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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

#371

Post by colechristensen »

JumpCrisscross wrote: post #368
BeetleB wrote: post #342

Earlier quoted context omitted.

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…

> Most RE investors lose money on vacancies (it's literally a line item in their expenses) and work hard not to have them Plenty of landlords would rather a unit in a building go empty for longer than compromise on rent in a way that weakens their negotiating position with the other units. (Also, with lenders.) The argument for taxing vacancies is city taxes are often set on the assumption of occupancy. A vacant unit…

>Also, the argument for taxing vacancies is city taxes are often set on the assumption of occupancy. A vacant unit doesn't contain a tax-paying worker. The vacancy tax adjusts for that.

Also important for commercial vacancies. The rent is too high, costs for commercial goods and services (and especially food and entertainment) is inflated by inflated rent so restaurants and consumer businesses can't stay open because they can't afford to pay the rent and lower prices to attract customers at the same time. And yet a huge proportion of the commercial space is just empty.

A vacancy tax makes up for that missing tax revenue from a running business and also just raises the quality of life for the people of your city by giving them opportunities for things to do and lowering the bar for entry into running a business.

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

#372

Post by samstave »

SpicyLemonZest wrote: post #367
samstave wrote: post #362

Earlier quoted context omitted.

>> Now that we're getting rid of centralized price controls / collusion > give me a dossier on BlackRock's holdings in real estate, go into detail on their holdings in residential, get as much real financial from their filings and reports. Give me a markdown table and an instaml/instaql schema for the data model * Blackrock would like a word https://i.imgur.com/PLwQ6sa.png https://i.imgur.com/1oAdbdC.png https://i.im…

You and what I assume is your AI companion are victims of some viral misinformation about BlackRock. BREIT and BREIT II are managed by an unrelated company named Black stone - the fund names in your third image are incorrect. BRGIF does not, as far as I can tell, exist at all.

Do you know the history behind both BlackRock and BlackStone?

Same DNA:

>>he business that would become BlackRock started under the umbrella of Schwarzman’s firm in 1988. “They used to be called Blackstone Financial,” Schwarzman said. “We started in business together. We put up the initial capital.” Schwarzman started Blackstone three years earlier in 1985.

>>When Fink decided to branch out on his own, he needed a new name for his asset management operation, Schwarzman said. “Larry and I were sitting down and he said, ‘What do you think sort of about having a family name with “black” in it.’”

Thanks for the input though - I am working on figuring out how to document all these entanglements - there are a lot of others also attempting to do so, if you have any links to such, I appreciate real data that I can trust (I am mapping out The Oligarchs, their entanglements, and what/who they are/actually own.)

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

#373

Post by mullingitover »

pc86 wrote: post #361
mullingitover wrote: post #358

Earlier quoted context omitted.

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.

It's less a belief that the government shouldn't do anything well, and more a belief that it can't.

Right, and I'd argue that the belief that it can't do things well frequently comes from the government being deliberately handicapped by those who believe it should't do things well. For example crippling (or outright trying to destroy) the US Postal Service out of the belief (or vested interest) that private delivery companies shouldn't have to compete against a publicly subsidized service.

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

#374

Post by colechristensen »

pc86 wrote: post #365
BeetleB wrote: post #342

Earlier quoted context omitted.

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…

Taxes on vacant rental units means they'll be sold sooner, and increases the odds they'll be sold to an occupant instead of a speculator. I am a capitalist above basically anything else but that sounds great to me (and I already own a home and will likely never move again). > Almost everyone I know who purchases houses/apartments to rent them would get out of the business if vacancies were taxed Yes, you've successfu…

>> Almost everyone I know who purchases houses/apartments to rent them would get out of the business if vacancies were taxed

>Yes, you've successfully articulated the point.

And the goal. Why raise taxes on vacancies? To push out owners whose primary goal is to leach out a few percentage points above loans they can get or to sit on property while it appreciates in value (while harvesting tax benefits on the depreciation of the structures they maintain to a minimum because _margins_)

There just shouldn't be a class of people whose business is harvesting tax benefits and arbitrage of trust by banks.

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

#375

Post by gruez »

advael wrote: post #340
gruez wrote: post #332

Earlier quoted context omitted.

>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…

There's a huge difference between researching your competition and coordinating with them. In effect, Realpage is acting as a mechanism for landlords to coordinate prices collaboratively rather than competitively. It just hopes to get away with it by having them outsource the analysis part of this to a third party. It likely would have gotten caught sooner if it weren't for the nonsensical attitude regulators have ta…

>There's a huge difference between researching your competition and coordinating with them

If you read my comment carefully, you'd see that I was specifically talking about "independently derive the optimal price", not any sort of coordination.

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

#376

Post by gruez »

JumpCrisscross wrote: post #345
gruez wrote: post #332

Earlier quoted context omitted.

>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…

> unclear how that can ever be outlawed though There are certain categories of information that you are legally prohibited from sharing with your competitors. How you will set prices in the future is one of them [1]. Whether competitors agree on a specific price or a system of pricing ( e.g. X per square foot, or raise rent 1% every year except prime numbers when rent goes up 10%, or raise rent by the last number of…

>There are certain categories of information that you are legally prohibited from sharing with your competitors. How you will set prices in the future is one of them [1].

Right, but if you read my comment more carefully, I was specifically talking about the case where everyone derives the optimal price independently. Nowhere is sharing the price with your competitor mentioned.

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

#377

Post by adamsb6 »

nightpool wrote: post #271
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…

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.…

Reading through the details on the lawsuit now: https://www.documentcloud.org/documents/25060739-us_et_al_v_...

It is alleged that they use proprietary data, and it looks like they definitely do.

RealPage doesn't appear to police landlord's price setting decisions. I see how you could get this from the first paragraph here, but the paragraph immediately after dispels it:

> 28. In addition to agreeing to share nonpublic, competitively sensitive data with RealPage, each AIRM and YieldStar licensee agrees with RealPage to use the AIRM or YieldStar pricing software as RealPage designed it. Landlords are expected to review daily AIRM or YieldStar floor plan price recommendations and use the programs to set scheduled floor plan rents or even unit-level prices > 29. While landlords may not accept every price recommendation, they use AIRM or YieldStar as their pricing software, regularly review AIRM or YieldStar floor plan recommendations, use AIRM or YieldStar to set a scheduled floor plan rent, and use AIRM or YieldStar to set unit-level prices.

I think "expected to review... use the program to set rents" must be a description of how the software is designed, not some reward or penalty scheme for setting recommended prices.

There's a whole section starting on page 54 that details how RealPage encourages landlords to converge on price, and there's no enforcement mechanism mentioned.

The law also does not prohibit a company from dominating a market. It prohibits using monopoly power to engage in certain practices. And monopoly position isn't an input to the price fixing function: it would be illegal even if between two self-employed plumbers.

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

#378

Post by gruez »

spencerflem wrote: post #339
gruez wrote: post #332

Earlier quoted context omitted.

>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…

The optimal rent for who? The point is that if Everyone has higher prices, because you can't not have a place to live people will be forced to pay more

The market clearing price on supply-demand curve.

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

#379

Post by gruez »

llamaimperative wrote: post #338
gruez wrote: post #332

Earlier quoted context omitted.

>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…

It seems like you're saying "I don't know how they'd do a thing they're not trying to do." I wouldn't read too much into the slight vagueness around the distinction between just setting prices with the information available versus what Realpage was actually doing (as you describe) – I'm sure the case itself will draw such a distinction pretty well.

>It seems like you're saying "I don't know how they'd do a thing they're not trying to do."

because the commenter I was replying to was characterizing what realpage was doing as "using mathematical algorithms to align their rents", which isn't illegal in and of itself. I specifically acknowledged in my previous comment that realpage was doing more.

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

#380

Post by SpicyLemonZest »

mullingitover wrote: post #358
__loam wrote: post #337

Earlier quoted context omitted.

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.

The reason we don't have it in the US is that many cities tried and failed to make it work in the 50s and 60s, to the point that we have a slang term "projects" memorializing the failure. Public housing can't be desirable unless it's safe, and it's not clear whether anyone knows how to run a crime-free public housing project in the US.
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