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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

#211

Post by kpw94 »

everforward wrote: post #113
jasode wrote: post #78

Earlier quoted context omitted.

>So it could be argued it's not "private prices" I added "private prices" as one of the factors because the official DOJ wording in the complaint mentions "nonpublic/confidential/sensitive" prices in 3 different places: > The complaint alleges that RealPage contracts with competing landlords who agree to share with RealPage nonpublic, competitively sensitive information about their apartment rental rates >“We allege…

I don’t think they’re talking about the price they’re renting the apartment for; I can’t imagine that number is secret in any meaningful sense of the word. Who rents an apartment without knowing the price? I think they’re talking about more sensitive internal numbers. What are the costs and margins on the unit? How quickly are units moving at a certain price? What’s the turnover at particular prices? I think the core…

> I think they’re talking about more sensitive internal numbers. What are the costs and margins on the unit? How quickly are units moving at a certain price? What’s the turnover at particular prices?

Yeah that's my understanding of it too "competing landlords who agree to share with RealPage nonpublic, competitively sensitive information about their apartment rental rates and other lease terms".

I.e. realPage has an oracle view of all the lease ending times etc, so it knows for instance, this next July there's going to be very few availability, so boost all the rents by X%

I guess there's a "private price" if the apartment complex share what, after all negotiations, the renter ended up signing for. It can be more than what was on the public website, if they ended up signing for a shorter lease, or less if the apartment ended up needing to throw in "first month free" etc.

There's also private price of lease renewals done before the unit is put for rent on the website.

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

#212

Post by orwin »

RhodesianHunter wrote: post #104
toomuchtodo wrote: post #75

Earlier quoted context omitted.

Dynamic price control of rents to prevent them from accelerating beyond what wages can support (existing tenants win vs potential new market entrants, them the breaks when supply is catching up to demand or cannot meet demand), tenant rights with strong local regulatory oversight, government incentives to encourage a diverse ecosystem of suppliers bringing new supply onto the market based on forecasted market demand…

>Dynamic price control of rents How many economics studies, from all schools of economic thought, across 100 years of research need to prove that price controls don't work before people start accepting that fact?

I mean dynamic price control works in most French cities. The exception is Paris, but they tried a static price control for no reason (also, non-market housing supply is diminishing, which is a bad thing. Capitals with 30 to 40% non-market housing are doing extremely well usually)

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

#213

Post by bogwog »

jasode wrote: post #191
bogwog wrote: post #152

Earlier quoted context omitted.

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…

>, 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 money. But the airlines are also doing the opposite of your scenario: they also raise prices instead of lower them via legal "price signaling" via publicized fares[1] in the global reservations system. Compe…

> Competitors can converge on a higher price instead of a lower price. It's not just one direction. They just need to do it via public price signaling to stay out of legal trouble.

I don't understand what you're saying. Are you saying that companies are colluding, but not really because the prices are public? Most prices are public, just walk into any supermarket or open Amazon.com and you'll see public prices. If a company bases their price on a competitor's price, that's not collusion, that's just a pricing strategy. If a company is able to price a product above their competitors and still succeed (e.g. by investing more in marketing), that's legal too.

> In 2022, Apple Music raised their subscription from $9.99 to $10.99. Spotify then followed them and also raised their price to $10.99. By 2023, they both converged on $10.99. I think right now in 2024, Spotify is $1 higher at $11.99. Nobody should be surprised if Apple Music also raises its to $11.99.

Streaming is not an example of a healthy market IMO. I don't know the economics of it all, but I know all the streaming services need to pay the same record labels. Whatever is going on there, it's weird that they all cost the same. I currently pay $10.99/month for Tidal, which is the same exact price as most other services. I wouldn't be surprised if there was collusion going on there, maybe even something like RealPage behind the scenes. There's also the factor of Apple and Google's monopolies over apps, and I wonder if undercutting Apple/Youtube is bad for business.

> But the airlines are also doing the opposite of your scenario: they also raise prices instead of lower them via legal "price signaling" via publicized fares[1] in the global reservations system.

The link you posted seems to be a google search page? Not sure what you meant by that.

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

#214

Post by ZoomerCretin »

ZoomerCretin wrote: post #170
Alupis wrote: post #105

Earlier quoted context omitted.

[flagged]

Zoning restrictions in just three cities (San Francisco, San Jose, and New York) are responsible for all of the United States' GDP being lower by double-digit percentage. 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…

Found it: https://eml.berkeley.edu/~moretti/growth.pdf

If New York and the Bay Area alone relaxed their zoning, their GDP would be 33% higher, and US GDP would be 3.7% higher (as of 2009), and national average income would be $3,685 higher.

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

#215

Post by orwin »

Manuel_D wrote: post #130
bdcravens wrote: post #120

Earlier quoted context omitted.

You can be prosecuted for price gouging of essential goods.

"price gouging" is not the same as price-fixing. Price gouging refers to raising prices in response to natural disasters: https://www.cato.org/blog/anti-price-gouging-laws-entrench-s... > Texas’s APGL kicks in when a disaster is declared by the governor or the country’s president. Under the law, merchants are not allowed to sell or lease fuel, food, medicine, lodging, building materials, construction tools, or other…

It's called 'dynamic price control' and is present in most cities in my country. My landlord cannot rise the rent at weird levels, which is based on the selling cost of the unit. Basically if her unit appreciate 5% yoy, she won't be able to rise the rent higher than 5% yoy.

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

#216

Post by __MatrixMan__ »

They should take a page out of the FBI's book: leave the software up as a honeypot, sue the users into oblivion, and use the proceeds to fund further antitrust operations.

Otherwise we're just going to end up with the same software back from the grave, but with no company behind it to sue this time.

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

#217

Post by consteval »

bluGill wrote: post #205
consteval wrote: post #200

Earlier quoted context omitted.

Easy, you outsource your tenant management to a company that does that sort of thing. There's many highly reliable methods to get good tenants. Outsourcing to a company that specializes in that works because you're already making free money by being a landlord, so now you just make less free money.

None of them are taking on the risk of what the tenant isn't paying or you don't have one. Landlord also isn't free money. You have a lot of bills to pay.

You have negative bills to pay, because you get money purely by virtue of having those bills.

Landlord is not a job, it's a state of ownership. Owning a company is not a job either. Being a CEO is! And you can be both. But simply owning something is not a job.

You can say property management is hard, and maybe it is. That's a separate thing and the VAST majority of landlords actually don't manage their property. So being a landlord is very, very easy.

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

#218

Post by SmartJerry »

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…

Excessive profits are actually the catalyst for competition. THe cycle of capitalism and free markets looks like this: earn excess profits -> people build more supply -> prices come down and excess profits dry up -> people stop building -> earn excess profits. When you fix the 'prices come down and excess profits dry up' all you get is people stop building.

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

#219

Post by orwin »

Alupis wrote: post #115
RhodesianHunter wrote: post #106

Earlier quoted context omitted.

I'm not trying to be snarky, I'm genuinely curious. Have you ever read the economics literature on price controls?

They have not... and unfortunately this viewpoint is shared by too many these days. Removing the profit-motive from the equation does not magically net increased benefits for everyone. It's usually the opposite in reality... landlords end up doing the absolute bare minimum because sinking a bunch of money into renovating the bathrooms or kitchen will not yield increased rent under these proposed policies. Or people l…

I mean, did you read Diamond, McQuade, and Qian? Or newer studies? It should be the minimum to read before talking about rent control effect (with Autor, Palmer, and Pathak) because people tend to cite 'Friedman', who _never_ empirically worked on this subject. I mean, I understand liberals/Libertarians seems to love pure reason, but I hope people on this website are more scientifically minded. Experience is always better than models, no?

[edit] anyway, rent-control on market housing do not work, but limited non-market housing do apply downward market pressure, even when done poorly and unplanned (as shown by AP&P study)

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

#220

Post by gen220 »

RhodesianHunter wrote: post #118
bick_nyers wrote: post #18

Earlier quoted context omitted.

Housing is pretty inelastic. I think people are just willing to suffer financially to avoid the fate of homelessness. Just because there aren't vacancies anywhere doesn't mean that the price is fully justified, because housing will take priority over groceries for a lot of people.

Housing supply is inelastic due to the time it takes to permit and built. Housing demand is more elastic than you suspect. People have income on a curve, and at a certain point of price/quality will move further out and commute or move to a lower cost of living city entirely.

Meanwhile, I know many people in NYC who spend ~60% of their post-tax income on rented housing.

Nobody is happy about it or thinks it's a good idea, but living further out is not perceived as a legitimate option because of the fear of being severed either socially or career-wise.

Whether that's a rational fear or not, it's a reality that allows housing prices to outpace wage gains every year. As somebody who used to think housing demand is fairly elastic: housing demand is much less elastic than you'd suspect.

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