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Algorithmic rent-pricing litigation expands under new state and local laws

morganlewis.com

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Re: Algorithmic rent-pricing litigation expands under new state and local laws

#11

Post by sophrosyne42 »

Chinjut wrote: post #9
aorloff wrote: post #7

In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws. Then they got sued by the company that was targeted, and immediately waffled and canceled the ban. What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest…

Why would landlords not seek the highest possible rent without rent control?

They would. But second order effects ensure that this very act leads to the decline of housing prices. These effects being eliminated by rent control makes it the premier anti-tenant policy.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#13

Post by dataflow »

sophrosyne42 wrote: post #11
Chinjut wrote: post #9

Earlier quoted context omitted.

Why would landlords not seek the highest possible rent without rent control?

They would. But second order effects ensure that this very act leads to the decline of housing prices. These effects being eliminated by rent control makes it the premier anti-tenant policy.

What second-order effects...? Feels like such an oddly opqaue way to talk about them. And how do you ignore the effect of the fact that rent no longer rises during the life of the tenant, making it lower after a while than it would otherwise be...? (How) is it so obvious that that is dwarfed by the second-order effects of uncontrolled rent that it doesn't even warrant a mention? Because it isn't to me.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#14

Post by petesergeant »

aorloff wrote: post #7

In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws. Then they got sued by the company that was targeted, and immediately waffled and canceled the ban. What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest…

Every rental unit in the city I live in is rent controlled — the government sets a maximum rental increase per unit per year. This is here in the People’s Republic of … checks notes … Dubai. It works great.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#15

Post by arrosenberg »

demibabs wrote: post #3
toomuchtodo wrote: post #2

From https://www.thebignewsletter.com/p/monopoly-round-up-time-ba... > Our work against algorithmic rent-fixing is starting to bear real fruit. Multiple cities have passed laws prohibiting corporate landlords from using rent-fixing software, including San Francisco, San Diego, Seattle, Philadelphia, and Providence, RI. These laws aren’t complex and don’t require unwieldy market definition, you just have to show that…

Can you elaborate on what is meant by “rent-fixing”?

A bunch of landlords all use the same software to tell them how to price rents. The software continually pushes prices higher and higher. The software requires landlords to use their pricing as a condition of use. Now you have a price-fixing cartel for rent.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#16

Post by oopsieDayz »

petesergeant wrote: post #14
aorloff wrote: post #7

In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws. Then they got sued by the company that was targeted, and immediately waffled and canceled the ban. What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest…

Every rental unit in the city I live in is rent controlled — the government sets a maximum rental increase per unit per year. This is here in the People’s Republic of … checks notes … Dubai. It works great.

[flagged]

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#17

Post by lotsofpulp »

dataflow wrote: post #13
sophrosyne42 wrote: post #11

Earlier quoted context omitted.

They would. But second order effects ensure that this very act leads to the decline of housing prices. These effects being eliminated by rent control makes it the premier anti-tenant policy.

What second-order effects...? Feels like such an oddly opqaue way to talk about them. And how do you ignore the effect of the fact that rent no longer rises during the life of the tenant, making it lower after a while than it would otherwise be...? (How) is it so obvious that that is dwarfed by the second-order effects of uncontrolled rent that it doesn't even warrant a mention? Because it isn't to me.

Prices are a signal, and price changes are how market participants can determine which way supply and demand curves are moving.

By legislating prices and price changes, the signal is muddied, and market participants cannot take action to match the movements of the supply and demand curves.

Prop 13’s property tax rate increase cap is also price fixing. These kinds of laws are mostly ways to enrich and reward those who got or were born somewhere first, and run counter to the vaunted meritocracy that a so called free market can encourage.

Edit: The most helpful thing the government can do is maximize price transparency, so the smaller entity can be on equal footing with the bigger entity about which way prices are moving. Tenant agreements should be public record, like land sales are, and that would not only help cops with kicking out squatters, but also give renters more power in negotiations.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#18

Post by [deleted] »

oopsieDayz wrote: post #16
petesergeant wrote: post #14

Earlier quoted context omitted.

Every rental unit in the city I live in is rent controlled — the government sets a maximum rental increase per unit per year. This is here in the People’s Republic of … checks notes … Dubai. It works great.

[flagged]

[deleted]

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#19

Post by Aurornis »

Chinjut wrote: post #9
aorloff wrote: post #7

In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws. Then they got sued by the company that was targeted, and immediately waffled and canceled the ban. What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest…

Why would landlords not seek the highest possible rent without rent control?

Under rent control the highest possible rent is set by laws. If you fall behind on the allowed rent increase you’re usually not allowed to catch up to market rate later, such as when your tenant leaves and you put the unit back on the market. So to avoid getting stuck at below market rate with no legal way to catch up, you have to take the maximum allowable rent increase every year. In some situations it’s better to leave a unit empty and wait for someone be willing to rent at the rate than it is to lower rent, because the consequences of lowering rent will stick with the unit for years.

Without rent control, rents can be kept constant, moved up, or moved down without having to consider the consequences for years to come. The ceiling is set by the market rate, but there isn’t a function driving all of the landlords to raise by the annually permissible maximum so they try to discover it instead.

Rent control is instituted in cities that have constrained housing supplies, so the demand is there. Landlords switch to raising rents in unison by the maximum allowable amount every year because that’s the only way to operate.

Re: Algorithmic rent-pricing litigation expands under new state and local laws

#20

Post by Aurornis »

dataflow wrote: post #13
sophrosyne42 wrote: post #11

Earlier quoted context omitted.

They would. But second order effects ensure that this very act leads to the decline of housing prices. These effects being eliminated by rent control makes it the premier anti-tenant policy.

What second-order effects...? Feels like such an oddly opqaue way to talk about them. And how do you ignore the effect of the fact that rent no longer rises during the life of the tenant, making it lower after a while than it would otherwise be...? (How) is it so obvious that that is dwarfed by the second-order effects of uncontrolled rent that it doesn't even warrant a mention? Because it isn't to me.

> And how do you ignore the effect of the fact that rent no longer rises during the life of the tenant,

Rent control schemes don’t work like this, except in completely broken policies.

Landlords are given an allowance for rent control increases year over year. The point is that they basically have to take the maximum allowed every year to avoid getting stuck.

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