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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

#351

Post by enriquec »

mcmcmc wrote: post #328
kstrauser wrote: post #266

Earlier quoted context omitted.

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.

to anyone even remotely studied in economics - this is astoundingly ignorant. And the hubris is incredibly cringey. Please provide a counter example to the soft science law of supply and demand?

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

#352

Post by aidenn0 »

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…

It's death by a thousand cuts. If it takes an architect working 10+ hours a week for 2-3 years get permits, that sets a fairly high floor on the cost for new development.

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

#353

Post by [deleted] »

lukev wrote: post #16

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…

[deleted]

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

#354

Post by crazygringo »

gruez wrote: post #332
jihadjihad wrote: post #259

"Over a century ago, Congress passed the Sherman Antitrust Act to protect competition in the marketplace. As the Supreme Court has explained, the “central evil” addressed by Section 1 of that Act is “the elimination of competition that would otherwise exist,” including competition on prices. When the Sherman Act was passed, an anticompetitive scheme might have looked like robber barons shaking hands at a secret meeti…

>Today, it looks like landlords using mathematical algorithms to align their rents." It's unclear how that can ever be outlawed though. Given the classic supply/demand curve, everyone can theoretically independently derive the optimal price. Doing so would arguably be basic business acumen, and I'm not sure how the government can ban that without banning any sort of pricing research, or preventing businesses from set…

> Realpage goes beyond this by pressuring landlords to accept their recommended price, and that's probably what got them in hot water, but they could probably have gotten away with it if they didn't do that.

Yes, but it seems like that would miss the point of Realpage entirely. Which is that if all landlords pay for it and are pressured to follow its recommendations they all make a lot more money.

Using algorithms to set your prices is fine. Using a shared algorithm to align your process is not. That's quite easy to outlaw. The "pressuring" part here is extremely clear.

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

#355

Post by gs17 »

BeetleB wrote: post #342
colechristensen wrote: post #272

Earlier quoted context omitted.

Uh, you're reading the wrong thing about it. Fixing supply and demand means things like punishing vacancies with taxation, promoting construction with tax breaks, and removing the demand by severely limiting rent seeking real estate investors.

I follow the RE space, and have done some RE investments (albeit mild ones - I don't own homes to rent or anything like that). > punishing vacancies with taxation Outside of tourist spots, this will hurt more than it will help. Most RE investors lose money on vacancies (it's literally a line item in their expenses) and work hard not to have them. They definitely do not make more money by artificially limiting supply…

> because these people often buy distressed homes that banks won't give a loan on - and they renovate them, bring them up to code

There could easily be exemptions to a vacancy tax to allow for, or even encourage, renovating a home.

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

#356

Post by pc86 »

Loughla wrote: post #288
candiddevmike wrote: post #267

Earlier quoted context omitted.

Would be interesting to see what would happen if renters had the option to buy the underlying property/unit somehow after being a tenant for a certain time. The goal should be ownership for folks who want it, not a nation of renters.

You can rent your home with x% profit, but after x # of years the home sells to the renter. I like it but that seems like a system VERY susceptible to abuse.

Forcing people to sell private property against their will is generally a pretty bad economic policy.

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

#357

Post by lupusreal »

tantalor wrote: post #278
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-...

You can't just ban them. Where there is profit to be made, they will find a way around any regulation. You have to change the structure of the market so they no longer see these investments as profitable. One way local areas do this is by "homestead tax exemption" which reduces property taxes if you live in your own home, but this is binary and punishes small landlords equally as big ones.

Lots of profitable activities are banned and the bans are generally quite effective. For instance, selling cigarettes and liquor to children.

Now you might say those bans aren't 100% effective, but why do they need to be 100% to be justifiable?

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

#358

Post by mullingitover »

__loam wrote: post #337
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?

We should build large numbers of commie blocks until PE firms regret buying residential properties.

Better yet, we can just copy Singapore or Vienna's public housing systems and actually have desirable public housing.

Arguably, the reason we don't already have this is because a large contingent of the voting public has been conditioned to believe that if the government does something well, it's communism, so the government should do anything well.

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

#359

Post by gs17 »

mcmcmc wrote: post #318
Loughla wrote: post #288

Earlier quoted context omitted.

You can rent your home with x% profit, but after x # of years the home sells to the renter. I like it but that seems like a system VERY susceptible to abuse.

You can bet landlords would be doing everything possible to force renters out just before the purchase window comes open.

That's definitely an issue, even if constructive evictions can be prevented, landlords would also have to be forced to renew leases (at limited rent increases).

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

#360

Post by pc86 »

chasebank wrote: post #316
SoftTalker wrote: post #295

Earlier quoted context omitted.

Those taxes just get added to the rent charged.

Indeed they would, however, the underlying asset value would drop to allow for market rents. That's the point.

In a free market, yes. But not when the demand is so artificially constrained. Rents go up and people are forced to either pay a higher percentage of their income to rent, or move farther away.

Housing is not a free market by any stretch of the imagination, so if you just move one lever you don't always get the response you would in a true free market.

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