161–170 of 646 posts
Some quotes from the filing: > Discussing a different RealPage product, another landlord said: “I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing . . . .” > In fact, as RealPage’s Vice President of Revenue Management Advisory Services described, “there is greater good in everybody succeeding versus essentially trying…
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> they only have 12,000 clients When you perform said Zillow or Craigslist search, do you settle for the higher end of the range of prices or the low end? Realpage only needs to manipulate a relatively small number of listings to have a huge impact in all rent prices.
The lower end! I usually undercut the market rate by ~$50. My house rents for $2400 a month. If I leave it on the market for just a month I would lose more money than I would gain in 2 years at a higher rent! So the incentive is to get it rented out as quickly as possible and get it booked before the other guy. So my incentive is to be just a bit lower than the other guy so mine goes first. I will not deny that the m…
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You appear to be making an incorrect assumption that there is some consistent amount of housing which will be built each year, and the question is only how to distribute it among different localities. That's not the case. If you add the same price controls everywhere, then the same near-zero housing gets built everywhere. Construction companies will shut down, they will not continue paying people to build housing at…
You appear to be making an incorrect assumption that price controls must be so onerous that they will result in zero new housing being built.
In your comment you explicitly specified that the whole country should adopt the same price controls as SF.
SF's price controls are sufficiently onerous that nearly no new housing is built there.
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I think you’re presuming elastic supply, where you can make up the lost profit from undercutting by selling more units. Real estate supply isn’t very elastic, and demand already outpaces supply. Your units will likely get rented, as long as you aren’t in the top 0.1% of prices. Therefore your incentive is to maximize profit per unit since you can’t move more units. Your incentive is to also join in on price fixing, b…
For the landlord units is elastic. If you have many units you can always not rent out a few, in fact you should always have a few units that you are remodeling and thus cannot rent out. In general as a large landlord should have around 10% of units not rented, if you have more than that rented you should raise your rates until people go elsewhere thus bringing you down to 10%, while if you have less than 10% lower yo…
Algorithmic pricing that learns to tacitly collude is a hot area of study in computer science and economics. For example, if you train simple online learning algorithms to adjust prices, sometimes they can learn to keep prices high or to take turns winning customers, rather than just competing. People have found some empirical evidence of this on platforms like Amazon where a lot of small sellers use pricing bots. Ho…
This gets into prisoner's dilemma though. If everyone but me is using the price fixing app, I have a strong incentive to undercut them, even by just a few dollars. So without a cartel-like enforcement mechanism, there is no reason it wouldn't just fall apart naturally in the long run. In the complaint there was a mention of "compliance" which could get into that piece though.
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This gets into prisoner's dilemma though. If everyone but me is using the price fixing app, I have a strong incentive to undercut them, even by just a few dollars. So without a cartel-like enforcement mechanism, there is no reason it wouldn't just fall apart naturally in the long run. In the complaint there was a mention of "compliance" which could get into that piece though.
>I have a strong incentive to undercut them Not in a supply constrained market where your rental will be occupied either way.
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...vs "providing" housing like developed nations in cramped shelters, in cars and on the street? FYI: multigenerational households are a cultural artifact, not an economic one. As one might assume, hovels without water or electricity don't break the bank, they aren't "provided" by anyone either. Yours is a false dichotomy, and is easily disproved by examples in other developed countries where shelter is considered a…
I grew up in tenements in Romania. So I can tell you from experience that building the bare minimum shelter for the most amount of people is possible (if less enticing than you may think). But the idea that they were anything other than "industrial" housing as OP states is ridiculous. Regardless of who pays for it, housing modern peoples is an industry.
I will also note that the currently in-vogue 5-over-1s lean heavily towards "Industrial housing". Funny how diffent economic systems both with a captive market converged towards no-frills housing.
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> While RealPage might command 80% of the market for this type of software, they only have 12,000 clients. There are over 5.2 million multi-family dwellings in the US. It's only a monopoly in that they offer a very niche product. So I doubt the implication the justice department is making here - that RealPage is having a significant impact on market price through widespread collusion. Well, given your only justificat…
Competition clearly isn't working for housing. Because it's not a competitive market. I am just skeptical to the extent it is due to pricing cartels.
I support looser zoning rules as reducing supply constraints is the only long term way out of high rents. However some places are better than others and there is a limit to how much looser zoning can reduce prices. (I wouldn't live in a tiny mud hut even if it was cheap and legal)
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Again, I have experience in this market so I have first hand experience. I understand the cartel allegations here, but I think people are vastly underselling the competitive forces at play. If you are not filling your unit immediately, you are losing thousands of dollars a month. Cartels break down because of the incentive to undercut (prisoner's dilemma). But in this case, it would be very, very profitable to underc…
> If you are not filling your unit immediately, you are losing thousands of dollars a month. This is false. If you have 100 units with monthly rents at: 100x$900 = $90000, 90x$1000 = $90000. 85x$1100= $93500. Of course we have no idea how many people will decide to not rent from you at different rates, but it should be obvious that the numbers can work out to it being better to not rent a few units if the price goes…
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> This line of thinking is what leads to situations like San Francisco, where price controls on housing lead to few developers willing to build there. Not sure what "price controls" you're talking about, but the reason it's expensive to build in SF (which reduces the appeal for builders) is zoning, the byzantine planning process, the ability of local residents to effectively block or delay projects, and weaponized en…
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It is in the interest of the entire country that these regions be forced to allow maximum housing development, because it will raise incomes across the entire country.
>Do the tax payers of SF not get a say in how their community is managed?
We know why zoning density restrictions exist, because their birth place was across the bay in Berkeley, whose proponents loudly extolled its benefits in pushing out anyone who was not White. This was the original intent of getting a say in development: to prevent undesirable racial minorities from moving in next door.
San Francisco weaponized housing density restrictions to push black people out of Haight-Ashbury, and to this day, continues to fight any and all housing development that might reverse this grave injustice.