DOJ sues realpage for algorithmic pricing scheme that harms renters • Hacker News Board

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

#61

Post by lcnPylGDnU4H9OF » Fri, Aug 23, 2024, 5:27 PM UTC

legitster wrote: post #44

Sohcahtoa82 wrote: post #40

Earlier quoted context omitted.

> 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.

I think the better implication is that the vast majority of apartment owners don't bother paying for pricing software. It's worth pointing out that third-party tools like 6Sense assess RealPage's customer base as much, much lower (around 6000 paying customers).

> I think the better implication is that the vast majority of apartment owners don't bother paying for pricing software.

I don't think there's anything so far to indicate this or that; there's still a reasonable possibility that 80% of the market is controlled by large property management businesses.

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

#62

Post by Manuel_D » Fri, Aug 23, 2024, 5:27 PM UTC

toomuchtodo wrote: post #53

Manuel_D wrote: post #47

Earlier quoted context omitted.

The phrase "protect renters" is often used as a dogwhistle for price controls. For example, rent control and affordable housing mandates that require a certain % of units to be rented at below market rates. Can you elaborate on what exactly you're referring to here?

This would be an unproductive use of time. It is very clear you are pro "no regulation" around housing (based on your thread comments, "just build more"), so a heated argument with the potential for the subthread to be detached by dang does none of us any good. I'm not here to change your belief system, and to attempt to do so would provide no meaningful impact to macro outcomes.

All I'm asking you to do is list the specific laws or regulation you're referring to here when you write about the need to "protect renters". I don't know if we agree or disagree, because you haven't actually stated what your beliefs are.

I definitely support regulations around housing: housind needs to be safe (fire exits, sprinklers, etc.). Landlords can't engage in deceptive practices, like putting up ads for one unit and giving the tenant a different one. Units should be promptly repaired. Landlords shouldn't discriminate on the basis of protected class. I could go on.

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

#63

Post by tossandthrow » Fri, Aug 23, 2024, 5:27 PM UTC

itake wrote: post #34

toomuchtodo wrote: post #28

Earlier quoted context omitted.

Profits are fine, excessive profits at the cost of people who need housing are not. There is no silver bullet, but increasing supply along with strong regulation to protect renters is welcome vs them being cattle to be squeezed by for profit entities. Human rights are a thing, there is no right to profit. > The six largest publicly traded apartment companies in the U.S. — all of which are linked to an alleged rental…

strong regulation increases costs (see all the permits and surveys required in SF). What are "excessive profits"? 10%? 15%? 25%? > experienced profit increases during the first three months of the year Does this even mean anything? This could mean their vacancy rate decreased and thus their business is more profitable. I don't see the issue with companies reducing vacancies and providing more housing to more people.

The natural interest rate plus a bit.

If you can earn 25% percent in profits in the current environment then it is a clear indication of an inefficient market - a market that needs to be regulated in order to create efficiency (like in this case as with many other cases: remove monopolistic behavior).

While it is problematic if you can't derive profits from productive activities it is also problematic when entities derive unsustainable profits - also for the party deriving the profits.

If there is not a bit middle class to consume products, then there will not be be a market to supply products to.

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

#64

Post by mistrial9 » Fri, Aug 23, 2024, 5:27 PM UTC

jmole wrote: post #32

Manuel_D wrote: post #25

Earlier quoted context omitted.

Do you want to invest tens of millions of dollars into building an apartment with zero expectations of making a return? If there's no profit to be made in building housing, why would anyone want to build housing? This line of thinking is what leads to situations like San Francisco, where price controls on housing lead to few developers willing to build there. If it's proven that landlords colluded to fix prices, that…

There is a lot more to San Francisco's housing crisis than price controls: lengthy permitting processes, environmental reviews, NIMBY community outreach, etc.

San Francisco has always been a crooked city.. fleecing newbies is sport.. they have jokes and murals and parties around it and always have.. in the American era.. source: personal testimony by someone born and raised there around 1900

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

#65

Post by kpw94 » Fri, Aug 23, 2024, 5:28 PM UTC

jasode wrote: post #19

>Armed with competing landlords’ data, RealPage also encourages loyalty to the algorithm’s recommendations through, among other measures, “auto accept” functionality and pricing advisors who monitor landlords’ compliance. I think the "private prices" + "autoaccept" + "compliance" is the key misbehavior that gets RealPage into legal trouble. If competitors want to converge on prices in a legal manner , they have to do…

Many listings for apartments are on on-site.com (which is "a RealPage company") and are publicly available...

So it could be argued it's not

"private prices" + "autoaccept" + "compliance"

But rather

"public prices" + "autoaccept" + "compliance"

Still problematic behavior (and probably add "private knowledge of inventory forecast" on top of that), but I'd argue price signaling of the available inventory isn't the main issue.

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

#66

Post by legitster » Fri, Aug 23, 2024, 5:28 PM UTC

Carrok wrote: post #48

legitster wrote: post #39

Earlier quoted context omitted.

Modern housing is a direct development of the industrial revolution. In that sense it is an industry. You could provide housing like undeveloped nations do, where large families live in cramped hovels without electricity or running water. In the sense that someone should want an apartment with 2 bathrooms, a fireplace, and a pool - it's easier to treat housing overall as a consumer good.

This is quite the straw man you've constructed. You seem to be suggesting that either housing must be exploitatively expensive, or people must live in squalor.

You are strawmanning me. Nothing in my statement suggests that treating housing as a product means it has to be exploitatively expensive or given away for free. If anything, most industrial products are supposed to get cheaper over time.

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

#67

Post by Alupis » Fri, Aug 23, 2024, 5:29 PM UTC

Carrok wrote: post #23

lukev wrote: post #16

Some quotes from the filing: > Discussing a different RealPage product, another landlord said: “I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing . . . .” > In fact, as RealPage’s Vice President of Revenue Management Advisory Services described, “there is greater good in everybody succeeding versus essentially trying…

> industry The fact that providing people with housing is even seen as an "industry" is a big sign of what is wrong with the world right now. It is essential to living a decent life. It should not be a driver of lining the pockets of people who are already rich.

> The fact that providing people with housing is even seen as an "industry"

> It is essential to living a decent life.

What troublesome phrasing. "Provide" implies people should get housing for free, and "decent" implies getting "decent" housing for free...

Well, so who is actually paying for it then? Magical handwavy "government" money? Everyone knows where government money comes from, right? Right?

Do we want more printed money and uncontrollable inflation? No? Oh so we should just steal this money from people who worked hard, because some others didn't?

> It should not be a driver of lining the pockets of people who are already rich.

Ah yes, the ol' "rich people bad" whipping horse. Despite the tens of millions of jobs created by "rich people" and the millions and millions of people who live in actually decent housing in exchange for market rates.

The fact that some people actually truly believe "free government housing" is going to be "decent" is absolutely tragic. Yes, let's doom millions to the "projects" because it makes us feel better knowing those darn rich people aren't making money!

If anyone wants a porthole view into what government housing looks like - take a look at the plethora of stories and pictures from our military barracks, across all branches. Mold, bugs, broken appliances, holes in walls, locks that don't work... and nobody cares despite the very vocal, highly visible complaints. There's a reason our service men and women scramble to off-base housing the moment they are allowed.

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

#68

Post by Manuel_D » Fri, Aug 23, 2024, 5:30 PM UTC

raincom wrote: post #54

Manuel_D wrote: post #25

Earlier quoted context omitted.

Do you want to invest tens of millions of dollars into building an apartment with zero expectations of making a return? If there's no profit to be made in building housing, why would anyone want to build housing? This line of thinking is what leads to situations like San Francisco, where price controls on housing lead to few developers willing to build there. If it's proven that landlords colluded to fix prices, that…

Realpage is involved in a vicious loop, not a virtuous loop. Even in the Bay Area, corporate landlords jack up rent like 10% every year, whereas small landlords are happy to raise rent by 3%. That's the difference due to algorithmic collusion set and controlled by RealPage.

How are the corporate landlords able to rent their units if the small landlords are selling equal quality units for substantially less? Wouldn't everyone just rent from the small landlords while the corporate apartments stay vacant? This is the hole in the price-fixing argument: price-fixing only works when everyone is onboard, otherwise the parties not involved in price fixing will gobble up the market share.

I wouldn't be surprised if corporate-run apartments are more expensive. They're are usually renting much nicer buildings with amenities like air conditioning, parcel delivery rooms, gated parking, etc.

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

#69

Post by matwood » Fri, Aug 23, 2024, 5:30 PM UTC

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…

I generally agree with your assessment. As someone mentioned above though, I think the emails where RealPage is telling landlords not to lower prices are much more damning. It puts RP as the locus of collusion.

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

#70

Post by lawlessone » Fri, Aug 23, 2024, 5:30 PM UTC

legitster wrote: post #43

lukev wrote: post #16

Some quotes from the filing: > Discussing a different RealPage product, another landlord said: “I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing . . . .” > In fact, as RealPage’s Vice President of Revenue Management Advisory Services described, “there is greater good in everybody succeeding versus essentially trying…

[flagged]

Well yeah? for most people housing isn't abstract.