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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

#571

Post by slt2021 »

wh0knows wrote: post #516
andrewmutz wrote: post #510

Earlier quoted context omitted.

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 genuinel…

This definitely requires some citations. There is no evidence that you are presenting that supports the 2-5% claim. I don’t think you are fully understanding the impact of price collusion or the suit presented here. The DOJ very clearly thinks this is anticompetitive.

False, you are wrong.

Corporate landlords use RealPage in Austin, Minneapolis yet rents fall there because of supply of new housing.

RealPage does impact rental prices, but only marginally, and the real impact to prices is from supply constraint + demand.

If there is enough supply, any realpage algorithm wont matter much because of market forces. Market forces trump everything

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

#572

Post by tqi »

sleepybrett wrote: post #545
andrewmutz wrote: post #531

Earlier quoted context omitted.

Honestly the strongest argument I've heard that these algorithms are anticompetitive is "The DoJ thinks they are". So maybe there's some non-public information of anticompetitive behavior. We don't know how many housing units use Realpage pricing algorithms in 2024, but in 2017 when Realpage bought the tech, it was being used in 1.5 million rentals ( https://www.realpage.com/news/realpage-to-acquire-lease-rent... ) a…

The doj doesn't lose cases like these, and doesn't bring cases that are absolute slam dunks.

"The Department of Justice (DOJ) Antitrust Division — for the third time in the span of a year — recently failed to convince a jury that alleged agreements to fix or stabilize labor markets should be punished criminally."

https://www.skadden.com/insights/publications/2023/04/quarte...

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

#573

Post by roenxi »

Law or otherwise, I don't see how this would have a big impact on rents. The landlords can't declare themselves immune to supply and demand - there is a market price and if their rents are too high the housing will be empty. They can't form a big monopoly by talking to each other, because the cost of having empty properties will fall on specific landlords who then have incentive to defect and go towards the market price.

I'm sure the scheme is helpful to landlords at some level, but it'd be a bit weird if it was more than a marginal difference in rents.

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

#574

Post by itake »

bick_nyers wrote: post #60
Manuel_D wrote: post #24

Earlier quoted context omitted.

Lots of people want to blame rising prices on price fixing, when there really is growing demand without commensurate increases of supply. They want a silver bullet to bring down prices, without tackling the underlying problems. > That being said, I price my rental properties against what similar square footage gets at nearby apartments... Sooo if they are going up my rent is going up as well, and I bet most landlords…

I agree that the underlying issue is a lack of supply. However, if a landlord is commanding a 30% profit margin on a non-luxury apartment then I think they are contributing to the problem (to be clear, I'm not insinuating anyone in this thread is doing this). I think the only objective way to tell if it's priced too high is by the profit margin, but of course even that can be inflated if e.g. a developer took a huge…

> However, if a landlord is commanding a 30% profit margin

Landlords of properties paying 7%+ interest have negative profit margin and can't compete with 2-3% interest rates.

By some landlords having a 30% profit margin, other landlords can have a positive ROI (increasing rental supply)

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

#576

Post by leplen »

natdempk wrote: post #517
ndesaulniers wrote: post #417

Companies are culluding to suppress wages by algorithm, too. Look up a company called Aon, and their product called Radford Data & Analytics.

Similarly companies like Pave also do data collection and sharing to create “benchmarks” around salary and report out salary ranges for comparable companies and locations. I was wondering where the line is drawn between something like this and Realpage? Or even if you do some detailed survey about compensation and distribute it, at what point does this become anticompetitive? All of this does seem to rapidly be becom…

I think one of the biggest differences between comp benchmarking providers and RealPage is that two companies given access to the same benchmarks often make very different compensation decisions.

Some companies decide to pay at the 90th percentile of the market and some decide to pay at the 50th.

RealPage was much more proscriptive which is part of what tips the balance over into collusion vs just providing market statistics.

Zillow provides a zestimate for rents, which serves a similar market summary purpose but without the mechanism to enforce compliance and therefore is totally fine.

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

#577

Post by coredog64 »

oooyay wrote: post #189
andrew_eu wrote: post #176

Earlier quoted context omitted.

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.

Competitive markets keep things within a tolerance, imo. If the average is $4.10 then you can expect the price to vary up and down by some amount depending on location and other things provided. What RealPage does is distinct because it assures prices are always above and by orders of magnitude what they should be. It also achieves that through private communication which I think is generally accepted as a problem.

Order of magnitude is generally accepted as starting at 10x. Are you saying rents are 10-100x higher because of RealPage?

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

#578

Post by throwaway2037 »

sleepybrett wrote: post #551
tmoertel wrote: post #131

Earlier quoted context omitted.

The classic way that businesses openly coordinate their pricing is via price matching. Businesses advertise their preferred prices but also promise that they'll match lower prices from competitors. Competitors see these advertisements and set their own prices to approximately match. The FTC does not consider this type of open signaling to be price fixing: > Q: Our company monitors competitors' ads, and we sometimes o…

The rub is that if store and store b got together and negotiated a price they would stick to and not try to undercut each other, that's price fixing, and that is what realpage is doing on a MASSIVE scale. 'Cartel/Corporate' owners own ~70% of the units in Seattle. 11 total companies (big names you should know like gray star and equity residential), to the one they all use realpage. That's 70% of the market price fixe…

Before your second paragraph: I Googled about it and found this ProPublica story: https://www.propublica.org/article/yieldstar-rent-increase-r...

The exact quote:

    > In one neighborhood in Seattle, ProPublica found, 70% of apartments were overseen by just 10 property managers, every single one of which used pricing software sold by RealPage.
To be clear, that is "one neighborhood" in Seattle. Your second paragraph makes it seem like all of Seattle. To be clear, in neighborhoods with lots of new high rise buildings, this pattern seems normal to me: About 10 companies (or less) do most of the property management.

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

#579

Post by AnthonyMouse »

null0pointer wrote: post #561
ndesaulniers wrote: post #417

Companies are culluding to suppress wages by algorithm, too. Look up a company called Aon, and their product called Radford Data & Analytics.

Genuine question: How do people on HN reconcile the idea that tech salaries are suppressed with advocating for remote work and opening employment to the global market where employees are often paid much much less than in the US?

Remote work and offshore work aren't inherently the same thing. If you're a company with offices in New York City and San Francisco and you hire someone in San Diego or Rochester, you're still dealing with the laws of the same states and federal government. Even someone in Massachusetts or Texas is probably not a big deal.

But if you want to hire someone in Poland or Korea, do you even know what their laws are? How much do lawyers cost there, and are they any good? Is the government adversarial, or could it become adversarial? Do they discriminate against foreign employers? Employees there are probably going to want to be paid in a different currency; are you interested in dealing with issues if the value of that currency changes? International banking rules? If the cheapest hires are in seven different countries, do you want to go through all this seven different times? The team you're managing now sees daylight in the part of the day when you're asleep, is that going to be any trouble? Are you ready to deal with reports being poorly written because their native language is different than yours?

The reasons companies are willing to pay more to avoid dealing with all of this have very little to do with whether you work in an office or in your house which is in the same jurisdiction and hemisphere as the office.

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

#580

Post by tayo42 »

II2II wrote: post #524
tayo42 wrote: post #514

Earlier quoted context omitted.

Idk how people can even work in hr. Like how dead does your soul need to be to have such a old job.

Because it is a job that needs to be done and someone is willing to pay for it. For some people it may be the best job they can get. I understand why no one likes human resources. They are there to protect the interests of the business and it is in the best interest of the employee to interact with them as little as possible. On the other hand, they are a useful resource for managers. HR frees them up from many of th…

i mean if hr was just doing those things no one would complain. I get there's some nuance to the responsibilities of an HR department but interactions usually seem to be biased towards protect the company, not make peoples lives easier. So i think it takes a certain kind of person to actually be able to do that effectively.
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