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

411–420 of 646 posts

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

#411

Post by advael »

gruez wrote: post #404
advael wrote: post #401

Earlier quoted context omitted.

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…

Right, I think that's not the only distinction here. Yes, Realpage pushes its customers to accept its recommendations. But by centralizing where this research is done, it doesn't have to do that to be engaging in anticompetitive behavior, because it also aggregates data volunteered by other organizations you might be nominally competing with, and the more people are using this service, the less likely a competitor might have some information that's not publicly available (or even that is available but isn't part of some standard method of analysis) they might be using to compete on price. The centralization of this service across competing organizations unto itself is a form of price-fixing, regardless of whether the company also demands that you use its estimates

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

#412

Post by JumpCrisscross »

gruez wrote: post #398
JumpCrisscross wrote: post #385

Earlier quoted context omitted.

> I was specifically talking about the case where everyone derives the optimal price independently If you're using the same model you know your competitors use it isn't an independent derivation.

What if there's only one plausible model rent valuation, or there's multiple plausible models that spit out basically the same number? For instance, options are widely priced using the black-scholes model, because that's basically the state of the art. Is everyone using that model engaging in price collusion as well? Sure, there might be a bunch of parameters that are adjustable that each landlord has to come up with…

> What if there's only one plausible model rent valuation, or there's multiple plausible models that spit out basically the same number?

Then we'd have a different situation.

> options are widely priced using the black-scholes model, because that's basically the state of the art. Is everyone using that model engaging in price collusion as well?

Options dealers would absolutely get smoked if they all started using the same model to increase spreads. As for the base pricing model, everyone is constantly iterating and adapting it. Because they're competing. (Source: former options market maker.)

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

#413

Post by bunderbunder »

enriquec wrote: post #348
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…

Or stop stealing everyones money through inflation?

All models are wrong. But the model that suggests that inflation is directly controlled a knob that policymakers can turn on a whim is incredibly useful to the people who stand to profit the most from deflationary policies.

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

#414

Post by [deleted] »

mullingitover wrote: post #373
pc86 wrote: post #361

Earlier quoted context omitted.

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.

[deleted]

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

#415

Post by AceyMan »

andrew_eu wrote: post #176
bogwog wrote: post #152

Earlier quoted context omitted.

I think you're over analyzing and confusing things. Price fixing is when competitors work together to raise prices above what they would normally be in a competitive market. Using your gas station example, a gas station isn't going to look at a competitor selling gas at $4.15 and decide to raise their price to $4.45. They would lower their price to match the competition, otherwise they'd lose sales and make less mone…

The analogy also works in the opposite direction. If a gas station is selling at $4.10 a gallon and another down the street is selling at $4.15, the first gas station could happily up their price to $4.14. 1% more revenue and they're still the cheapest on the block.

The theory is correct, but the example is not the best: petrol prices are not as elastic as you'd think.

If I need to make a left turn across traffic or go around the block I'm not topping off at a station just for 5 cents/gal. (Tho, I might make a mental note & use that station when I'm coming down the other way, when it's easy to in & out.)

Los Angeles in particular is crazy. We have the equivalent to micro-climates with fuel prices. Stations a half mile apart can be 30¢ different. Stations a town apart can be 70–80¢ different.

And there are a couple of stations in Beverly Hills adjacent that are ~$2.50 more than the going rate (no surprise there, tho).

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

#416

Post by HDThoreaun »

seanmcdirmid wrote: post #406
__loam wrote: post #337

Earlier quoted context omitted.

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.

The chinese property bubble was created because of the lack of equity markets for chinese investors to dump money in. Without good investments to be had the chinese turned to pure speculation in the real estate market. Their housing market is actually quite good at providing housing, in fact theyve lifted 800+ million people out of poverty in the last 80 years. Just the crappy financial regulations that caused the problem.

The American housing market does not seem to have much speculation right now. Houses actually provide utility around equal to what they cost here, theres just a big enough wealth disparity combined with not enough housing that a huge number of people cant afford that price.

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

#418

Post by radicality »

tootie wrote: post #11
bearjaws wrote: post #7

I am very curious how this will play out. On one hand, I have seen it first hand here in Orlando that EVERY apartment complex uses the same software, all of them. At the same time, rent has gone up 300% in 10 years, or around 10% per year. FTA it states that it was the fact that they all shared all their pricing and inventory data with RealPage, which then determined the price using algorithms and therefore rental pr…

Yeah, there's nothing inherently wrong with algorithmic pricing. Issues would start to occur if the pricing was actively manipulated and RealPage was used by so many landlords in some geographic areas that competition broke down. That may be hard to prove.

The pricing is manipulated though. If you’re part of RealPage, it will “recommend” the prices to set for your apartments, except you as the landlord are only allowed to disagree a small % of the time, or else you can get kicked out from the apartment mafia.

So to keep their customers happy, RealPage will configure it to keep increasing prices, and it’s not really in any landlords’ interest to disagree.

I live in a building managed by a group that uses RealPage. They keep increasing prices and say “Computer says this is $X, can’t do anything, sorry”.

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

#419

Post by no_wizard »

ZoomerCretin wrote: post #198
toomuchtodo wrote: post #193

Earlier quoted context omitted.

I support price regulation when called for. Your hyperbole is...not congruent with reality, considering the incredible agriculture subsidies provided and automobile tariffs. https://www.theatlantic.com/ideas/archive/2024/08/economists... https://www.ncsl.org/financial-services/price-gouging-state-... https://www.whitehouse.gov/briefing-room/statements-releases... From a paid Matt Stoller BIG ( https://thebignewslette…

>I support price regulation when called for. Your hyperbole is...not congruent with reality, considering the incredible agriculture subsidies provided and automobile tariffs. The outrageous profiteering in food and groceries is not with the hyper-subsidized agriculture industry that grows food and raises livestock, but up the supply chain in the middle-men who buy this to process and package it (especially meatpackin…

>Sounds like the real solution to this problem is the same solution to the housing market: Too many laws preventing new entrants, which prevents natural competition from lowering prices.

I could buy this for many industries, but real estate has no functioning free market dynamics because there is no external pressures to facilitate maximal usage of land value (and therefore sale or productive usage like building more homes), in fact most of zoning laws do just the opposite - they encourage low yield development for the sake of holding existing land owners value higher.

A land value tax would flip this narrative, applying an actual market force to real estate market dynamics. This would incentivize maximal productive use of land to pay for the land value tax. Not to mention, land value taxes are easier to implement and assess value on. It also puts an actual value on what makes the land valuable - the community aspect, like being located near shopping centers - and returns money back into the community. Combined with upzoning, you would see more churn in the housing market and massive incentivizes to build more housing, because you would finally have a pricing pressure on the value of the land.

Changing zoning alone isn't going to make the same dent either, because it does nothing to incentivize the sale of land, same with changing any regulation around housing. You need something that facilitates land owners to actively make productive maximal use of land value, and an LVT will do that.

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

#420

Post by duped »

bunderbunder wrote: post #408
duped wrote: post #402

Earlier quoted context omitted.

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…

The actual number of residential properties owned by hedge funds is a pittance compared to the number owned by individuals and small time land lords. So I have a hard time seeing how they're pushing smaller competitors out of the business when the smallest competitors aren't even doing it as a business.
Post reply on HN