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

501–510 of 646 posts

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

#501

Post by abduhl »

gunapologist99 wrote: post #495

This is not appropriate for the DOJ to be taking up. They have nearly unlimited resources and have far bigger fish to fry. The appropriate enforcement agencies are the States' Attorneys General. If they feel that their constituents are being harmed, they can take it up with the courts. There is certainly zero evidence that RealPage has any sort of monopoly. The DOJ would have named that evidence in their press releas…

>> this seem to be a ham-handed attempt to seek a consent decree to create minimum rent prices, nationwide, without any appropriate legislation. And that will actually harm consumers.

Where does this contention come from? What makes it “seem” like this is the goal of the DOJ to you?

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

#502

Post by gunapologist99 »

Sohcahtoa82 wrote: post #40
legitster wrote: post #30

I am a small-time landlord. There's no "marginal cost" to determine how much to charge for rent. The only thing I use to determine the price is the current market rate. And all I have to do is open up Zillow or Craigslist and do a search on similar properties with similar characteristics. It only takes ~5 minutes of research to get a competitive market rate. While RealPage might command 80% of the market for this typ…

> While RealPage might command 80% of the market for this type of software, they only have 12,000 clients. There are over 5.2 million multi-family dwellings in the US. That reveals a startling statistic that 80% of the market is controlled by only 12,000 users. That's 433 units per user on average.

> That reveals a startling statistic that 80% of the market is controlled by only 12,000 users. That's 433 units per user on average.

This conflates the market for this type of software with the larger housing market. Presumably, this software is only used by some large (probably mostly hedge-fund or REIT funds) apartment complexes. So, yeah, 80% of that market, but that's only a tiny amount of the overall market.

The DOJ chose that number (almost certainly out of a hat, because there's no way to actually identify all of them) of 80% in order to make it seem like it's a monopoly, but proving at trial that RealPage or its clients controls prices over more than a tiny fraction of the market will be incredibly difficult (actually impossible, because it's obviously not true).

However, given the DOJ's limitless funding to pursue this, clearly it's not after actually winning at trial; it's after a consent decree.

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

#503

Post by simoncion »

jjav wrote: post #450
amy-petrik-214 wrote: post #235

Earlier quoted context omitted.

price controls is rent control. SF. see also: NYC "you can raise rent by X% per year AT MOST, no more than that" if inflation / supply/demand is >X%, the landlord eats it. Thus landlording might be for some, more appealing elsewhere. Cali also has prop 13 i.e. rent control on real estate taxes. So if I bought my house in 1955, I might pay $100/year in property tax, the guy who just bought a completely identical house…

> So if I bought my house in 1955, I might pay $100/year in property tax Ok it's fine to point out drawbacks of Prop 13, but making up stuff doesn't help. Prop 13 baseline assessment used 1976 values, so buying in 1955 doesn't make any difference, it still started on 1976 valuation. It goes up 2% every year, so for this scenario we're talking about a house that was worth well under 10K in 1976. The median house price…

> ...but making up stuff doesn't help.

Eh, the order of magnitude difference is pretty spot-on.

Housing prices are absurd, and their rate of increase massively outpaces the rate of increase for pretty much every other thing a person would purchase.

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

#504

Post by gunapologist99 »

abduhl wrote: post #501
gunapologist99 wrote: post #495

This is not appropriate for the DOJ to be taking up. They have nearly unlimited resources and have far bigger fish to fry. The appropriate enforcement agencies are the States' Attorneys General. If they feel that their constituents are being harmed, they can take it up with the courts. There is certainly zero evidence that RealPage has any sort of monopoly. The DOJ would have named that evidence in their press releas…

>> this seem to be a ham-handed attempt to seek a consent decree to create minimum rent prices, nationwide, without any appropriate legislation. And that will actually harm consumers. Where does this contention come from? What makes it “seem” like this is the goal of the DOJ to you?

The DOJ has not a prayer of proving that RealPage (or its clients or whatever) controls more than a tiny minority of the housing market, because it just doesn't. This is a tiny tiny fraction of all housing nationwide.

So, since it can't do that and actually win this case on that basis, but on the other hand has virtually unlimited resources to string this out indefinitely, it's after something else. So, what do you think that could be? My guess is that this is an attempt at forcing these complexes into a price-setting consent decree.

(by the way, thanks for actually responding with a criticism. A lot of time people just signal they disagree but they can't be bothered or can't articulate a real response. I do appreciate the substantive argument even if we might disagree)

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

#505

Post by alasdair_ »

hoosieree wrote: post #474
sithadmin wrote: post #438

Earlier quoted context omitted.

Not just by algorithm. In the US, many large employers utilize 'The Work Number' by Equifax for employment verification services, and share details about individual employees as granular as individual paycheck disbursements. This information is visible to other employers that buy in to the scheme, and obviously favors the employer in salary negotiations with a candidate.

Data brokers are a scourge. They should be illegal, or at the very least regulated. For example, here's an idea for one such regulation: If the company purchases aggregated salary data, they must publish their own salaries for at least 1 year.

Just make PII copyright of the person it identifies, similar to how a "likeness" is owned by a person.

Then sue for copyright infringement.

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

#506

Post by HelloMcFly »

tfehring wrote: post #465
ndesaulniers wrote: post #447

Earlier quoted context omitted.

HR is not your friend. Corporate Confidential by Cynthia Shapiro is a recommended read. My advice; get a better offer elsewhere, then see if HR wants to pay you your worth.

The comment you replied to seems to be targeted at managers trying to advocate for their teams, not at individual contributors trying to advocate for themselves. I agree that reaching out to the compensation team as an IC is generally not going to be an appropriate or effective way to get a raise. But for managers, working with HR on issues like that is just part of the job.

Thank you, yes. This is not an uncommon managerial problem that is often resolved (not always; I've had both experiences), though perhaps not in a timely manner.

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

#507

Post by treyd »

js2 wrote: post #255
Animats wrote: post #210

Earlier quoted context omitted.

Criminal antitrust prosecutions seem to have stopped in 1977. Unclear why they never restarted.

There are criminal antitrust cases[1], but they are hard to win. From "Why Does the Antitrust Division Keep Losing Criminal Trials?"[2]: > Even in the best of circumstances, prosecuting criminal antitrust cases can be challenging. They require a deep understanding of a particular market and proof beyond a reasonable doubt that the defendants entered into an illegal agreement. His- torically, the Division relied on mu…

It feels like antitrust law needs an update now that we have computers that let us move the collusion one degree away fairly easily. It's still price fixing even if you don't know the names of the parties you're collaborating with.

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

#508

Post by ClumsyPilot »

colonCapitalDee wrote: post #456
ang_cire wrote: post #421

Earlier quoted context omitted.

> If a company is able to price a product above their competitors and still succeed (e.g. by investing more in marketing), that's legal too. Yes, but it also runs counter to the idea that free markets tend to drive prices down through competition. In reality, 1 of 2 things happens: a) companies try to differentiate their products enough to not be direct competitors (e.g. exclusive content on streaming platforms, or p…

No, your time horizon is too short. Prices go up in the short term, which increases profits, which incentivizes competition, which brings prices down in the long term. A few years of increased prices is worth increased efficiency over decades. Prices are going in most industries, US markets are generally quite competitive.

> which increases profits, which incentivizes competition

This is a fantasy. Give two examples of major markets where competition has increased recently.

The US economy has grown what, 4 times since 1990’s but the number of registered companies has fallen by half.

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

#509

Post by Xeoncross »

lelanthran wrote: post #466
ndesaulniers wrote: post #447

Earlier quoted context omitted.

HR is not your friend. Corporate Confidential by Cynthia Shapiro is a recommended read. My advice; get a better offer elsewhere, then see if HR wants to pay you your worth.

> HR is not your friend. Most people don't get this. HR exists to protect the company from the employees, not protect the employees from the company.

+1 It's called "Human" resources not "Company" resources for a reason.

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

#510

Post by andrewmutz »

tqi wrote: post #499
andrewmutz wrote: post #486

Earlier quoted context omitted.

I built software for this industry (not at realpage) for 10+ years and can explain why price compliance is a big deal. The reason is that there is a fundamental principal vs. agent problem in the fee-based property management industry. Usually an investor buys a building and then hires a separate corporation called a fee-based property management company to manage the property. The management company gets to keep 8-1…

> the owner is the person who chooses to enforce the pricing algorithm Very interesting - I can't find anything about this on their website, but assuming that is the case I feel like this is the only explanation so far in this thread that makes sense. Other explanations in this thread (marketing, optimizing for all the customers) fall short to me because (as far as I can tell) there is no reward / punishment mechanis…

To the best of my understanding I think the technology does drive up prices, but not in an anticompetitive way. I know people get really passionate about this, so I don't want to argue with people on hacker news about it, but to the best of my understanding this is what is happening:

Rental prices in the USA keep going up primarily due to a housing shortage.

Revenue optimization algorithms like realpage's do genuinely increase rents by about 2-5%, because without them fee-based property managers lower rents below market-clearing price in order to make it easier on themselves.

The increased rent that comes from using these algorithms is, in my opinion, not really anti-competitive. If you only used public information for the pricing algorithm, you'd get largely the same prices out of the system. In almost all rental markets, algorithmic pricing of any sort doesn't have high enough market share to see success by anticompetitive price-fixing, since most suppliers of housing don't use it.

Apartment rents are crazy high because there simply isnt enough housing, and we dont let people build enough dense housing near jobs. Going after Realpage, or blackrock, or landlords, or AirBnB is just trying to find a scapegoat, when the hard truth is we need to let people build more housing near where the jobs are.

Post reply on HN