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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

#121

Post by naijaboiler »

reeddavid wrote: post #109

The recent outrage over RealPage seems misplaced, at least here in Seattle where demand for housing is so much higher than supply. There are so many restrictions on new housing. We're considered a liberal city, but plenty of our residents have really conservative views around housing and work against increasing housing supply. It seems to me that RealPage simply helps landlords assess the market price for apartments.…

I disagree. Realpage is essentially turning a competitive market (multiple buyers, multiple sellers) into a quasi-monopoly market (multiple buyers,one seller). Econ 101 tells you the result of that is higher prices, lower quantity, less incentive to improve or innovate.

State policies may indeed be already limiting supply, realpage makes things worse.

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

#122

Post by naijaboiler »

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.

It is effectively a cartel

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

#123

Post by ilammy »

thriftwy wrote: post #29
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…

If you tax second homes, people will not buy these, not put them out for rent, and developers will build fewer real estate. This may only benefit if you have already borked your real estate market so that virtually nothing gets built anyway.

> If you tax second homes, people will not buy these, not put them out for rent

Which is exactly the point of the policy.

If the society recognizes that private landlordship is net negative like smoking, it’s expected to be regulated out of existence.

Why should people wanting to buy a second home be given priority over people wanting to buy their first, from the moral stance?

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

#124

Post by Dracophoenix »

rtpg wrote: post #44
cheriot wrote: post #30

> 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. Wait until she hears about hotels and flights. > The software analyzes non-public data that RealPage gathers from its property management clients, including confidenti…

Hotels and flights are, granted, less essential than a place to live. Remember, you _have to live somewhere_. That is a functional difference compared to other "market-based" things (never mind that "market-based solutions" are a lot less workable when atomicity is lost. Yeah yeah, regulations making things harder to build, I think more should be built! But there are real, "wanted" things in the way of just having ma…

> Hotels and flights are, granted, less essential than a place to live. Remember, you _have to live somewhere_.

What about property tax assessments? Municipal governments don't care about pricing out local residents when they hire companies or banks that do exactly what Realpage is doing (i.e. collecting information, applying some proprietary regression model to it, and spit out valuations). In fact, they can put a lien on what should be your home, even if your one dollar short. The issue isn't market-based solutions. The issue is lack of transparency.

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

#125

Post by cercatrova »

asdff wrote: post #107
rtpg wrote: post #44

Earlier quoted context omitted.

Hotels and flights are, granted, less essential than a place to live. Remember, you _have to live somewhere_. That is a functional difference compared to other "market-based" things (never mind that "market-based solutions" are a lot less workable when atomicity is lost. Yeah yeah, regulations making things harder to build, I think more should be built! But there are real, "wanted" things in the way of just having ma…

Hardly anyone says "I have $200, where can I fly." Usually its "I have to go to X for y reasons, X is already booked and paid for, lets get a flight" at which point you are extorted by the dynamic price model for a flight you must take. It's somewhat hilarious when Spirit in particular overbooks, and tries to offer you money to take a flight some other day, assuming you can just rearrange everything in your life arou…

> Hardly anyone says "I have $200, where can I fly."

Not sure about that, there are entire industries around cheap flights for people that are location agnostic. ScottsCheapFlights comes to mind.

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

#126

Post by pandaman »

ceejayoz wrote: post #55
vkou wrote: post #49

Earlier quoted context omitted.

Drivers don't pick the price in Uber (Or with traditional taxis), they only signal whether or not they are willing to work. You can't be a driver and undercut other drivers on that platform. But nothing stops a landlord from undercutting any other landlord. It's the difference between the Uber 'Marketplace' and an actual market. > The mechanism is "you lose money" Yes, that's a market mechanism, it's not a cartel mec…

> Drivers don't pick the price in Uber... Yes, that's the point. This fact is getting them in hot water in a variety of jurisdictions, as independent contractors are supposed to set their own rates. RealPage is trying to play the same regulatory evasion games - "it's not collusion, everyone just uses our prices". I hope it ends poorly for them.

>independent contractors are supposed to set their own rates

I am missing this point. Uber drivers can set their rates and not take the rides that are below those rates, can't they? Or do you mean they have to be able to make exactly the rate they set, e.g. the driver's rate is $21.25/h, Uber offers only $30/h and more and the driver takes Uber to court saying he could not set his desirable rate and had been paid more?

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

#127

Post by Aunche »

giraffe_lady wrote: post #119
Aunche wrote: post #111

Earlier quoted context omitted.

Reducing rents may also maximize revenue by reducing vacancy. The reason the algorithm recommends landlords to increase rents more often than it recommends them to decrease rents is because the supply of housing isn't growing as quickly as demand. Without this algorithm, landlords tends to set rents in reactive manner, so the price they set lags behind the optimal market price, so when the algorithm recommends the ma…

> Reducing rents may also maximize revenue by reducing vacancy. Yeah but come on were you born yesterday. > The reason the algorithm recommends landlords to increase rents more often than it recommends them to decrease rents The algorithm causing landlords to raise rents is the problem with the use of the algorithm , the subject of discussion. The mechanics of how the algorithm comes to that conclusion may be technic…

> What do you gain from making people think we can't or shouldn't stop this?

Because they aren't doing anything illegal. They are merely facilitating price discovery. If they really were creating a cartel of landlords, then they would be selling a broken product. For example, for simplicity's sake, let's say that a city has a lot of landlords, but all their units are identical and they all follow the RealPage algorithm for price suggestions. Realpage suggests that they charge an exorbitant $10000 per unit, which leads to only 50% of all units being occupied, so your expected value of $5000 per unit. However, if you're a landlord, you'd be better off renting your units at $9000, leading to 90% occupancy. Your expected profit per unit is $8100, so you're actually much better off without the algorithm.

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

#128

Post by ceejayoz »

pandaman wrote: post #126
ceejayoz wrote: post #55

Earlier quoted context omitted.

> Drivers don't pick the price in Uber... Yes, that's the point. This fact is getting them in hot water in a variety of jurisdictions, as independent contractors are supposed to set their own rates. RealPage is trying to play the same regulatory evasion games - "it's not collusion, everyone just uses our prices". I hope it ends poorly for them.

>independent contractors are supposed to set their own rates I am missing this point. Uber drivers can set their rates and not take the rides that are below those rates, can't they? Or do you mean they have to be able to make exactly the rate they set, e.g. the driver's rate is $21.25/h, Uber offers only $30/h and more and the driver takes Uber to court saying he could not set his desirable rate and had been paid mor…

https://www.irs.gov/businesses/small-businesses-self-employe...

> You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.

It's a jurisdiction-by-jurisdiction battle at the moment, but the tide seems to be turning. A number of judges have already ruled that Uber and similar companies exercise enough control over their "contractors" for them to be over the line into employee territory.

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

#129

Post by Aunche »

loeg wrote: post #6
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.

The innovation here isn't the automated pricing, but convincing all the landlords in an area to collude by sharing pricing and demand data with a central organizer. Humans could do the pricing and it would still be illegal collusion.

If they are really facilitating collusion, then they would be selling a broken product. For example, for simplicity's sake, let's say that a city has a lot of landlords, but all their units are identical and they all follow the RealPage algorithm for price suggestions. Realpage suggests that they charge an exorbitant $10000 per unit, which leads to only 50% of all units being occupied, so your expected value of $5000 per unit. However, if you're a landlord, you'd be better off renting your units at $9000, leading to 90% occupancy. Your expected profit per unit is $8100, so you're actually much better off without the algorithm.

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

#130

Post by halpmeh »

asdff wrote: post #107
rtpg wrote: post #44

Earlier quoted context omitted.

Hotels and flights are, granted, less essential than a place to live. Remember, you _have to live somewhere_. That is a functional difference compared to other "market-based" things (never mind that "market-based solutions" are a lot less workable when atomicity is lost. Yeah yeah, regulations making things harder to build, I think more should be built! But there are real, "wanted" things in the way of just having ma…

Hardly anyone says "I have $200, where can I fly." Usually its "I have to go to X for y reasons, X is already booked and paid for, lets get a flight" at which point you are extorted by the dynamic price model for a flight you must take. It's somewhat hilarious when Spirit in particular overbooks, and tries to offer you money to take a flight some other day, assuming you can just rearrange everything in your life arou…

Person 1: "Let's go on vacation in the spring."

Person 2: "Sure, where should we go?"

Person 1: "How about Japan?"

Person 2: "Sounds great, how much are tickets?"

Person 1: "Hmm, they're around $1,600 each. That's too expensive. What about going to Amsterdam instead?"

That seems like a totally plausible exchange.

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