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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

#401

Post by advael »

gruez wrote: post #375
advael wrote: post #340

Earlier quoted context omitted.

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.

If you read my comment at all, you'd notice it leads with drawing a distinction between your hypothetical scenario and the actual case at hand. If you read my comment carefully, you might also notice that I'm being extra charitable by not pointing out that your hypothetical relies on oversimplifying how pricing signals operate in the real world. Of course you can make the problem seem to go away if you demand a simplification that elides all the details relevant to the problem.

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

#402

Post by duped »

bunderbunder wrote: post #313
rcpt wrote: post #291

Earlier quoted context omitted.

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

Alternatively, we adjust the tax code to reflect the instinct that people should deserve to keep a larger percentage of money when they actually worked to earn it, and that income that's essentially free to people who already have lots of money should maybe be taxed at a higher rate. I realize this is a spicy take, but we've really got to get away from this thing where we advantage passive income for wealthy landowne…

To be fair, the income isn't "free" and the margins are basically zero for small-time property owners on the rent itself. The bulk of the income comes from appreciation in value of the real estate, and when you sell you owe capital gains taxes (which are exempt on sales of a primary residence). And in most places the property taxes are higher, for my home it's about 15% higher.

I only know this because I have been preparing to rent my primary residence to see if it's more economical to sell today or hold and sell later, while renting. The answer is the latter, but in terms of real cash I will be in the red for about 2 years until the (very small) difference in mortage + insurance + taxes + upkeep and the rent will be profitable. And even then, it's maybe $150/month.

All told it's a slightly better investment than S&P 500 index funds, but resistant to downturns. But it's not a real source of passive income, you don't get your cash out for years.

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

#403

Post by no_wizard »

enriquec wrote: post #346
no_wizard wrote: post #325

Earlier quoted context omitted.

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…

This has already failed. The bay area is full of empty land and buildings owned by firms and a horrific housing situation. Doesn't stop the statists from proposing yet more tax for every single problem though.

California does not have a land value tax, even attempting to study the effects of a land value tax failed[0]

[0]: https://www.billtrack50.com/billdetail/1555689

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

#404

Post by gruez »

advael wrote: post #401
gruez wrote: post #375

Earlier quoted context omitted.

>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.

If you read my comment at all, you'd notice it leads with drawing a distinction between your hypothetical scenario and the actual case at hand. If you read my comment carefully, you might also notice that I'm being extra charitable by not pointing out that your hypothetical relies on oversimplifying how pricing signals operate in the real world. Of course you can make the problem seem to go away if you demand a simpl…

>If you read my comment at all, you'd notice it leads with drawing a distinction between your hypothetical scenario and the actual case at hand.

And that distinction was specifically acknowledged in my original comment.

"Realpage goes beyond this by pressuring landlords to accept their recommended price, and that's probably what got them in hot water"

>If you read my comment carefully, you might also notice that I'm being extra charitable by not pointing out that your hypothetical relies on oversimplifying how pricing signals operate in the real world. Of course you can make the problem seem to go away if you demand a simplification that elides all the details relevant to the problem.

How does "how pricing signals operate in the real world" prevent my model from working? All you need is some sort of market research firm to provide key statistics like vacancy rate, disposable income, and average rent, and every landlord can arrive at approximately the same same rent.

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

#405

Post by dang »

Related. Others?

San Francisco seeks ban of software critics say is used to inflate rents - https://news.ycombinator.com/item?id=41227792 - Aug 2024 (185 comments)

San Francisco to Ban Rent-Setting Software Amid Gouging Worry - https://news.ycombinator.com/item?id=41163936 - Aug 2024 (48 comments)

San Francisco Moves to Ban Anti-Competitive Rent Software - https://news.ycombinator.com/item?id=41155792 - Aug 2024 (7 comments)

San Francisco to ban software that "enables price collusion" by landlords - https://news.ycombinator.com/item?id=41133143 - Aug 2024 (17 comments)

Hoping to cut San Francisco rents, supervisors approve software-pricing ban - https://news.ycombinator.com/item?id=41125232 - Aug 2024 (1 comment)

Why US renters are taking corporate landlords to court - https://news.ycombinator.com/item?id=40261647 - May 2024 (110 comments)

Rents are soaring. Is RealPage to blame? - https://news.ycombinator.com/item?id=39992731 - April 2024 (207 comments)

Lawmakers Seeking to Outlaw Rent Price Fixing Reported by Propublica - https://news.ycombinator.com/item?id=39206493 - Jan 2024 (56 comments)

Big landlords used software to collude on rent prices, DC lawsuit says - https://news.ycombinator.com/item?id=38114264 - Nov 2023 (375 comments)

The rent is too damn algorithmic - https://news.ycombinator.com/item?id=37829575 - Oct 2023 (147 comments)

Landlord Software Is Making Life Hell for Renters, Report Says - https://news.ycombinator.com/item?id=35786820 - May 2023 (17 comments)

I saw RealPage's crappy rent-jacking-up software so you don't have to - https://news.ycombinator.com/item?id=34926683 - Feb 2023 (403 comments)

DOJ will examine whether RealPage helped landlords coordinate rent increases - https://news.ycombinator.com/item?id=33744136 - Nov 2022 (123 comments)

RealPage and landlords illegally created a 'cartel' to set prices, lawsuit says - https://news.ycombinator.com/item?id=33633541 - Nov 2022 (3 comments)

US senator seeks antitrust review of apartment price-setting software - https://news.ycombinator.com/item?id=33444092 - Nov 2022 (6 comments)

Lawsuit filed against rent-setting software RealPage - https://news.ycombinator.com/item?id=33317414 - Oct 2022 (50 comments)

Clever algorithm may be what's driving rent prices so high - https://news.ycombinator.com/item?id=33313028 - Oct 2022 (6 comments)

Rent going up? One company’s algorithm could be why - https://news.ycombinator.com/item?id=33224502 - Oct 2022 (279 comments)

Landlords use software to set rental rates - https://news.ycombinator.com/item?id=3294248 - Nov 2011 (5 comments)

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

#406

Post by seanmcdirmid »

__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.

Commie blocks don’t work, just ask China who has an even more messed up property market than we do.

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

#407

Post by seanmcdirmid »

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.

We don’t have it because we aren’t a city state. In Singapore, you have a few choices, but they are all in Singapore. If the public housing system came to the USA without any local residency requirements, everyone would want to live in a few hot cities and the system would just fall apart. Not only that, once residency restrictions are in place, people will be stuck in places due to their public housing, they won’t be able to just move to Seattle for better job opportunities.

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

#408

Post by bunderbunder »

duped wrote: post #402
bunderbunder wrote: post #313

Earlier quoted context omitted.

Alternatively, we adjust the tax code to reflect the instinct that people should deserve to keep a larger percentage of money when they actually worked to earn it, and that income that's essentially free to people who already have lots of money should maybe be taxed at a higher rate. I realize this is a spicy take, but we've really got to get away from this thing where we advantage passive income for wealthy landowne…

To be fair, the income isn't "free" and the margins are basically zero for small-time property owners on the rent itself. The bulk of the income comes from appreciation in value of the real estate, and when you sell you owe capital gains taxes (which are exempt on sales of a primary residence). And in most places the property taxes are higher, for my home it's about 15% higher. I only know this because I have been pr…

It sounds like you're looking at it from the perspective of someone who's wealthy enough to take on a few rental properties of their own. The economics start looking rather different from the perspective of a real estate speculation hedge fund. The same forces that make it such easy money for them are also the ones that make it not such easy money for you. When they drive up prices it curtails any more liquid form of asset growth you might have by pulling all the money over to the on-paper value of the property. That's fine for them because real estate is still pretty darn liquid from the perspective of hedge funds and REITs. But it's not very liquid at all from the perspective of a small-time landlord who needs to actually look their tenant in the eye and tell them they're facing eviction because the owner of their home needs to free up some spending money. This, in turn, helps them by creating barriers to entry that push smaller competitors out of the business and securing their place in the oligopoly they're trying to engender.

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

#409

Post by JumpCrisscross »

BeetleB wrote: post #399
JumpCrisscross wrote: post #368

Earlier quoted context omitted.

> 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…

> 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.) In my experience: A tiny minority (for housing - not sure about commercial). This is one of those cases where selection bias applies. As most landlords really hate vacancies, the ones you do see are the tiny few that don't. And…

> A tiny minority

Of landlords altogether, sure. Counting by unit in high-demand locations, unclear.

> property doesn't appreciate much here

You're describing a stable housing market. Those aren't where RealPage is accused of making mischief.

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

#410

Post by no_wizard »

bilbo0s wrote: post #321
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…

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 prefe…

Land value tax would fix this in a hurry. Land owners would be incentivized to sell or make more productive use of their land, which adds enough positive pressure for them to go to market and make a deal. The biggest flaw in US housing is the ability to hold out at effectively no cost even as land value skyrockets. The taxation does not keep pace with the actual value. This allows stubborn sellers who want above market sales to hold out, potentially for years, until someone buys at an inflated price, with no real downside.

Combine with upzoning and it would really stimulate the housing market in short order without subsidy.

Land, being largely finite - especially when you start considering how communities make land more valuable etc - shouldn't be treated as a manufactured good. A land value tax is the only way to bring market incentives to real estate, because otherwise there is no pressure on owners to sell or otherwise make more productive use of land. Our current policies from local to state to federal, all incentivize holding land regardless of its utility.

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