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DOJ sues realpage for algorithmic pricing scheme that harms renters

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

#171

Post by bluGill »

underseacables wrote: post #160

Reading this is depressing. The best decision I ever made was talking to a realtor, who connected me with a good lender, and buying a place. It wasn't easy but continuing to assume ownership was out of reach, and throwing money away on a rental, in hindsight would have been far worse.

For some people this is the right answer. However owning has a set of downsides that make it worse for some people. Most people get too dogmatic that their situation and choice is the right one even though there are many different situations, and some people are making the wrong choice. Right vs wrong choice can often only be seen in hindsight as well.

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

#172

Post by Carrok »

margalabargala wrote: post #163
Carrok wrote: post #45

Earlier quoted context omitted.

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.

You appear to be making an incorrect assumption that I said "zero new housing". I did not. I said near-zero. 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.

> In your comment you explicitly specified that the whole country should adopt the same price controls as SF.

I absolutely did not say this.

I said "Set the same price controls across the entire nation", which means one set of consistent price controls for the country, not the existing set of price controls that SF currently has.

Perhaps I should have worded it as "Set a consistent set of price controls across the entire nation".

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

#173

Post by pessimizer »

EVa5I7bHFq9mnYK wrote: post #138
Alupis wrote: post #105

Earlier quoted context omitted.

[flagged]

True, just as people from Mexico don't have a right to live in the rich and nice USA, people from the sticks don't have a right to live in the rich and nice SF.

People from Mexico don't have a right to live in the USA, any more than people from the USA have a right to live in Mexico; and the people moving into SF and complaining have top 3% incomes.

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

#174

Post by ZoomerCretin »

toomuchtodo wrote: post #28
Manuel_D wrote: post #25

Earlier quoted context omitted.

Do you want to invest tens of millions of dollars into building an apartment with zero expectations of making a return? If there's no profit to be made in building housing, why would anyone want to build housing? 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. If it's proven that landlords colluded to fix prices, that…

Profits are fine, excessive profits at the cost of people who need housing are not. There is no silver bullet, but increasing supply along with strong regulation to protect renters is welcome vs them being cattle to be squeezed by for profit entities. Human rights are a thing, there is no right to profit. > The six largest publicly traded apartment companies in the U.S. — all of which are linked to an alleged rental…

[flagged]

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

#175

Post by bluGill »

bhhaskin wrote: post #29

They need to go after the landlords as well. If they just go after RealPage there is nothing stopping landlords from doing it again with different software.

Only if the software exists. By going after RealPage they ensure nobody else is stupid enough to write software this way. They might use software, but that software either will not have as much information, or it will have different information that they will try to claim doesn't violate the rules. The first is legal, but makes the cartel much harder for form. The second is illegal, but it is harder to figure out how to get information and make it seem like you are not violating the rules.

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

#176

Post by andrew_eu »

bogwog wrote: post #152
jasode wrote: post #19

>Armed with competing landlords’ data, RealPage also encourages loyalty to the algorithm’s recommendations through, among other measures, “auto accept” functionality and pricing advisors who monitor landlords’ compliance. I think the "private prices" + "autoaccept" + "compliance" is the key misbehavior that gets RealPage into legal trouble. If competitors want to converge on prices in a legal manner , they have to do…

I think you're over analyzing and confusing things. Price fixing is when competitors work together to raise prices above what they would normally be in a competitive market. Using your gas station example, a gas station isn't going to look at a competitor selling gas at $4.15 and decide to raise their price to $4.45. They would lower their price to match the competition, otherwise they'd lose sales and make less mone…

The analogy also works in the opposite direction. If a gas station is selling at $4.10 a gallon and another down the street is selling at $4.15, the first gas station could happily up their price to $4.14. 1% more revenue and they're still the cheapest on the block.

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

#177

Post by mjcl »

legitster wrote: post #111
bbatsell wrote: post #59

Earlier quoted context omitted.

RealPage works by collating private competition data from all of their clients, running models to determine the highest possible vacancy rate for an area that will lead to the highest possible market rate, then telling their clients to set at that price and never offer discounts or reductions. In a fair market, landlords with vacancies would want to fill them — they have tons of fixed costs and they can't leave money…

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…

I worked for a public REIT that started using YieldStar when I worked there. Once they changed to YieldStar, all pricing came out of YieldStar. Rental quotes for prospects were only generated from YieldStar. Any deviation from the YS price had to be approved by the regional VP and they were not common.

They did this because RP was able to demonstrate that accepting a bit more vacancy in the very near term meant higher rents (thus higher renewals) which more than paid for the additional vacancy.

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

#178

Post by dylan604 »

tyingq wrote: post #6
currymj wrote: post #4

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…

Interesting as airlines have been doing this for a really long time.

not everyone is affected by airlines' pricing though as not everyone travels. everyone needs a place to live though

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

#179

Post by tacticalturtle »

Alupis wrote: post #105
kelnos wrote: post #72

Earlier quoted context omitted.

> 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…

[flagged]

It’s a problem when every town/municipality thinks like this, and then larger state- wide governments are faced with the dilemma of an angry voting population tired of high housing costs.

You can either get ahead of a state-wide solution and implement something where you have some control that works for your community, or you can do nothing and wait for the state government to begin to remove zoning from local control.

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

#180

Post by nickff »

IANAL, but I am not sure that RealPage is actually violating the first two sections of the Sherman Anti-Trust Act. It definitely seems RealPage may be assisting in organizing price-fixing, and the word 'contract' in section one may get them in trouble, but they do not seem to be doing it "in restraint of trade or commerce among the several States, or with foreign nations", as rent is local, and I'm not sure that their contract with clients actually forces the clients to accept 'recommended rents'.

https://www.law.cornell.edu/uscode/text/15/1 https://www.law.cornell.edu/uscode/text/15/2

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