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

71–80 of 646 posts

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

#71

Post by mistrial9 »

bequanna wrote: post #26
Carrok wrote: post #23

Earlier quoted context omitted.

> 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.

Well, housing needs to mostly be handled by the private sector if we want high quality. Government housing should absolutely exist, but only as a safety net as their management is incredibly inefficient. Private housing isn’t the issue here: collusion is. Collusion should generally not be tolerated in a well regulated capitalist system.

there are massive and documented scandals at the US Federal level with the departments assigned to regulate and serve those markets (HUD etc).. an easy and relevant start is the Savings and Loan collapse of the 80s, directly on top of mortgage monies

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

#72

Post by kelnos »

Manuel_D wrote: post #25
Carrok wrote: post #23

Earlier quoted context omitted.

> 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.

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…

> 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.

Not sure what "price controls" you're talking about, but the reason it's expensive to build in SF (which reduces the appeal for builders) is zoning, the byzantine planning process, the ability of local residents to effectively block or delay projects, and weaponized environmental review.

> Do you want to invest tens of millions of dollars into building an apartment with zero expectations of making a return?

Building housing doesn't need to be an investment opportunity. In a better world, I'm sure there would be plenty of people who would be happy to build housing with only enough profit to pay employees a comfortable wage. These sorts of people don't have the ability to break into the industry, though.

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

#73

Post by legitster »

alpha_squared wrote: post #58
legitster wrote: post #43

Earlier quoted context omitted.

[flagged]

I'm not sure I understand what politics have to do with this. Housing is essential. It's "politically charged" because of the lack of affordability. Part of that is due to lack of building and now, evidently, part of that is due to price-fixing.

But as evidence of price fixing, people claiming to get sellers the best possible price isn't a smoking gun in any other market - essential or not.

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

#74

Post by Carrok »

Manuel_D wrote: post #68
raincom wrote: post #54

Earlier quoted context omitted.

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 woul…

> Wouldn't everyone just rent from the small landlords while the corporate apartments stay vacant?

If there was enough supply, they absolutely would.

> They're are usually renting much nicer buildings with amenities like air conditioning, parcel delivery rooms, gated parking, etc.

It sure sounds like you've never rented. This is, in the vast majority of cases, not reality.

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

#75

Post by toomuchtodo »

Manuel_D wrote: post #62
toomuchtodo wrote: post #53

Earlier quoted context omitted.

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…

Dynamic price control of rents to prevent them from accelerating beyond what wages can support (existing tenants win vs potential new market entrants, them the breaks when supply is catching up to demand or cannot meet demand), tenant rights with strong local regulatory oversight, government incentives to encourage a diverse ecosystem of suppliers bringing new supply onto the market based on forecasted market demand (cost of capital, regulatory streamlining support, construction labor pipeline, etc), upzoning whenever possible to encourage density as much as reasonable.

Supplier diversity is needed to prevent use of market power to restrict new supply coming online to hold rents higher than they otherwise would be (strong evidence homebuilders are doing this current state, restricting supply to juice profitability). The rest should be self explanatory. As you said, there is no silver bullet; it is various policy measures working in concert to attempt to arrive at a desired outcome. I am not anti profits, I am anti "gouge the human for basic needs for profits."

TLDR Some profits? Okay. Too much profit? Not okay. People living in constant fear of not having a home? Not okay. Build, build, build.

(am a landlord myself, do not raise rents unless actual costs go up, reduce rents when needed by tenants, keep my profits reasonable [~%6-%10], usually no more than $100/month/door)

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

#76

Post by kelnos »

Manuel_D wrote: post #68
raincom wrote: post #54

Earlier quoted context omitted.

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 woul…

Because there's a shortage of units overall. All units get rented; the corporate landlords just make more profit, and a lot of people are priced out of the market, including many existing residents.

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

#77

Post by kerkeslager »

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]

> If this was a market for a less politically charged product than housing, would the quotes be as malicious? Like if this software was used to help people get the best price for their car or their stocks or collectibles?

The answer to this question does not matter.

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

#78

Post by jasode »

kpw94 wrote: post #65
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…

>So it could be argued it's not "private prices"

I added "private prices" as one of the factors because the official DOJ wording in the complaint mentions "nonpublic/confidential/sensitive" prices in 3 different places:

>The complaint alleges that RealPage contracts with competing landlords who agree to share with RealPage nonpublic, competitively sensitive information about their apartment rental rates

>“We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents.

>Landlords agree to share their competitively sensitive data with RealPage in return for pricing recommendations and decisions that are the result of combining and analyzing competitors’ sensitive data. *

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

#80

Post by lawlessone »

legitster wrote: post #39
Carrok wrote: post #23

Earlier quoted context omitted.

> 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.

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.

> it's easier to treat housing overall as a consumer good.

But it doesn't function like that.

Building the house isn't even the part that is the problem. It's land/space and how some people maintain monopolies on those.

A free market might make the materials and construction of a house cheaper. It address that space is limited and that most expensive space is often where there are more jobs.

Post reply on HN