Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

DOJ sues realpage for algorithmic pricing scheme that harms renters

justice.gov

Post reply on HN
Print view View original

321–330 of 646 posts

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

#321

Post by bilbo0s »

SoftTalker wrote: post #286
oconnore wrote: post #258

I am excited and optimistic that we appear to be applying economic principles to housing! Now that we're getting rid of centralized price controls / collusion, next can we do supply/demand?

I live in a town where all the officials express politically popular laments about the affordability of housing, but every time a developer wants to build apartments or tear down some old run-down post-war cookie-cutter houses for modern duplexs or tri-levels these same officials run them through a gauntlet of demands and then often as not end up denying the permits. They say they want dense, walkable, core neighborh…

That's not most municipalities though.

There are a lot of places, particularly the high demand places, where the cost of acquiring the houses in the first place is the hang up. Everyone is certain they can get half a mil minimum. That drives costs considerably when you need 1/2 a block, or a full block for high density development. It's not easy. You could even have to end up giving the current land owners some preferential share of the finished development. Which, of course, means there's less profit for other potential partners at the end.

People ask, why are apartments so expensive? In high demand areas, that's a big part of the reason. Land acquisition costs were so high that it precludes building anything that can offer that Usually the municipality or the state has to step in with some kind of break in order to make the numbers work out. And that's when we get to the step you're talking about where the state or the municipality demands this or that or the other. But the politicians have to demand something for the break, or it's seen as just having handed over taxpayer money to their buddies in construction. ie - corruption.

So from beginning to end, it's a tough problem.

EDIT:

It seems before I even finished typing my message, sibling messages appeared illustrating the point I was making in the last paragraph. There is no way in today's environment of completely broken down professionalism and trust, that a politician can give a concession without getting something for his/her community that s/he can use as justification for the concession. Otherwise, people, rightly or wrongly, just see it as handing free money to a politician's friends.

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

#322

Post by hughesjj »

adamsb6 wrote: post #289
nightpool wrote: post #271

Earlier quoted context omitted.

That's not what RealPage did. RealPage (in landlord's terms) "uses proprietary data from other subscribers to suggest rents and term"—not just publicly available data. Additionally, there's a market impact level to this. When you control 70% of the market, you're a monopoly, regardless of whether you're controlling market prices because you're a landlord or because you're just telling the landlord what price to use.…

In other contexts there’s no problem with using proprietary data to set prices, so long as you don’t run afoul of insider trading regulations. Landlords also don’t have monopoly pricing power, they’re making tradeoffs. They can’t list their unit for a million per month or else it would never sell. They can’t list it for a dollar because they would lose money and be flooded with applicants. They’re trading between the…

> In other contexts there’s no problem with using proprietary data to set prices, so long as you don’t run afoul of insider trading regulations.

I believe the parent comment mentioned proprietary data for accuracy, since you had only mentioned publicly available data. Parent comment then goes on to describe various ways Realpage does violate monopoly power.

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

#323

Post by HeatrayEnjoyer »

hn72774 wrote: post #307
pstuart wrote: post #264

Earlier quoted context omitted.

On the demand side it would be nice to keep PE firms from hoovering up all the single family homes. https://www.thesling.org/are-hedge-funds-and-private-equity-...

While we are at it, make it easier for mom-and-pop landlords to rent out their homes so that they can compete with the resources of PE firms. Too many renter protections where I live and the consensus is don't ever try to be a landlord here. One bad tenant/squatter can bankrupt you.

Let's find a solution that doesn't poke even more holes in what little social safety net the US has.

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

#324

Post by alistairSH »

codedokode wrote: post #310
rcpt wrote: post #291

Earlier quoted context omitted.

You do that by building enough houses to make housing unattractive to investment firms

There is never enough houses, or they are located in the middle of nowhere thousand of kilometers from nearest subway station or supermarket.

You're assuming everybody wants/needs a single family with a yard.

SFHs should be expensive and considered a luxury. At least in a desirable urban/suburban location.

We could/should/must provide more housing in those desirable areas, but it likely should be a mix of high-rise, mid-rise, small apartment units (which could be owner-occupied or rentals), duplexes and triplexes, and row-homes/townhomes.

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

#325

Post by no_wizard »

pstuart wrote: post #264
oconnore wrote: post #258

I am excited and optimistic that we appear to be applying economic principles to housing! Now that we're getting rid of centralized price controls / collusion, next can we do supply/demand?

On the demand side it would be nice to keep PE firms from hoovering up all the single family homes. https://www.thesling.org/are-hedge-funds-and-private-equity-...

Land Value Tax[0] is the way. It strongly incentivizes the following:

>The owner of a vacant lot in a thriving city must still pay a tax and would rationally perceive the property as a financial liability, encouraging them to put the land to use in order to cover the tax. LVT removes financial incentives to hold unused land solely for price appreciation, making more land available for productive uses. Land value tax creates an incentive to convert these sites to more intensive private uses or into public purposes.

The entire purpose of a land value tax is to encourage the productive use of land, which boils down to either building stuff on it to make it more productive or selling it to someone else so they can largely do the same.

Otherwise it is a simple tax burden to hold. While extremely wealthy individuals may choose to do this, its unlikely that businesses (like PE firms) are going to let their tax obligations stack over time and hold empty land / buildings etc. Same goes for individuals who are taxed at wildly different rates (like in California with Prop 13) simply based on time of sale

[0]: https://en.wikipedia.org/wiki/Land_value_tax

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

#326

Post by mint2 »

adamsb6 wrote: post #262

Curious where the line is supposed to be for gathering market information and making pricing decisions. Surely it would be legal if I had an employee scour all the rental listings in my area and use that to give me price distributions for similar units to the ones I’m advertising. But according to the DOJ if I hire a company to do this, it’s not? What if I have two units to list and it wouldn’t make sense for me to h…

after at least a year of regular posts on real page, where all the articles I’ve seen here specifically cite how real page enforces their pricing, why are there always posts that lead off with an entirely incorrect understanding of what real page does?

Anytime a real page article is posted, a bunch of people come out expressing confusion and defend real page, asking why it’s illegal to look up competitor pricing…

Then they express surprise when told that real page does more than that - that it actually sets the prices and makes the price onerous to change and applies penalties if landlords still does change the price.

But this info is always stated in the articles, so what how or where are the posters getting their initial incorrect info on real page? It seems they must be getting bad info somewhere because it doesn’t seem plausible to guess at how real page works without even reading anything.

And all of the incorrect understandings are always generous to real page.. is real page putting out a lot of fud somewhere that’s getting to people who then come here after being misled?

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

#327

Post by chongli »

oconnore wrote: post #258

I am excited and optimistic that we appear to be applying economic principles to housing! Now that we're getting rid of centralized price controls / collusion, next can we do supply/demand?

Yes, one way we could fix supply/demand is by scaling up the density of detached and semi-detached neighbourhoods. This means mandating narrow one-way streets (6m wide) and banning wide two-way streets (15m wide), forcing smaller front yards (reducing setback distances), eliminating garages and driveways in favour of street parking, allowing narrower properties and smaller homes overall. Furthermore, we should be allowing mixed use zoning so that small shops, restaurants, cafes, and bars can serve these neighbourhoods and promote a walkable lifestyle.

These neighbourhoods can be served by light rail / street cars allowing more distant travel via rapid public transit, further reducing the need for cars. Look at a lot of the older neighbourhoods in big cities such as Riverdale in Toronto [1] to see what streetcar suburbs look like.

[1] https://www.youtube.com/watch?v=MWsGBRdK2N0

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

#328

Post by mcmcmc »

kstrauser wrote: post #266
oconnore wrote: post #258

I am excited and optimistic that we appear to be applying economic principles to housing! Now that we're getting rid of centralized price controls / collusion, next can we do supply/demand?

Getting rid of the law of supply and demand is like getting rid of Boyle’s law. Legislate whatever you want but the behavior those laws model will still exist. I prefer to think of it this way. I like my markets free as in GPL, not free as in BSD. That is, I want the market itself to be free with limitations on the participants that keep them from taking it for themselves.

This is moronic. Economic theory is a self-reinforcing veneer of soft science studying observed human behavior with wild variance between different cultures, geographic markets, and individual people.

The "laws of supply and demand" are not empirical laws of physics. They are general principles with well-known exceptions and flaws of their own. You should lay off the microdosing.

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

#329

Post by vipshek »

FireBeyond wrote: post #306
SoftTalker wrote: post #286

Earlier quoted context omitted.

I live in a town where all the officials express politically popular laments about the affordability of housing, but every time a developer wants to build apartments or tear down some old run-down post-war cookie-cutter houses for modern duplexs or tri-levels these same officials run them through a gauntlet of demands and then often as not end up denying the permits. They say they want dense, walkable, core neighborh…

> I live in a town where all the officials express politically popular laments about the affordability of housing, but every time a developer wants to build apartments or tear down some old run-down post-war cookie-cutter houses for modern duplexs or tri-levels these same officials run them through a gauntlet of demands and then often as not end up denying the permits. Hah, in my town, the developers and officials ar…

Which state is your town located in, out of curiosity? I'm trying to build a mental rolodex of which states have towns that are development-friendly.

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

#330

Post by alistairSH »

HDThoreaun wrote: post #319
duped wrote: post #282

Housing prices are publicly available information, rents should be too.

> Housing prices are publicly available information Dont look at utah

None of these states mandate disclosure of real estate transaction details...

Alaska, Idaho, Kansas, Louisiana, Mississippi, Montana, New Mexico, North Dakota, South Dakota, Texas, Utah, and Wyoming.

Post reply on HN