vkou wrote: post #7
colechristensen wrote: post #4

Earlier quoted context omitted.

I’m quite happy to see this having lived in apartments driven by automated pricing which is obviously a new kind of cartel.

Is it really a cartel, or is it just landlords squeezing every penny that they can? With there being a lot of pennies to squeeze due to a double-whammy of supply shortages, and growth in wages for the upper 30% of society? If people didn't have spare money, rents wouldn't be growing (As nobody would be able to pay), and if vacancies were higher, landlords would have to accept lowball offers.

basically, having uniform rental and vacancy data is one thing, that's nice and new. having uniform rental data to make dynamic pricing based on supply and demand would be great! that's not what's happening here. the uniform data is being used to more opaquely bolster the price of the available units, and that's not good. its anti-competitive at it isn't supporting price discovery, even though it has the capability to do the opposite.

Re: US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

#37

Post by tptacek »

Forgeties79 wrote: post #28
tptacek wrote: post #22

Earlier quoted context omitted.

PE firms own only an infinitesimal fraction of all available housing.

You’re not wrong but it’s a little more complicated than that. https://www.marketplace.org/2022/03/02/how-private-equity-is...

Is it any more than just a little more complicated? None of this establishes how PE firms would gain any sort of pricing power.

Re: US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

#38

Post by treeman79 »

chatmasta wrote: post #2

I was disappointed to see this was not about Blackrock and other private equity groups.

A Black rock house company (invintation homes)lied repeatedly about weird smells in my house. whole family has permanent injuries from it.

Re: US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

#39

Post by techsupporter »

missedthecue wrote: post #20
ceejayoz wrote: post #11

Earlier quoted context omitted.

Landlords banding together to use one tool to set all the prices sure sounds like a cartel.

But they aren't banding together. That's like saying devs are banding together to publish apps on the Apple App Store. There is no mechanism for keeping other landlords from leaving the software, and there are multiple competing alternatives.

> there are multiple competing alternatives

For landlords, yes.

Not for tenants. That's the crux of the issue here. Tenants have no way of knowing what is happening or why and so the market becomes an anti-competitive cartel. This is doubly so in markets like Seattle, where a single-digit number of management companies cover large swathes of the market.

It's akin to people defending binding arbitration clauses by saying "just choose another competitor." When all of the competitors in the market, especially in a must-have-it-or-else market like housing, are doing the same thing in the same way, there's no choice and no competition.

Re: US reps urge DOJ to investigate anticompetitive conduct affecting apartment rent

#40

Post by mjevans »

jmyeet wrote: post #21

Price controls are ineffective long term but can be a useful stopgap measure in the short term. The only solution to this is dealing with supplyside issues, notably the artificial constraints on housing supply. This is longer term.So the pricing algorithms are a natural reaction to market forces. Here are some more important things you can do in the short term to increase supply: 1. Outlaw (at the local and state lev…

You're close, and those are all reasonable steps.

Re 2: My test is, the owner(s) (all on the title) must _reside_ in the house for at least 35% of the year. That allows summer / winter homes for snowbirds, as well as moves, but makes it impossible to get the tax break on 3 properties in a given year.

House ZONING, anti-NIMBY, is also a major contributing factor. There should be rules much more like Japan's 'impact based' zoning, and automatic approval for plans that obviously surpass minimum standards for various E.G. environmental impact assessments and other forms of red tape. These benefits should also be structured to encourage housing within existing impacted areas (cities, improve density), and give benefits for exceeding minimum codes and being less impactful than allowed.

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