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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

#231

Post by asadotzler »

Manuel_D wrote: post #93
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…

Policy restricting housing is indeed another factor impeding housing. The price controls I'm referring to are rent controls (which applies to ~70% of apartments in SF, and the threat of reintroducing rent controls looms) and affordable housing mandates. The affordable housing mandates require that a certain percentage of units are rented at set prices. Again, if housing isn't an investment opportunity, then why would…

Lots of businesses make less than stock market index returns. You can be a builder that doesn't want to beat the S&P and still support your family doing it. Not everything has to be about massive accumulation of wealth or "growth at all costs". Plenty of people are OK doing a day's work for a day's creature comforts and leaving it at that.

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

#232

Post by Manuel_D »

asadotzler wrote: post #231
Manuel_D wrote: post #93

Earlier quoted context omitted.

Policy restricting housing is indeed another factor impeding housing. The price controls I'm referring to are rent controls (which applies to ~70% of apartments in SF, and the threat of reintroducing rent controls looms) and affordable housing mandates. The affordable housing mandates require that a certain percentage of units are rented at set prices. Again, if housing isn't an investment opportunity, then why would…

Lots of businesses make less than stock market index returns. You can be a builder that doesn't want to beat the S&P and still support your family doing it. Not everything has to be about massive accumulation of wealth or "growth at all costs". Plenty of people are OK doing a day's work for a day's creature comforts and leaving it at that.

Sure you can deliberately invest in a way that doesn't generate the best returns. You can be a philanthropist and build housing for free! But the vast majority of people are indeed looking to maximize returns.

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

#233

Post by Manuel_D »

orwin wrote: post #215
Manuel_D wrote: post #130

Earlier quoted context omitted.

"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.

So it's exactly the same thing as SF rent control, albeit with a higher allowable year-over-year increase. There's nothing "dynamic" about it, it's just textbook rent control.

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

#234

Post by ceejayoz »

legitster wrote: post #30

I am a small-time landlord. There's no "marginal cost" to determine how much to charge for rent. The only thing I use to determine the price is the current market rate. And all I have to do is open up Zillow or Craigslist and do a search on similar properties with similar characteristics. It only takes ~5 minutes of research to get a competitive market rate. While RealPage might command 80% of the market for this typ…

> 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.

This is pretty misleading.

"Greystar was the largest apartment manager in the United States, with over 726,826 units/beds..." - https://en.wikipedia.org/wiki/Greystar

That's one client. (And yes, they are a client. https://www.realpage.com/case-studies/greystar-optimizes-sub...)

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

#235

Post by amy-petrik-214 »

kelnos wrote: post #72
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…

> 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…

price controls is rent control. SF. see also: NYC "you can raise rent by X% per year AT MOST, no more than that" if inflation / supply/demand is >X%, the landlord eats it. Thus landlording might be for some, more appealing elsewhere.

Cali also has prop 13 i.e. rent control on real estate taxes. So if I bought my house in 1955, I might pay $100/year in property tax, the guy who just bought a completely identical house next door this year might pay $15,000 a year in property tax. On basically the same house. How is that fair? kinda a boomer "I got mine" type mentality. Also part of the bay area real estate problem, in addition to zoning/byzantine planning, borken process - why would anyone want to move out?!? Moving out would mean +$15,000/year tax, every year. Just stay put.

Of note in Singapore there's not really the concept of "apartment building" business and it works fine (very dense NYC tier housing there). The reason why is the more "units" you own, taxes become progressively more brutal, an apartment building would be tax armageddon. So most rentals are a person who owns a few condo type units and rents them, few enough that taxes aren't bad. Most people aim for owning, and for owning there is a private sector but a public government sector that provides home at more reasonable prices with various perks and incentives. That's how to handle housing when you've got tons and tons of people and almost no land.

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

#236

Post by p_j_w »

SmartJerry wrote: post #225
consteval wrote: post #156

Earlier quoted context omitted.

I think being a landlord is pretty much the easiest business ever. As compared to real businesses, who really produce products and really participate in competitive markets.

How long have you been a landlord? If it's so easy, everyone would do it.

People don’t refrain from being landlords because it’s hard. I’ve seen people being landlords up close, it’s not. No, people refrain from being landlords because it’s so incredibly expensive to get started. Especially at a time where people are struggling to pay their own damned rent or mortgage, the cost of a second property is completely out of the question.

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

#238

Post by washadjeffmad »

Manuel_D wrote: post #25
Carrok wrote: post #23

Earlier quoted context omitted.

> industry The fact that providing people with housing is even seen as an "industry" is a big sign of what is wrong with the world right now. It is essential to living a decent life. It should not be a driver of lining the pockets of people who are already rich.

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…

You're missing that they didn't use this to build or expand housing, but to limit it. Just look at the occupancy rates.

They colluded with property management companies to capture 80% of existing multi-family dwellings and raised rents to inflate hard asset values of PE owned properties nationwide. Just because this is the closest that homeowners have had to a bailout in their lifetimes doesn't mean they didn't profit even more.

It was a scam.

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

#239

Post by washadjeffmad »

Manuel_D wrote: post #68
raincom wrote: post #54

Earlier quoted context omitted.

Realpage is involved in a vicious loop, not a virtuous loop. Even in the Bay Area, corporate landlords jack up rent like 10% every year, whereas small landlords are happy to raise rent by 3%. That's the difference due to algorithmic collusion set and controlled by RealPage.

How are the corporate landlords able to rent their units if the small landlords are selling equal quality units for substantially less? Wouldn't everyone just rent from the small landlords while the corporate apartments stay vacant? This is the hole in the price-fixing argument: price-fixing only works when everyone is onboard, otherwise the parties not involved in price fixing will gobble up the market share. I woul…

Small landlords who didn't use RealPage didn't struggle with occupancy. Large ones "fired" renters and warehoused apartments, meeting debt obligations at occupancy rates even below 80%.

And most amenities are bullshit. They've taken ordinary, expected services and privatized them, externalizing the costs to residents for kickbacks, and made elective services like cable and internet mandatory through exclusive provider agreements to inflate revenue.

In aggregate, squeezing older properties subsidizes newer properties by equalizing returns. They're making just as much or more off of cheaper properties as newer "premium" ones.

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

#240

Post by medvezhenok »

Manuel_D wrote: post #94
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…

Okay, so I was right: "protect renters" was indeed referring to price controls. Price controls coupled with what sounds like blatantly nativist policy: > Dynamic price control of rents to prevent them from accelerating beyond what wages can support (existing tenants win vs potential new market entrants... Can you elaborate on what you mean by "existing tenants win vs potential new market entrants"? Does this mean tha…

I think GP is pretty clearly implying more akin to Prop 13 but for renters (i.e. Prop 13 locks in increase in property taxes to 2% a year), this policy would do something similar for rent.

It benefits existing renters because new entrants (new renters) would have to pay market price, but existing renters might be behind market rent if market rents are increasing too quickly. Same way that Prop 13 works.

Dynamic in the sense that it's not fixed at 2% but tied to some sort of variable index (San Diego for example does CPI + 5% with a hard cap of 10% YoY increase I believe)

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