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DOJ sues realpage for algorithmic pricing scheme that harms renters

justice.gov

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Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#311

Post by brookst »

throwaway13337 wrote: post #260

[flagged]

> It's my understanding that this software does that.

Well, sort of. Except your competitor uses the same software, so it calculates prices for both of you. Meaning you don’t have to collude with your competitor, you both outsource the collusion to a third party who takes a cut from the increased revenue you both see.

For more background look up “price signaling”, which was a lower tech way for competitors to mutually raise prices without direct communication. It has also been found to be illegal.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#313

Post by bunderbunder »

rcpt wrote: post #291
pstuart wrote: post #264

Earlier quoted context omitted.

On the demand side it would be nice to keep PE firms from hoovering up all the single family homes. https://www.thesling.org/are-hedge-funds-and-private-equity-...

You do that by building enough houses to make housing unattractive to investment firms

Alternatively, we adjust the tax code to reflect the instinct that people should deserve to keep a larger percentage of money when they actually worked to earn it, and that income that's essentially free to people who already have lots of money should maybe be taxed at a higher rate.

I realize this is a spicy take, but we've really got to get away from this thing where we advantage passive income for wealthy landowners. It didn't work out well for society in enlightenment-era France, it didn't work out well in Victorian England, it didn't work out well in Tsarist Russia, and I'm not convinced that removing birthright qualifications and primogeniture makes all that much more equitable in the modern USA than it did in any of those periods that we tend to look back on as being indefensibly elitist.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#314

Post by delfinom »

throwaway13337 wrote: post #260

[flagged]

You really should read the court document.

https://www.documentcloud.org/documents/25060739-us_et_al_v_...

>135. RealPage acknowledges that revenue protection “may seem counterintuitive to leasing needs.” In June 2023, a landlord complained to RealPage that “something in your model is broken” because “the pricing model is not lowering rents dramatically” despite the client’s high exposure during a busy summer leasing season. RealPage explained that, with revenue protection, “the model still sees the way to make more revenue is to lease fewer units at higher prices.” In other words, the model seeks to “raise rates to get the highest dollar value possible for the leases we can statistically achieve” and ignore those leases that the client wants but the model predicts, using competitors’ data, the client will not get

Just many many anti market functions

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#316

Post by chasebank »

SoftTalker wrote: post #295
tantalor wrote: post #278

Earlier quoted context omitted.

You can't just ban them. Where there is profit to be made, they will find a way around any regulation. You have to change the structure of the market so they no longer see these investments as profitable. One way local areas do this is by "homestead tax exemption" which reduces property taxes if you live in your own home, but this is binary and punishes small landlords equally as big ones.

Those taxes just get added to the rent charged.

Indeed they would, however, the underlying asset value would drop to allow for market rents. That's the point.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#317

Post by HDThoreaun »

oconnore wrote: post #258

I am excited and optimistic that we appear to be applying economic principles to housing! Now that we're getting rid of centralized price controls / collusion, next can we do supply/demand?

YIMBY policy was the biggest issue at the DNC. Most of stars spoke of it in their speech and it was part of the first policy speech Harris gave. Dems are at least acknowledging the issue, but the enumerated powers clause may make it difficult to enact federally. We need to get YIMBY politicians elected locally.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#318

Post by mcmcmc »

Loughla wrote: post #288
candiddevmike wrote: post #267

Earlier quoted context omitted.

Would be interesting to see what would happen if renters had the option to buy the underlying property/unit somehow after being a tenant for a certain time. The goal should be ownership for folks who want it, not a nation of renters.

You can rent your home with x% profit, but after x # of years the home sells to the renter. I like it but that seems like a system VERY susceptible to abuse.

You can bet landlords would be doing everything possible to force renters out just before the purchase window comes open.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#320

Post by FireBeyond »

iamleppert wrote: post #284

[flagged]

This sounds like propaganda:

> RealPage helps tenants pay their rent on time with an innovative financial product, supercharged with AI, that allows tenants to break up their single monthly payment into two digital payments. This helps tenants manage their finances and even supports reporting to credit reporting agencies, allowing tenants to build credit history.

"supercharged with AI"? Did you copy and paste this from RealPage's website? What does AI do to allow splitting payments?

There's a very cogent argument to be made that this credit reporting is an abuse of the credit system for one very simple reason: rent/leasing is NOT a credit line. I have never, ever seen a residential rental or lease agreement that allows you payment in arrears. If you're paying upfront, you're not being extended credit by the landlord, so why should they be allowed to report this to the CRAs as such, not to mention, of course, any delinquencies.

> RealPage is a great help to property managers, but really shines when it comes to the tenant experience.

This literally sounds like astroturf, and not exactly subtle at that.

Also given that one of RP's design goals is "maximizing rental profitability", how does that benefit the "tenant experience"?

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