“None of the companies admitted fault or liability. They did, however, agree to stop providing Realpage with their nonpublic data for use as an input in Realpage’s revenue management system’s price recommendations, and to stop using Realpage’s RMS in ways that use competitors’ non-public data to inform pricing recommendations”.
Okay but Realpage has a decade of real pricing data that it can use to continue informing these rental companies and outside of them having extremely hard boundaries in their service this is just going to happen again.
This doesn’t do a whole lot to address the actual issue, and these companies aren’t going to stop colluding over a wrist slap like this.
They absolutely won't stop. They will continue to do this manually - they already do / did. This software just saved them legwork.
And now they are using AI tools to handle the emails related to renting including price negotiation.
There is a non-trivial amount of data science work put into these tools with the explicit goal of keeping rents high and using all available data (ex. your credit score, history at other buildings they own, your payment history, local pricing landscape and tons more) to extract the maximum you're willing to pay.
Virtually all large landlords use them on just about every channel - email, website chat, SMS and even phone now.
This is why we created https://fless.io to level the playing field and bring some of the same tactics to the renter side in addition to saving the emailing / scheduling hassle.
Is there an actual issue? I've seen compelling arguments that places that banned the practice of algorithmic rent setting did not see any appreciable drop in rents. I'm almost convinced the problem is entirely supply side.
Again, landlord is a customer service job. It's developers that build housing, not landlords. Developers have representation landlords don't. After my city passed new tenant laws the city lost ~15k units which increased rents. In response the city asked landlords how to improve the market then proceeded to do nothing with what they were told.
Basically everyone in the US even kind of wealthy or with any political power owns property. When you own property, the best move in your self interest is to not build more property. Many upper-middle-class peoples wealth is held entirely in their property.
There’s basically no political will anywhere to make it easier to build.
In my town the biggest property developers are openly best friends with the county commissioners and planning / zoning board.
And by best friends I don't mean "run in the same circles" but "go on vacation together with their kids", "are in each other's wedding parties", "are godparents to each other's children".
And then they have the audacity to act surprised when the public is pissed that, despite traffic studies showing that there's no road capacity and no room for adding lanes to arterials, despite environmental impact studies about the shoreline showing negative effects, that the commissions sign off on their buddies and their developments without even a hint of hesitation.
There's more housing than people. What's artificially limited is salaries. Higher salaries would mean massive benefits for workers and businesses. And catastrophe for non workers and real estate.
There is not more housing than people in places where people have the highest income. The median income of Sunnyvale is twice that in the US, but the median house is 5x more expensive there.
Higher salaries = everything which is produced by working becomes more expensive. That is not a problem for people who work for a living, because they have higher salaries and can afford it. But it is a problem for those who do not work, because they'll might have to sell their surplus real estate to afford cost of living.
But mainly it is that you would need to remove or decrease benefits for those who do not work in order to have room for higher salaries. That is not a problem for the unemployed because higher salaries means that the only people without work are those who do not want to work. But it is a big problem for those who do not want to work and for example would like to live off their real estate.
The gut reaction to higher salaries is that people would have more money to purchase real estate or pay rent, but I think the downwards effects for real estate are much stronger. And the evidence is that in every country which has seen a period of high salaries for workers, real estate has been cheap during that period for workers to buy.
> And the evidence is that in every country which has seen a period of high salaries for workers, real estate has been cheap during that period for workers to buy.
Real question. Do we have evidence of this from anything except developing economies pulling countries out of poverty? Like a first world country sort of thing. Because to me it seems like higher salaries comes first, and the property would lag for a bit while the market reaches its new level. Does that make sense?
I think that high salaries / increasing salaries is the foundation for an economy developing at all. So cause and effect are reversed from what you mention, if I understood correctly.
High salaries and cheap housing was the reality in I think every first world country when they developed after WWII.
Why would the landlords not raise their rents just like everyone else? When everything is multiplied by the same factor, nothing changes. You might have 2x the salary but if rent and food and everything else is 2x also, your buying power stays the same.
When salaries are high enough, more people can invest in building more housing. So as landlords drive up the prices, the market balances.
But since the wealth gap keeps widening, fewer and fewer workers can afford this, as they get priced out of locations that offer good employment. At the same time the rich keep investing their money into higher-margin industries. Consider that for landlords owning enough housing, building more can have a negative RoI, and they all know that they all know this!
If you don't believe me, think about just how quickly the datacenter boom became reality. All that money was waiting around, and evidently could have been turned into a lot of building activity in a short amount of time.
I don’t think this is really true. It’s naively true if you just look at the number of homeless people vs the number of empty units, but misses:
1. That markets need some portion of empty units for fluidity.
2. That many people aren’t homeless, but living in situations where they would take more housing if it was available. (Living with roommates, ex-partners, family, etc.)
3. Many places simply don’t have enough housing for everyone who wants to live there. If they did, people would move from other places.
You know, this is actual economic orthodoxy. The government is supposed to stimulate the productive economy (the part that's not rent-seeking like landlords) by causing inflation by overpaying it's employees (and hire). Which then forces private employers to pay more and causes high inflation. Why? This haircuts existing debts, both public and private and is very bad for rent-seeking, and good for anyone productive (making money).
Of course, that also shows the problem: it haircuts pensions as well, since they are a large part of the rent seeking class.
There are other good reasons to have a reasonable amount of inflation.
If inflation is too low or doesn’t exist, then there’s less incentive to do anything with your money. If I have bunch a money that I don’t need to spend immediately, and I just want to keep it secure, why would I not keep it in a safe or non-investment account if it’s not losing value over time? What’s my incentive to risk it by lending it out to someone else?
Sure, I could say that my incentive is the interest rate, but my alternative is zero risk. Inflation turns “zero risk” into being more like a certainty of slow value loss, so that holders of capital are incentivized to do something at least minimally risky with that money (e.g., lend it to the government in the form of treasury bonds or deposit it into an insured bank account).
Debt has something of a bad reputation and obviously it can be overused and abused, but it’s also something that helps the efficiency of economies. It maximizes the amount of money actively participating in the economy rather than sitting.
> Sure, I could say that my incentive is the interest rate, but my alternative is zero risk.
The risk of missed purchases isn't zero and the risk of missing investment profits isn't zero either. From motivational point of view, inflation and deflation aren't different, they're the same thing in a mirror image.
Deflation is rare as hen's teeth, harmless and extremely easy to fix. Inflation, on the other hand, is the most corrupt economic phenomenon by far, it's hard to fix and it has ruined numerous economies, caused wars, destruction and famines.
> Debt has something of a bad reputation and obviously it can be overused and abused, but it’s also something that helps the efficiency of economies.
This is a strawman, nobody said debt as such was bad. However, since you started, let me correct you - as it is, debt not only "can be overused and abused" - it is routinely abused and overused and inflation is a huge part of it.
> Inflation, on the other hand, is the most corrupt economic phenomenon by far, it's hard to fix and it has ruined numerous economies, caused wars, destruction and famines.
Could you explain? If you work. You're not renting. You're not on a pension. You're not ... then what is bad about inflation?
Work or no work doesn't matter, inflation steals everyone's savings, wages grow slower than inflation - so they get stolen too, it causes a run on assets, feeds on itself and feeds corruption-driven bubbles, the funds extracted via inflation lead to monopolization and oligarchy-zation, inflation can be used to install Hitlers and manipulate elections, the list goes on.
> You're not renting. You're not on a pension. You're not...
Right, if you're not living, inflation doesn't matter, in all other cases it does. I don't know what you are talking about here or rather, I know that you don't know what you're talking about.
It's crystal clear that you have no idea what the role of banks in the economy is and what it's supposed to be. Without that understanding you're going to keep presenting pompously mysterious arguments which are nonsensical even by the low-bar measure of mainstream economics. I cannot type a whole econ 101 course here, you're supposed to figure out on your own why we have banks, how they work and what they're supposed to achieve.
> Work or no work doesn't matter, inflation steals everyone's savings ...
Luckily working people's savings are essentially nothing and you have a wage. Which means it won't affect poor working people. But yes it will destroy savings, which is why it hurts rich people and doesn't hurt poor people: the rich have savings you and I don't have. The rich have savings the state does not have.
Wages grow slower than inflation - that's the point, the government would shortcut this by overpaying, so that wages would grow at the pace or even faster than inflation.
> to keep presenting pompously mysterious arguments which are nonsensical even by the low-bar measure of mainstream economics ...
Still have my original (1970) economics textbook. This is what it says should be done. Explicitly raising inflation to 10% or so helps poor people by destroying their debt, and it hurts every kind of savings in the economy, which is why rich people don't want it. It equalizes everyone.
Besides I don't understand why you're even making this argument. Neither the US nor EU governments will balance the budget. Both are ~4 years off from the point where they will need to pay back more than they can lend, in other words, the point where NOT having something like 10% inflation will directly hurt their budget. And then they'll do what every big organization does when hit in the budget: do whatever to increase inflation. And if the government tried to cause inflation ... it's easy. Very, very easy.
In other words: you can't stop it. I can't stop it. One of 2 things will happen: either governments balance their budgets NOW or 10% inflation will happen. Since the idea of a balanced budget is laughable, that only leaves option 2.
> Luckily working people's savings are essentially nothing and you have a wage.
Lucky them, due to inflation constantly eroding their incomes, they can't save. I repeat, wage growth trails inflation, see housing and everything else.
> Which means it won't affect poor working people.
Untrue, as I've explained twice already.
> But yes it will destroy savings, which is why it hurts rich people and doesn't hurt poor people: the rich have savings you and I don't have. The rich have savings the state does not have.
Untrue, rich people don't have savings, they have properties and investments, inflation is how they acquire more of them, the poor are forced to sell cheap to survive, the rich swallow it all.
> Explicitly raising inflation to 10% or so helps poor people by destroying their debt,
More falsehoods from you - poor people, poor on collateral, borrow small amounts all the time, think payday loans at rates rising with inflation and several times higher than the rates for the rich - inflation does help the rich who borrow large sums at long intervals but it doesn't help the poor at all, for them, it's more inflation -> more wage erosion -> more (and more expensive) debt. You can't outrun your shadow, do you understand?
> and it hurts every kind of savings in the economy
It doesn't hurt the assets of the rich because they appreciate faster than inflation, especially if you include their siphoning of more assets due to the financially depressed poor.
> which is why rich people don't want it. It equalizes everyone.
The falsehoods are getting out of hand. The rich have vastly more debt than the poor, they borrow against their appreciating assets at vastly better interest rates and longer terms, so the more inflation - the less they repay, they love inflation more than anything, it makes them richer. If you're incapable of understanding my words, hear an authority with experience - by Trump's words: "Inflation made me very rich"
> Still have my original (1970) economics textbook.
Shoddy econ books are a dime a dozen. Give me the author and title, I love to make fun of sloppy econ books, there are so many of them, so much fun.
> Besides I don't understand why you're even making this argument... You can't stop it
Finally a sensible argument, kinda, as much as inevitability can be an argument. However, I'm not trying to stop inflation, I'm analyzing its systemic origins with an eye on systemic fixes. If it can't be stopped this time around, we should not allow it to happen again. Besides, I want to explore all options.
> I repeat, wage growth trails inflation, see housing and everything else.
Seriously? I mean first of all you must see that on a large timeframe this claim is beyond bullshit. Economists claim that essentially from the beginning of time until 1972, and for a lot of people more like 1990, wages grew faster than inflation. Probably since before the Ziggurats went up.
Second you must understand this can be shortcut. If the government explicitly hires and raises wages, obviously it determines 100% by itself if wages trail inflation or not.
> Untrue, rich people don't have savings, they have properties and investments
No they don't. Look at some properties and check if this is true. Rich people only really directly own private houses and only a few. And the superrich ... maybe a dozen. But that's it. All properties are financial constructions because of the massive liquidity advantages that has: Let's say you're rich, and you need money. If you own a shopping mall, you're screwed. But if the shopping mall is constructed using debt and you get 8% interest on that debt. First, it can be divided amongst ... anyone you like really. Second you can sell 1%, 10%, ... whatever you want to raise money. Or you can have them buy out the debt. Or ... The ability to raise money, to control where money goes is what really makes someone rich, it's what high middle class "climbers" don't have. Most properties work like companies do, except much more debt much less equity. One superrich who (has to) be pretty public with what he owns and how it's structured is the king of England. And while due to his special tax situation it is not 100% typical, it's still very instructive. So look at how it works. He owns companies (just because it's called "duchy of ..." or something like that doesn't mean it's not a company), and they own massive debt in properties that others manage for him.
> More falsehoods from you - poor people, poor on collateral, borrow small amounts all the time ...
There are TWO sides to debt. The person who borrows, and the person who lends money and gets the interest. If you have large inflation, on BOTH sides the numbers "go down" (compared to wages, because wages go up, loan amount don't)
The rest is making the same mistake as you keep making here. High inflation provides a (partial) reset. Existing loans become much easier to pay for, and worth much less. Poor people pay. Rich people receive the interest. Both become less compared to wages. Obviously this helps the poor and fucks over the rich.
But housing supply is not constrained. There is more housing than people.
You could build as much more housing as you want, but if those houses only become accessible to purchase for those who already own real estate instead of for those who work, then nothing will change.
If it's causally linked to higher prices, I agree. My question is whether we certainly know it's causally linked. In my mind right now it's similarly plausible that these things are just snake oil sold to landlords. There are a ton of conspiracy theories that would be a real problem, if true.
Landlords have an inherent trade off between holding out for a tenant who would pay a higher rent and not having the unit vacant in the meantime. Holding out for longer than that helps the other landlords at your expense. Meanwhile there are a large number of landlords, there is no way for the ones using a given system to force the others to do the same, and a significant percentage of them don't.
So if the system tells the landlords using it to do the thing that would increase rents if every landlord was using it, the "defectors" who don't use the system win out over anyone using it, which means using the system rather than defecting would cause you to lose money and everyone would have the incentive to defect.
Whereas if all the system is doing is suggesting the optimal point in the trade off between holding out for a higher paying tenant and renting the unit sooner, without assuming the other landlords are being required to use the same system, that's the same thing an individual landlord would do if they're not colluding.
The actual way landlords collude is through zoning boards, because then they have an enforcement mechanism, i.e. if someone is trying to defect by adding new units to alleviate the limited supply then the other landlords can sic the government on them, having passed the various laws against constructing those units there.
Using data feed to guide pricing and set initial figures: legal.
Agreeing, either implicitly or explicitly, to let the pricing data feed set the price floor: collusion.
Leaving units unsold and refusing to lower the price despite insufficient demand: usually a bad business decision, possibly indicator of a market failure.
Leaving units unsold to maintain agreed-upon price floor despite insufficient demand: collusion, market manipulation. Congratulations, you are a cartel.
You're assuming they were the first kind of fools rather than the second kind.
> Leaving units unsold to maintain agreed-upon price floor despite insufficient demand: collusion, market manipulation. Congratulations, you are a cartel.
Which is the thing that doesn't work when many other landlords aren't in on it, because then they get to fill their vacancies while you're stuck with the empty units.
Notice also that antitrust prohibits attempts to monopolize. Fools are quite capable of doing something which is still a violation of antitrust laws despite being ineffective and unprofitable.
Homeowners are usually the ones who don’t want more building, not amorphous landlords who have very little control over zoning and permitting in a place like the Bay Area.
Homeowners and landlords don't want more building for exactly the same reason: They own property there and consequently want it to become more scarce so the price of their asset goes up at the expense of tenants and new homeowners.
In general the homeowners are more numerous but the landlords are somewhat more organized.
The homeowners are also being taken for a ride, because less restrictive zoning reduces the value of units (since you can increase the supply of them) while increasing the value of each piece of land (since you can now build more units on it). And the homeowners (and small landlords) are typically the ones with a high ratio of land to units, but they get hornswoggled into demanding the thing that really benefits the corporate landlords who own the existing high density buildings.
There is no price fixing. They just enabled landlords to find out how high the market price actually was when they didn't know it before due to it being a very opaque market.
The market price is the price for which people are renting places based on market forces.
If the only market forces are landlords keeping half of their units empty so they can keep $1400 units priced at $2400 because that’s what the software (and indeed service) are pushing them to do, that’s price fixing.
There’s extra steps, it’s a new form, but the price is fixed, and the point of allowing housing to be built isn’t being fulfilled.
Math failure here. If you keep half your $1400 units off the market and get $2400 for the others you are losing $400 per unit. Also there is zero evidence any landlords were doing this.
I’m speculating the price would be closer to $1,400 per unit.
The price across this hypothetical town is $2,400 per unit (let’s say it’s a 2 bed 2 bath apartment), “suggested”/set by RealPage software.
Because that’s how using their product worked.
Half of them sit empty because their business model doesn’t care (tax deductions on other income, while still increasing total assets in their portfolio).
There is…a good amount of evidence of landlords doing this, and how:
these landlords coordinated through a variety of means, including:
Directly communicating with competitors’ senior managers about rents, occupancy, and other competitively sensitive topics. In one example, Greystar supplied Camden with information not only about very recent renewal rates, but also its approach to pricing for the upcoming quarter, its acceptance of RealPage’s pricing recommendations, use of concessions and competitively sensitive information about occupancy. Likewise, executives at Camden and LivCor communicated over the course of months about their pricing strategies, including plans for certain price increases.
Regularly conducting “call arounds.” During these discussions, euphemistically referred to as “market surveys,” property managers called or emailed competitors to share, and sometimes discuss, competitively sensitive information about rents, occupancy, pricing strategies and discounts.
Participating in “user groups” hosted by RealPage. For instance, landlords discussed via user groups how to modify the software’s pricing methodology, as well as their own pricing strategies. In one example, LivCor and Willow Bridge executives participated in a user group discussion of plans for renewal increases, concessions and acceptance rates of RealPage rent recommendations.
Sharing information with competitors about parameters in RealPage’s software. As an example, at the request of Willow Bridge’s director of revenue management, Greystar’s director of revenue management supplied its standard auto-accept parameters for RealPage’s software, including the daily and weekly limits and the days of the week for which Greystar used “auto-accept.”
"Half of them sit empty because their business model doesn’t care"
What kind of insanity is this? Your entire argument is based on landlords not caring about occupancy, when that is actually the number one thing they care about. You obviously have no idea how any of this works and your linked source does not say a damn thing about landlords intentionally leaving units vacant.
Good news: proving illegal collusion didn’t require proving intentional vacancies.
The evidence for that, if you want it, is as easy as opening the 5 newest developments in any major metro, and see how many units are available, despite masses of families constantly looking. It’s kind of appalling.
>Except you can write off those $1400 units as $2400 of losses that will offset profits
No, the IRS doesn't allow tax deductions for the "missing $2400 rents" of unrented units. IRS only allows deducting ongoing expenses such as "maintenance, insurance, taxes, and interest," :
Instead of writing off "unearned revenue," structuring arranges the transaction so that the cost of unoccupied units is treated as a fully deductible operational business expense.
The most common legal vehicle is a Master Lease Agreement, where a single corporate tenant (the Master Tenant) leases an entire block of units or a whole building from the landlord for a fixed monthly sum, taking on the responsibility to sublease individual units.
Splitting your operations into operating companies and property-holding companies furthers this.
Basically when somebody makes a pricing error on a decentralized cryptocurrency exchange there's a mob of automated arbitrage bots that try to trade against it. Who wins and actually gets to make the trade is mainly determined by how high of a transaction fee your bot is willing to pay.
You can win instantly by offering to trade with a transaction fee so high it almost wipes out all but a cent or two of the entire arbitrage profits, because nobody else will pay a higher fee.
Instead what happens is bots offer the lowest possible fee, then immediately increase their fee as soon as they see a competing bot try to take the trade with a higher fee. This results in the bot offering the highest fee changing every several milliseconds as the fee quickly grows.
The way Ethereum mining works, this results in the winning bot being randomly selected from among the set of bots "bidding" up the transaction fee: blocks are mined at random intervals of iirc about 20 seconds, and whoever had the highest bid at the time the next block is mined wins. <20 seconds of bidding is short enough that even with the bidding, the transaction fee doesn't get bid up particularly high, and the winner makes out with a highly profitable arbitrage trade.
By giving up a guaranteed win and instead rolling the dice against other bots, transaction fees stay low and everyone has a higher expected profit. It's coordination that happens without any communication between the participants and quite possibly the participants didn't realize they were in effect cooperating when they added the high speed bidding behavior to their bots.
> You can win instantly by offering to trade with a transaction fee so high it almost wipes out all but a cent or two of the entire arbitrage profits, because nobody else will pay a higher fee
This is like 1980s sawtooth algos in real finance.
A lot of crypto is former HF folks taking old strategies to a dumber field.
I have really enjoyed watching crypto act like they are white knights against the evil traditional financial system and then go on to reinvent it piece by piece.
The current players in crypto are the same people. And there’s noting systematic about crypto that changes this — people with money can afford to buy more mining capacity or stake more coins.
Yes, incumbents warped the original intentions, it's true. Famously, Bitcoin was coopted and the originally intended functionality only lived on in the Bitcoin Cash fork. Cryptocurrency was supposed to be a way to transact without touching the banking system, but banksters realized that it could be an unregulated vehicle for their financial shenanigans. I don't know how you might have guarded against that sort of attack - capitalism being about commodification at a fundamental level - but, "It was always a fox house!" is incorrect.
There is something evil, however, about scaremongering around fractions of a penny to convince folks to move money to one where the spread is several percent.
That isnt cooperation. That is basic market principals in action. Bid and counter bids that whittle down the profit margin based on willingness to risk a win/loss? These are auction principals as old as time. This is reaction rather than cooperation.
The winner of the auction is not based on "willingness to risk a win/loss". The auction always ends at an absurdly low price because of the mechanics of the bidding, none of the participants ever drop out, because the price never goes above what they're willing to pay. Please read my comment or the paper again, this is not like an ebay auction at all.
For example, imagine a car auction that lasts only 20 seconds, with a random delay of up to 1 second, and with a very small minimum bid increment, say 2 cents, and no bidding fee or limit on number of bids. Now image 5 different people each outbidding each other by the minimum bid increment every 10 milliseconds. The price will climb by about $2/second, so by the end of auction, the winner will get the car for $40. Because everyone's bidding so fast, and nobody knows exactly when the auction will end, the winner is effectively random. At least on an expected value basis, this is highly beneficial to the participants vs actually bidding up to the true price of the car until other participants are not willing to bid anymore.
They got a wrist slap because the case was flimsy and probably wouldn't stand up in court. This looks nothing like price fixing and everything like price discovery in an undersupplied market, and the people bringing the case are the same government responsible for the actual problem.
The software literally includes an algorithm that says "this week, you will set the rate for this apartment at $X" based on RP's data.
And, if you want to deviate from that, without being kicked off RP and losing your substantial fee payments, you will follow that rate (and they tell you that they _will_ check), or you can "request an override" from RealPage, that they may allow or deny at their discretion (and RP agents are formally trained that override approvals may not exceed 5% of requests).
> Consistent with their agreement to impose rents generated by RealPage RM Software nearly all the time, Defendants agreed to limit overrides. For example, a RealPage LRO training document states: “Overrides should be few and far between.” Similarly, internal RealPage LRO training documents teach cartel members’ regional managers to beware of “Override Overload” or “rogue” leasing agents who too frequently override the LRO-generated pricing.
> An internal presentation created by Defendant Greystar explicitly
acknowledges that RealPage RM Software users should each seek to accept at
least 95% of the RealPage-generated prices, emphasizing that “Discipline [o]f
using revenue management increases more consistent outcomes.”
> Former Greystar employees have similarly confirmed that negotiating rents other than those set by the RealPage RM Software was unacceptable.
> Even where Participating Landlords do not enable auto-accept, most landlords cannot, on their own, charge rents other than those generated by RealPage’s RM Software— landlords can only “propose an override.” The landlord must then provide a written business justification for why they wish to depart from the RealPage-generated rent.
"Not price fixing", huh?
Just to reiterate that training presentation:
> Discipline [o]f using revenue management increases more consistent outcomes.
AUTOMATIC PRICE UPDATES
New pricing information automatically pushes to marketing website and ILS listings in real time.
During a six month study with an Entrata client using Entrata Pricing, market rents grew 15% more than a comparable set of properties within the same company.
ProPublica's reporting showed the problem to be so obvious and egregious that authorities had to publicly move against RP. However, rental rates are what form the backbone of property valuations that landlords borrow against, or for REITs. I suspect that there's no real political will to go after this clearly-widespread fraud because it would have deep ramifications for the financial system at-large. If rents fall substantially, so do property valuations, which blows up many financial positions. No one involved in the lawsuits is personally connected to affected renters; many are connected to affected landlords, or else to people who are heavily-invested in general. None of these people want asset prices to drop.
How it works in Victoria, Australia is for renewing an existing lease is you must provide examples of comparable rentals in the area at or above the price you are proposing. And the tenant can dispute with their own comparable if they believe the price is wrong. New listings can be listed at any price.
There is enough turnover with new listings to find the market rate while preventing existing tenants from being screwed over by unreasonable prices.
Australia also almost entirely works off rentals owned by individuals who own 1-3 properties rather than corporate owners so no one landlord has any sway over the market.
Most landlords arent big corporate in the USA either especially in areas where the housing crisis is the worst.
I think this narrative is just meant to distract people from questioning the necessity of the landlord class, they want people angry at a faceless corporate boogieman instead of local landlords (for obvious reasons)
The "mom and pop" landlord who owns a few houses is much less likely to keep a property vacant to support higher rents. They have taxes, insurance, and probably debt to pay off. They need cash flow; they'll be more likely to cut their rent a bit to get a tenant.
Show me the math where a large landlord can make money by keeping apartments intentionally vacant. Corporate landlords have no less need for cash flow than mom and pop landlords.
The cost of holding apartments intentionally vacant is large, and has a very tiny effect on pricing unless there's a single player with more market share than exists anywhere I have seen in the US.
In a different arena, parking, it's widely accepted that the best possible way to establish adequate parking is to set prices high enough that there's always a spot available. Anything less results in people not being able to park. Setting apartment prices similarly is beneficial to the public, in that there's always a place to move into.
We need apartment vacancies, they are beneficial to renters, because people need to find housing at all times. Ideally we have a surplus of apartments so that not only do renters have choices but so that prices fall to the cost of providing housing.
That's basically a listing search page that allows you to sort by price.
What else do you expect "collective bargaining" to do in a market where every tenant has a different landlord? Your landlord isn't going to care if the tenants of 10,000 other landlords threaten to move out. They only care if you threaten to move out, and then to credibly do that what you need is to show them the unit you could move into which is asking for less.
The real problem is that you need the unit you can threaten to move into to first exist, rather than its construction being inhibited by zoning etc.
> Collective bargaining your landlord can't ignore is you and your neighbors all withholding your rent payments until your leases are renegotiated.
How is that collective bargaining when your neighbors have different landlords?
All you're suggesting is to stop paying rent, which anybody can do on their own, with the usual consequences of your credit getting ruined and then the landlord serves you an eviction notice and changes the locks.
Consider the economics of what you're suggesting. Your unit costs $800k when it should cost $200k because of artificial scarcity (zoning), so then the landlord has to pay $800k for it and charge rents high enough to pay back that loan. The way you fix that is by getting the cost of the unit back down to where it should be, i.e. building more units to alleviate the scarcity.
Demanding that the landlords charge less without reducing what they have to pay for the building doesn't work, because then who is going to sink $800k to build a new rental unit? Who is going to keep renting out their existing units at a loss instead of turning them into condos or similar? Which then makes the scarcity of rental units worse and causes rents to go up.
You can't solve a supply problem by bargaining with someone the law still effectively prohibits from increasing supply.
There is such a thing as a Tenant Union, and in fact they are currently spreading across the country as renters turn to collective bargaining. It works!
We have something similar in Spain, except instead of "comparable rentals in the area" there is a index (called IRAV (Índice de Referencia de los Alquileres)) maintained by the government each year, which limits how much rents can be increased. My landlord just reference that each year, it's easy for me to check if it's right, then that's it. For the areas where supply is limited ("áreas tensionadas"), as some areas like Barcelona is geographically limited to expansion, there is a total limit as well, independent of the IRAV.
Of course, if there are improvements in the rental, you can go beyond the index as the property been "improved", but it's really handy to know each year that it's limited and the exact amount. For 2026 it's locked to 2.14% for example, for everyone.
The prices should be delayed two months. The rate at which pricing information propagates dictates how much of the rental pricing mass (number of owners * average units owned) gets thrown around how quickly. I don't have a number, but something like 2 months. Treat this data as if it was a vile of Devil's venom [1]. If they setup back channel information sharing networks, or collusion networks of any kind. <bad thing happens, not just a fee>
Second, the historical database should be deleted. And if they can't survive that, so be it. Keeping the spoils of crime should be the crime. Justice still isn't finished.
By what mechanism do the producers keep prices high if the "lots of competition" is constantly undercutting them and adding new supply to replace anything the colluding subset tries to withhold from the market?
Cost cutting while shopping for expendable commodities does not result in a long term drop in quality of life in the same way that cost cutting while selecting your residence could.
The existing price is high not because it should cost that much to create a new unit. It's because you're only allowed to put one unit on a particular plot of land, which makes the land cost per unit 10x as high as building 10 units there. Adding more units doesn't require you to use lower quality materials or similar, it just requires you to actually build them.
Apartment landlords don't undercut each other. They raise rents in lockstep and then offer "specials" like a month off (amortized) that lower initial out-of-pocket costs without affecting the base rent, which gets raised on subsequent lease renewals to make up the difference. The only option to avoid this is moving every year (instability being clearly great for community /s) since corporate landlords will not negotiate rates.
This is trivial to empirically disprove. Look at the listings for similar units in an arbitrary city. Are they all exactly the same price? No, and then the landlord who offers the lower price for an otherwise equivalent unit fills their vacancy sooner.
> They raise rents in lockstep and then offer "specials" like a month off (amortized) that lower initial out-of-pocket costs without affecting the base rent, which gets raised on subsequent lease renewals to make up the difference.
These are obviously gimmicks, but who is requiring you to fall for them? If you're planning to stay somewhere for a long time then look at the base rent and the length of the lease. Let the landlords offering "specials" and short lease terms get taken advantage of by the tenants who know they're going to be moving in a year anyway.
> The only option to avoid this is moving every year (instability being clearly great for community /s) since corporate landlords will not negotiate rates.
An obvious option to avoid this is to avoid corporate landlords. Most rental properties are owned by a "corporation" in the sense that it's an LLC for liability reasons, but that doesn't mean the ones owned by an individual who lives in the same city and has fewer units than you can count on one hand behave the same way as the ones owned by some private equity schmucks, and there are lots of the former.
Also, who wants to rent the same unit for 30 years? Renting should be for people who haven't saved a down payment yet and people who are planning to move soon. When we're seeing people in middle age who want to stay in the same place but still can't afford to buy anything there, we need to be doing something about the unaffordability of buying rather than accepting the premise that we're going to continue screwing them into needing to rent.
There's been an assertion of a "body of literature" but no pointers to it, no assessment of the data quality, no assessment of the validity of the interpretations, etc.
There are entire bodies of literature based on zero evidence, due to epistemic doubt about evidence as grounds. For example, critical geography actively rejects basing their body of literature on evidence, and reaches conclusions about gentrification and displacement and housing production that are quite contrary to both the evidence and standard economic theory. Yet the work of critical geographers is endemic in public policy around urban planning and political debates on housing production in urban areas.
I would agree in general that theory must change to match the evidence, but again, what evidence is at play in any of this thread?
The evidence is completely in accordance with the theory.
The theory says that new units are added when prices are high and building new units is practical. Building new units is inhibited, therefore prices go up, exactly according to the theory.
The problem isn't the theory, it's the inhibiting of adding more units.
Is this not almost exactly what you get on apartments.com or zillow.com by just looking at the listed prices in an area?
I think you might have the problem backwards. Realpage was about buyer collusion, and that wouldn't look any different from the prices naturally just rising in a market with more demand/less supply because even sellers who aren't colluding would still raise their prices if they saw that that was the going rate in the area.
When there are multiple competing factors all influencing price simultaneously it's very hard to accurately determine how much any particular factor contributed, or what the "actual price" would have been without them.
This is actually essentially the problem that justifies markets as an efficient way to arrive at fair prices - it's computationally too expensive to calculate the precise supply/demand ratios at any given moment, and demand can change much faster than supply can adjust (and nobody could ever really know how elastic demand is for things like local housing markets anyway).
So sellers want to respond to changes in demand by raising prices, because the business model of housing rentals is matching short term demand/pricing/risk to long term costs/costs/risk. But every buyer has their own demand preferences and every supplier has a different product with different fixed costs, and everybody knows their own demand preference and ability to provide supply, so the aggregate price a market settles at "collapses" all that information without explicit coordination: https://en.wikipedia.org/wiki/Economic_calculation_problem
If there truly is an increase in demand, as a buyer you probably do want rents to increase, because otherwise you get shortages like in Berlin where there is nothing to rent. So that's why coordinating to withold inventory with other sellers is bad, it creates a shortage anyway and only a small number of participants need to do it to move the entire market
Those sources are tainted. There is an epidemic of fake listings on websites where once you call to inquire, it turns to a bait and switch where they say the fake apartment is no longer available and tell you "what else" they have instead.
It's not only fakes - there is always a very large gap between what is available and what is listed online in honest buildings. Humans not marking move-outs or lease signings in realtime always creates a gap as do move-in dates. Buildings tend to only list what's available until the end of the month not 60 or 90 days out when you may actually want to move.
The best solution is to contact the building but this is time intensive and you get a lot of spammy followup which is why we created https://fless.io to automate this process and help you find what is actually available and not just what zillow or the management company's website lists. It's still the best way to know what is truly available.
No, those are advertised prices, not actual prices.
Look at the difference in prices between recent home sales and listed home prices, it's exactly the sort of information differential I'm talking about.
The US protects its homeowners above all, which is why there are these public databases of true sale prices of real estate. Renters should have the same protections and information too.
But, those... are the actual bid and asks for the home that you were able to verify yourself online, because it's public data?
It's not very common for residential rental agreements to differ substantially from the listed price in the US. It is quite common for long time tenants to pay a different (usually much lower) rate than new listings (often as a result of government regulation or just people being nice to each other).
What realpage did that was illegal was suggest coordinated pricing/inventory management to their customers through their software.
What exactly are you expecting to uncover by knowing what people are paying for rent? I actually have nothing against that in principle. I just don't understand how that establishes any kind of evidence that somebody is doing something wrong.
Should rentals be seen as economic opportunities for hyper efficiencies? IE should the market be structured to extract the maximum profit from renters?
Not clear to me that is the right approach, or if owning rentals should be more of a fixed income approach (or even speculative - profits only come from the sale of the property).
The general premise of the rental market is that if rents are high, the profits from building new rental units will justify the construction costs and then new units will be added until the rents go down, i.e. until it stops being profitable to add more.
This actually works unless you inhibit the construction of new units. Naturally that's what we've been doing, which is why it isn't working. But the solution is to stop inhibiting the construction of new units.
Because the alternatives don't actually work. Unless you can build enough units to meet demand, there aren't enough units. Which means you either have high prices which suppress demand because people who can't afford them are forced out, or shortages because you're imposing some inadvisable price controls and then instead of being unable to get a unit because you can't afford the rent, you can't get a unit because they're all occupied and no one is adding more.
Seattle has more problems than that. They recently lost an illegal takings case where they used the scorpion and frog defense -- You should have known we'd apply additional affordable housing conditions that make your venture unprofitable.
Al la dc rent registry, which I always thought was ironic because doesn’t this create a database where landlords can consider prices based on others… but I guess it would be public in this case.
Well the point of market based interventions and government regulations like this is primarily to reduce information asymmetry. You still ultimately need to increase supply or reduce demand to move price.
Depends on the rate of information update and how long the records are retained for. High frequency updates create a higher fidelity information channel.
I don’t see why rental agreements can’t be registered with the county like house sales are. It would also eliminate the need for squatter laws, as it would be trivial for police to pull up the county website and see who belongs in the home.
Americans are too privacy focused to accept this, but I could easily see a cottage industry of "registered agents" popping up around it who sign leases on behalf of individuals and shield them from public scrutiny.
Alternatively we could keep the names private. A cryptographic solution would easily serve the need of authorities verifying the right person is in a place without identification, but good luck figuring out how to ensure the tenant has their keys somehow since in the US there are zero pieces of identification you can ensure every citizen has.
American's seem to only care about privacy from the government, but wanting privacy from trillion dollar corporations? They keep the stock market high and provide value to their major investors and everyone's retirement accounts so obviously its fully within their rights to spy on us 24/7. /s
The fact that the number of houses owned by large corporations is so low as to be insignificant shows that it’s basically 0% of the cause. (I’m assuming you’re not against a landlord who owns a small number of properties forming an LLC, but mean companies that rent lots of properties.)
It is a supply issue caused by local building codes and zoning. Full stop. Everything else is just pretending to do something about the problem, and corporations are just scapegoats.
> It is a supply issue caused by local building codes and zoning. Full stop.
But RealPage isn't a supply issue? It's easy to price gouge consumers because housing is inelastic. And the fine they got is a slap on the wrist!
Price gouging is more widespread than one isolated price fixing case. It's easy to achieve in an inelastic market. As one example, moving costs money so rentiers can raise rents as long as there is a switching cost to moving. Deregulation doesn't address the fundamental inelasticity of the housing market.
Your comment also seems to be oblivious to the role that interest rates play. Mortgages are not corporate-owned in the sense of the parent comment, but mortgages are a cash flow from home owners to corporate financiers - a cash flow from the working class to the wealthy. ZIRP led to high prices; with rising rates, homeowners are incentivized to hold on to their properties rather than move. These are issues of macroeconomic finance and wealth disparity, not "building codes and zoning".
While you're right that the parent's comment of corporate ownership of houses is off base, multi-family housing is majority corporate owned. Multi-family housing is a huge portion of the housing market, particularly in cities where prices are highest. Corporations aren't "just scapegoats" here either - they are parasitizing cash flow from workers here as well. Corporate profits is where the money in high housing prices ultimately goes.
There is a reason billionaires astroturf YIMBYism. It's precisely because it doesn't threaten their class interests.
Can’t see through the paywall. Entered my email but never got the code. But I’m guessing we’re talking semantics here. OP used the word corporation, but that doesn’t really make sense since nearly anyone renting out a place is forming an LLC.
“Investor” still doesn’t mean a large corporation, I’m guessing this article is saying that a good chunk of rental homes are owned by people who own more than one, but most of them still don’t own a lot.
You have over-simplified "ownership" into a thing that doesn't exist. Most Americans "own" their house in a complicated relationship between themselves, individually or jointly or as a family trust, and one of several monstrous global financial firms, each of which holds part of the interest.
AIUI LLCs for rental properties have very little protective power in court, and are easily shredded by plaintiffs' attorneys. If you thought that you were getting some degree of legal protection from holding your small multifamily in an LLC- you're probably not.
For example- do you have a mortgage? Almost certainly in your name, you have to be very large to receive a mortgage as a corporation. If you're holding a property in an LLC but the mortgage in your name, that's classic piercing the corporate veil and will take an attorney about 10 minutes to shred that in court
Why? Same cash flow it just goes to mortgage you own instead of landlords mortgage + their profit margin. It would actually be cheaper for current renters because of this.
I filed my claim, and based on their calculator this might be the most serious check from a class action (assuming I get the full amount). For me its ~1.5k between 3 named landlords.
I've been saying this for a while, but there is a cottage industry like RealPage in pretty much every industry. These companies need to be slammed out of existence for anti-competitive pricing and collusion. So much corruption. I'm so sick of fraud and corruption.
AUTOMATIC PRICE UPDATES
New pricing information automatically pushes to marketing website and ILS listings in real time.
During a six month study with an Entrata client using Entrata Pricing, market rents grew 15% more than a comparable set of properties within the same company.
Their marketing documents admitted to the exact same behavior.
No one cared about those of us hurt by this company to even bother filing a lawsuit against them.
I had a plumber over to quote a HVAC replacement, while he was working up the quote I saw his iPad where his was inputting the equipment for costs etc, then it flipped over to an area that showed my home estimated value, my estimated household income and a ton of other economic measures that gave them sweet spots for their quote.
While I obviously know people do this, to see it so blatantly laid out (it wasn’t meant for my eyes) was very gross.
By the way, the home value and income estimates were higher than reality, and his quote was also fairly high - though not the highest
I know a mechanic through a friend that only works on cars of make A. I took my car of make B to someone down the street.
My mechanic friend heard about it, and gave me the following warning.
The mechanic I was working with had an application where you entered in symptoms (e.g. belt noise), and it would stack rank plausible-sounding repairs by profitability. (e.g., should you just replace the belt, should you replace the alternator, or replace the A/C compressor) It used the markup of the parts needed for each job, hours you can charge, actual hours worked, turnaround time (part lead time), etc.
I switched mechanics, and the maintenance cost of my car dropped 75%. It also was at least twice as reliable after that.
Apps like that (and the plumber one) should be illegal. Their only purpose is to defraud customers, so the developers + the customers should be facing jail time.
Except in RealPage's situation, RealPage would be conducting their own verification, and you'd have to request an override to deviate from the recommended pricing. Do that too often and they'd kick you out of the scheme that got you the data in the first place.
What blows my mind is there are multiple people in this thread saying that that is perfectly moral, ethical and legal, and the people in the class action got lucky because this would have all fallen apart in the courtroom.
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
Adam Smith, The Wealth of Nations
Land ownership is the biggest business and the source of the biggest conspiracies.
Roughly 40% of the US GDP is rentier capitalism. It's much bigger than just land rent. Finance, utilities, mining. Healthcare with its artificial overheads. VC-backed tech companies with their loss leaders that transform into network effects and switching costs.
Billionaires do fund the land rent narrative though. Presumably because it takes the focus from their own economic parasitism.
It's both funny and sad to see the mental gymnastics of people trying to find solutions to this when the solution is real simple: it's public ownership.
Housing needs to be decommodified. It needs to stop being a retirement plan. We need to stop letting people hoard it. We need to stop subsidizing exurbs and making it illegal to build the kind of walkable communities people actually like. Case in point: Red Vienna [1].
As another commenter noted, this is in every industry. Utilities are a particularly bad one including telcos. All the best ISPs in the US are municipally owned. Chattanooga was the first really big poster child for this.
Privatization of all these things is just rent-seeking behavior.
So many of society's problems come down to housing being too expensive. Anything that makes it expensive needs to be stamped out and that includes RealPage as well as Airbnb/VRBO.
It is not just housing but all land - the grocery store ups prices without increasing profit because every landowner in the supply chain (who they rent their stores from, their warehouses, the factories that process and package foods, the farms themselves) ups rent too.
This is a predictable outcome of commerce due to the limited supply of land and is described in some detail by Adam Smith and developed by later thinkers like Riccardo and George (who took it to its logical conclusion and inspired the board game Monopoly).
During the 20th century, economics was wholesale rewritten to blur the lines between land and capital so as to bury this awkward conversation.
The general recommendation of these early economists was taxing land - moderate in the case of Smith, up to 100% per George. This amounts to public ownership of part of the profits of land ownership.
> It's both funny and sad to see the mental gymnastics of people trying to find solutions to this when the solution is real simple: it's public ownership.
No, it is not. Communism tried that and all communist countries failed spectacularly. Public ownership in practice means that everyone has rights but zero responsibilities.
Taking people's private property is not a solution to any crisis. This whole housing thing looks like "I want to have my cake and eat it too".
But then USSR wasn't really communist either, it was far more defined by dictatorship of individuals; which is diametrically opposed to communism.
If you have people living in palaces whilst others starve then you don't have communism - the first principle of which is that benefit of labour is split under egalitarian principles. Whilst rich people getting richer, and the devaluing of people typifies capitalism.
From my considerations, we need to limit wage disparity, eg by a top rate of tax at 100% (I know how that will be received here!). That limits power that can be accrued through wealth too - no more billionaires who can by elections. We also need to give ownership of the benefits of labour to the people; wage limits does that, but a more direct link is possible too and that can aid transition from Western Capitalism to a more equal distribution of wealth. Ultimately, globally we're going to face far more issues with migration as the effects of our past excesses take hold; redistribution of wealth across nations also needs to be accepted if we're going to manage that transition with less war and bloodshed.
I wonder what empirical and theoretical substance there is to the idea that the cost of living is due to lack of competition (in zero-to-one markets), and that competition is the solution to much of this.
On that basis, the 'free market' should be called the 'free, competitive market' - without competition, it has little value. Businesses should be required to compete and to opeerate in competitive markets. Anything anti-competitive should be treated harshly.
I was curious, so I looked this up: Section 5.3 of the 2010 U.S. merger-guideline explicitly classified markets with a Herfindahl–Hirschman Index below 1,500 as “unconcentrated.”
I can't quote the formula here, but HHI is, apparently, the sum of squared percentage market shares. Six equal-sized suppliers give an HHI of approximately 1,667, while seven give approximately 1,429—on opposite sides of the 2010 threshold.
U.S. Department of Justice and Federal Trade Commission, Statements of Antitrust Enforcement Policy in Health Care (August 1996) is also a good read page 44.
> In assembling information to be collectively provided to
purchasers, providers need to be aware of the potential antitrust consequences of information exchanges among competitors.
> the collection is managed by a third party (e.g., a
purchaser, government agency, health care consultant,
academic institution, or trade association);
> although current fee-related information may be provided
to purchasers, any information that is shared among or
is available to the competing providers furnishing the
data must be more than three months old; and
> for any information that is available to the providers
furnishing data, there are at least five providers
reporting data upon which each disseminated statistic is
based, no individual provider's data may represent more
than 25 percent on a weighted basis of that statistic,
and any information disseminated must be sufficiently
aggregated such that it would not allow recipients to
identify the prices charged by any individual provider.
> The conditions that must be met for an information exchange
among providers to fall within the antitrust safety zone are
intended to ensure that an exchange of price or cost data is not
used by competing providers for discussion or coordination of
provider prices or costs.
>> Businesses should be required to compete and to opeerate in competitive markets.
I'm not sure I understand where you are going with this? Are you suggesting that a new product cannot enter a market without a number of simultaneous competitors?
If I want to roll out fibre to an area that doesn't have it, can I? If I want to build a fresh-produce store in a town that doesn't have one, then I need to find someone else to compete with?
Lots and lots of businesses operate as quasi-monopolies if you look hard enough. Especially in smaller and rural environments. Lots and lots of places have one gas station, one mechanic, one vet, one doctor, one diner and so on.
Your use of the word "require" seems difficult to implement. What if no-one wants to compete with me? If Apple stops making Macs, does MS have to stop making Windows?
Fiber internet is an interesting one - where the incumbents will "dump" (not necessarily below cost, though who knows, but below market rate) if they think you intend to compete with them.
HN is filled with stories of exorbitant rates from AT&T and Comcast that get slashed 70%+, speeds doubled, as soon as a newcomer is ready to offer fiber.
In fact, there was even a story here of a community where they formed a company that could not have done it, or not without a huge effort, but just hinted that they were exploring offering fiber to a town - and just that hint was enough for Comcast to say "wait, wait, we did the math and you all have been overpaying for internet!"
I agree that those are challenges. Maintaining competition in markets is well-studied; I wonder what has been found - what can be done, how can the scope be limited without failing on the outcomes, etc.
RealPage's competition were doing the exact same thing and completely escaped oversight or retribution. The rental market is corrupt and crooked nationwide, and these lawsuits flubbed a chance at making a real change.
Not that it wasn't predictable. Follow the money: who owns the property and REITs that rely on squeezing renters for every cent? Certainly not lawyers, judges, and politicians. /s
I leased at two RealPage properties for a combined 151 months. Both of them were confirmed to be colluding with one another and they were both confirmed as “high software collusion” by an expert. I calculated that the max payout I could get is ~$83,000 for the estimated amount I was overcharged rent for those ~12 years.
“None of the companies admitted fault or liability. They did, however, agree to stop providing Realpage with their nonpublic data for use as an input in Realpage’s revenue management system’s price recommendations, and to stop using Realpage’s RMS in ways that use competitors’ non-public data to inform pricing recommendations”.
Okay but Realpage has a decade of real pricing data that it can use to continue informing these rental companies and outside of them having extremely hard boundaries in their service this is just going to happen again.
This doesn’t do a whole lot to address the actual issue, and these companies aren’t going to stop colluding over a wrist slap like this.
They absolutely won't stop. They will continue to do this manually - they already do / did. This software just saved them legwork.
And now they are using AI tools to handle the emails related to renting including price negotiation.
There is a non-trivial amount of data science work put into these tools with the explicit goal of keeping rents high and using all available data (ex. your credit score, history at other buildings they own, your payment history, local pricing landscape and tons more) to extract the maximum you're willing to pay.
Virtually all large landlords use them on just about every channel - email, website chat, SMS and even phone now.
This is why we created https://fless.io to level the playing field and bring some of the same tactics to the renter side in addition to saving the emailing / scheduling hassle.
Is there an actual issue? I've seen compelling arguments that places that banned the practice of algorithmic rent setting did not see any appreciable drop in rents. I'm almost convinced the problem is entirely supply side.
The problem is political, landlords run every level of government and use that power to artificially limit housing supply.
Landlords aren't developers, they don't control the supply.
All of the political representatives are landlords and they control supply through the legal system.
Again, landlord is a customer service job. It's developers that build housing, not landlords. Developers have representation landlords don't. After my city passed new tenant laws the city lost ~15k units which increased rents. In response the city asked landlords how to improve the market then proceeded to do nothing with what they were told.
Basically everyone in the US even kind of wealthy or with any political power owns property. When you own property, the best move in your self interest is to not build more property. Many upper-middle-class peoples wealth is held entirely in their property.
There’s basically no political will anywhere to make it easier to build.
If it was this simple, poverty would not be an issue. You’re reducing a serious problem to the most simple slogan and it doesn’t help anyone.
In my town the biggest property developers are openly best friends with the county commissioners and planning / zoning board.
And by best friends I don't mean "run in the same circles" but "go on vacation together with their kids", "are in each other's wedding parties", "are godparents to each other's children".
And then they have the audacity to act surprised when the public is pissed that, despite traffic studies showing that there's no road capacity and no room for adding lanes to arterials, despite environmental impact studies about the shoreline showing negative effects, that the commissions sign off on their buddies and their developments without even a hint of hesitation.
You can't even name and shame because there is no shame, it's like this is every city big and small.
There's more housing than people. What's artificially limited is salaries. Higher salaries would mean massive benefits for workers and businesses. And catastrophe for non workers and real estate.
There is not more housing than people in places where people have the highest income. The median income of Sunnyvale is twice that in the US, but the median house is 5x more expensive there.
If you plan to stay and work there for 5 years or more, it's still worth it, isn't it?
I’m struggling to see how real estate would be catastrophically harmed by higher salaries. Could you help me see the line between those two points?
Naively, if I knew everyone’s salaries were about to double, I’d hope to be holding a fair amount of real estate going into that doubling.
Higher salaries = everything which is produced by working becomes more expensive. That is not a problem for people who work for a living, because they have higher salaries and can afford it. But it is a problem for those who do not work, because they'll might have to sell their surplus real estate to afford cost of living.
But mainly it is that you would need to remove or decrease benefits for those who do not work in order to have room for higher salaries. That is not a problem for the unemployed because higher salaries means that the only people without work are those who do not want to work. But it is a big problem for those who do not want to work and for example would like to live off their real estate.
The gut reaction to higher salaries is that people would have more money to purchase real estate or pay rent, but I think the downwards effects for real estate are much stronger. And the evidence is that in every country which has seen a period of high salaries for workers, real estate has been cheap during that period for workers to buy.
> And the evidence is that in every country which has seen a period of high salaries for workers, real estate has been cheap during that period for workers to buy.
Real question. Do we have evidence of this from anything except developing economies pulling countries out of poverty? Like a first world country sort of thing. Because to me it seems like higher salaries comes first, and the property would lag for a bit while the market reaches its new level. Does that make sense?
I think that high salaries / increasing salaries is the foundation for an economy developing at all. So cause and effect are reversed from what you mention, if I understood correctly.
High salaries and cheap housing was the reality in I think every first world country when they developed after WWII.
Why would the landlords not raise their rents just like everyone else? When everything is multiplied by the same factor, nothing changes. You might have 2x the salary but if rent and food and everything else is 2x also, your buying power stays the same.
When salaries are high enough, more people can invest in building more housing. So as landlords drive up the prices, the market balances.
But since the wealth gap keeps widening, fewer and fewer workers can afford this, as they get priced out of locations that offer good employment. At the same time the rich keep investing their money into higher-margin industries. Consider that for landlords owning enough housing, building more can have a negative RoI, and they all know that they all know this!
If you don't believe me, think about just how quickly the datacenter boom became reality. All that money was waiting around, and evidently could have been turned into a lot of building activity in a short amount of time.
Because rent is set by supply and demand, if you price too high renters will move somewhere else.
> There's more housing than people.
I don’t think this is really true. It’s naively true if you just look at the number of homeless people vs the number of empty units, but misses:
1. That markets need some portion of empty units for fluidity.
2. That many people aren’t homeless, but living in situations where they would take more housing if it was available. (Living with roommates, ex-partners, family, etc.)
3. Many places simply don’t have enough housing for everyone who wants to live there. If they did, people would move from other places.
You know, this is actual economic orthodoxy. The government is supposed to stimulate the productive economy (the part that's not rent-seeking like landlords) by causing inflation by overpaying it's employees (and hire). Which then forces private employers to pay more and causes high inflation. Why? This haircuts existing debts, both public and private and is very bad for rent-seeking, and good for anyone productive (making money).
Of course, that also shows the problem: it haircuts pensions as well, since they are a large part of the rent seeking class.
There are other good reasons to have a reasonable amount of inflation.
If inflation is too low or doesn’t exist, then there’s less incentive to do anything with your money. If I have bunch a money that I don’t need to spend immediately, and I just want to keep it secure, why would I not keep it in a safe or non-investment account if it’s not losing value over time? What’s my incentive to risk it by lending it out to someone else?
Sure, I could say that my incentive is the interest rate, but my alternative is zero risk. Inflation turns “zero risk” into being more like a certainty of slow value loss, so that holders of capital are incentivized to do something at least minimally risky with that money (e.g., lend it to the government in the form of treasury bonds or deposit it into an insured bank account).
Debt has something of a bad reputation and obviously it can be overused and abused, but it’s also something that helps the efficiency of economies. It maximizes the amount of money actively participating in the economy rather than sitting.
> Sure, I could say that my incentive is the interest rate, but my alternative is zero risk.
The risk of missed purchases isn't zero and the risk of missing investment profits isn't zero either. From motivational point of view, inflation and deflation aren't different, they're the same thing in a mirror image.
Deflation is rare as hen's teeth, harmless and extremely easy to fix. Inflation, on the other hand, is the most corrupt economic phenomenon by far, it's hard to fix and it has ruined numerous economies, caused wars, destruction and famines.
> Debt has something of a bad reputation and obviously it can be overused and abused, but it’s also something that helps the efficiency of economies.
This is a strawman, nobody said debt as such was bad. However, since you started, let me correct you - as it is, debt not only "can be overused and abused" - it is routinely abused and overused and inflation is a huge part of it.
> Inflation, on the other hand, is the most corrupt economic phenomenon by far, it's hard to fix and it has ruined numerous economies, caused wars, destruction and famines.
Could you explain? If you work. You're not renting. You're not on a pension. You're not ... then what is bad about inflation?
> If you work.
Work or no work doesn't matter, inflation steals everyone's savings, wages grow slower than inflation - so they get stolen too, it causes a run on assets, feeds on itself and feeds corruption-driven bubbles, the funds extracted via inflation lead to monopolization and oligarchy-zation, inflation can be used to install Hitlers and manipulate elections, the list goes on.
> You're not renting. You're not on a pension. You're not...
Right, if you're not living, inflation doesn't matter, in all other cases it does. I don't know what you are talking about here or rather, I know that you don't know what you're talking about.
It's crystal clear that you have no idea what the role of banks in the economy is and what it's supposed to be. Without that understanding you're going to keep presenting pompously mysterious arguments which are nonsensical even by the low-bar measure of mainstream economics. I cannot type a whole econ 101 course here, you're supposed to figure out on your own why we have banks, how they work and what they're supposed to achieve.
> Work or no work doesn't matter, inflation steals everyone's savings ...
Luckily working people's savings are essentially nothing and you have a wage. Which means it won't affect poor working people. But yes it will destroy savings, which is why it hurts rich people and doesn't hurt poor people: the rich have savings you and I don't have. The rich have savings the state does not have.
Wages grow slower than inflation - that's the point, the government would shortcut this by overpaying, so that wages would grow at the pace or even faster than inflation.
> to keep presenting pompously mysterious arguments which are nonsensical even by the low-bar measure of mainstream economics ...
Still have my original (1970) economics textbook. This is what it says should be done. Explicitly raising inflation to 10% or so helps poor people by destroying their debt, and it hurts every kind of savings in the economy, which is why rich people don't want it. It equalizes everyone.
Besides I don't understand why you're even making this argument. Neither the US nor EU governments will balance the budget. Both are ~4 years off from the point where they will need to pay back more than they can lend, in other words, the point where NOT having something like 10% inflation will directly hurt their budget. And then they'll do what every big organization does when hit in the budget: do whatever to increase inflation. And if the government tried to cause inflation ... it's easy. Very, very easy.
In other words: you can't stop it. I can't stop it. One of 2 things will happen: either governments balance their budgets NOW or 10% inflation will happen. Since the idea of a balanced budget is laughable, that only leaves option 2.
> Luckily working people's savings are essentially nothing and you have a wage.
Lucky them, due to inflation constantly eroding their incomes, they can't save. I repeat, wage growth trails inflation, see housing and everything else.
> Which means it won't affect poor working people.
Untrue, as I've explained twice already.
> But yes it will destroy savings, which is why it hurts rich people and doesn't hurt poor people: the rich have savings you and I don't have. The rich have savings the state does not have.
Untrue, rich people don't have savings, they have properties and investments, inflation is how they acquire more of them, the poor are forced to sell cheap to survive, the rich swallow it all.
> Explicitly raising inflation to 10% or so helps poor people by destroying their debt,
More falsehoods from you - poor people, poor on collateral, borrow small amounts all the time, think payday loans at rates rising with inflation and several times higher than the rates for the rich - inflation does help the rich who borrow large sums at long intervals but it doesn't help the poor at all, for them, it's more inflation -> more wage erosion -> more (and more expensive) debt. You can't outrun your shadow, do you understand?
> and it hurts every kind of savings in the economy
It doesn't hurt the assets of the rich because they appreciate faster than inflation, especially if you include their siphoning of more assets due to the financially depressed poor.
> which is why rich people don't want it. It equalizes everyone.
The falsehoods are getting out of hand. The rich have vastly more debt than the poor, they borrow against their appreciating assets at vastly better interest rates and longer terms, so the more inflation - the less they repay, they love inflation more than anything, it makes them richer. If you're incapable of understanding my words, hear an authority with experience - by Trump's words: "Inflation made me very rich"
> Still have my original (1970) economics textbook.
Shoddy econ books are a dime a dozen. Give me the author and title, I love to make fun of sloppy econ books, there are so many of them, so much fun.
> Besides I don't understand why you're even making this argument... You can't stop it
Finally a sensible argument, kinda, as much as inevitability can be an argument. However, I'm not trying to stop inflation, I'm analyzing its systemic origins with an eye on systemic fixes. If it can't be stopped this time around, we should not allow it to happen again. Besides, I want to explore all options.
> I repeat, wage growth trails inflation, see housing and everything else.
Seriously? I mean first of all you must see that on a large timeframe this claim is beyond bullshit. Economists claim that essentially from the beginning of time until 1972, and for a lot of people more like 1990, wages grew faster than inflation. Probably since before the Ziggurats went up.
Second you must understand this can be shortcut. If the government explicitly hires and raises wages, obviously it determines 100% by itself if wages trail inflation or not.
> Untrue, rich people don't have savings, they have properties and investments
No they don't. Look at some properties and check if this is true. Rich people only really directly own private houses and only a few. And the superrich ... maybe a dozen. But that's it. All properties are financial constructions because of the massive liquidity advantages that has: Let's say you're rich, and you need money. If you own a shopping mall, you're screwed. But if the shopping mall is constructed using debt and you get 8% interest on that debt. First, it can be divided amongst ... anyone you like really. Second you can sell 1%, 10%, ... whatever you want to raise money. Or you can have them buy out the debt. Or ... The ability to raise money, to control where money goes is what really makes someone rich, it's what high middle class "climbers" don't have. Most properties work like companies do, except much more debt much less equity. One superrich who (has to) be pretty public with what he owns and how it's structured is the king of England. And while due to his special tax situation it is not 100% typical, it's still very instructive. So look at how it works. He owns companies (just because it's called "duchy of ..." or something like that doesn't mean it's not a company), and they own massive debt in properties that others manage for him.
> More falsehoods from you - poor people, poor on collateral, borrow small amounts all the time ...
There are TWO sides to debt. The person who borrows, and the person who lends money and gets the interest. If you have large inflation, on BOTH sides the numbers "go down" (compared to wages, because wages go up, loan amount don't)
The rest is making the same mistake as you keep making here. High inflation provides a (partial) reset. Existing loans become much easier to pay for, and worth much less. Poor people pay. Rich people receive the interest. Both become less compared to wages. Obviously this helps the poor and fucks over the rich.
I'm surprised nobody has mentioned the role of datacenters in this entire comment section. I should know better, I guess.
If housing supply is constrained, higher salaries simply mean people bid more on rentals and rents go higher.
The only answer is to build more housing and have a high property tax in unoccupied housing.
But housing supply is not constrained. There is more housing than people.
You could build as much more housing as you want, but if those houses only become accessible to purchase for those who already own real estate instead of for those who work, then nothing will change.
I do not understand how you are reaching the conclusion that housing supply is not constrained. Can you please explain what you mean by that?
Is allowing price-fixing and deniability (ans a service) across 100 mile regions a problem, while you yourself are highlighting a supply-side crisis?
Yes. That’s a problem.
If it's causally linked to higher prices, I agree. My question is whether we certainly know it's causally linked. In my mind right now it's similarly plausible that these things are just snake oil sold to landlords. There are a ton of conspiracy theories that would be a real problem, if true.
It's snake oil.
Landlords have an inherent trade off between holding out for a tenant who would pay a higher rent and not having the unit vacant in the meantime. Holding out for longer than that helps the other landlords at your expense. Meanwhile there are a large number of landlords, there is no way for the ones using a given system to force the others to do the same, and a significant percentage of them don't.
So if the system tells the landlords using it to do the thing that would increase rents if every landlord was using it, the "defectors" who don't use the system win out over anyone using it, which means using the system rather than defecting would cause you to lose money and everyone would have the incentive to defect.
Whereas if all the system is doing is suggesting the optimal point in the trade off between holding out for a higher paying tenant and renting the unit sooner, without assuming the other landlords are being required to use the same system, that's the same thing an individual landlord would do if they're not colluding.
The actual way landlords collude is through zoning boards, because then they have an enforcement mechanism, i.e. if someone is trying to defect by adding new units to alleviate the limited supply then the other landlords can sic the government on them, having passed the various laws against constructing those units there.
> So if the system tells the landlords using it to do the thing that would increase rents if every landlord was using it
This is precisely what happened. Quoting from my comment at the time (https://news.ycombinator.com/item?id=39579488) --
Subscribing to a pricing data service: legal.
Using data feed to guide pricing and set initial figures: legal.
Agreeing, either implicitly or explicitly, to let the pricing data feed set the price floor: collusion.
Leaving units unsold and refusing to lower the price despite insufficient demand: usually a bad business decision, possibly indicator of a market failure.
Leaving units unsold to maintain agreed-upon price floor despite insufficient demand: collusion, market manipulation. Congratulations, you are a cartel.
> This is precisely what happened.
You're assuming they were the first kind of fools rather than the second kind.
> Leaving units unsold to maintain agreed-upon price floor despite insufficient demand: collusion, market manipulation. Congratulations, you are a cartel.
Which is the thing that doesn't work when many other landlords aren't in on it, because then they get to fill their vacancies while you're stuck with the empty units.
Notice also that antitrust prohibits attempts to monopolize. Fools are quite capable of doing something which is still a violation of antitrust laws despite being ineffective and unprofitable.
> possibly indicator of a market failure.
Almost always.
The trick is figuring out where the failure is coming from, and whether your society can find a lever to pull to fix it.
Homeowners are usually the ones who don’t want more building, not amorphous landlords who have very little control over zoning and permitting in a place like the Bay Area.
Homeowners and landlords don't want more building for exactly the same reason: They own property there and consequently want it to become more scarce so the price of their asset goes up at the expense of tenants and new homeowners.
In general the homeowners are more numerous but the landlords are somewhat more organized.
The homeowners are also being taken for a ride, because less restrictive zoning reduces the value of units (since you can increase the supply of them) while increasing the value of each piece of land (since you can now build more units on it). And the homeowners (and small landlords) are typically the ones with a high ratio of land to units, but they get hornswoggled into demanding the thing that really benefits the corporate landlords who own the existing high density buildings.
There is no price fixing. They just enabled landlords to find out how high the market price actually was when they didn't know it before due to it being a very opaque market.
The market price is the price for which people are renting places based on market forces.
If the only market forces are landlords keeping half of their units empty so they can keep $1400 units priced at $2400 because that’s what the software (and indeed service) are pushing them to do, that’s price fixing.
There’s extra steps, it’s a new form, but the price is fixed, and the point of allowing housing to be built isn’t being fulfilled.
Math failure here. If you keep half your $1400 units off the market and get $2400 for the others you are losing $400 per unit. Also there is zero evidence any landlords were doing this.
Maybe you’re misunderstanding.
I’m speculating the price would be closer to $1,400 per unit.
The price across this hypothetical town is $2,400 per unit (let’s say it’s a 2 bed 2 bath apartment), “suggested”/set by RealPage software.
Because that’s how using their product worked.
Half of them sit empty because their business model doesn’t care (tax deductions on other income, while still increasing total assets in their portfolio).
There is…a good amount of evidence of landlords doing this, and how:
https://www.justice.gov/opa/pr/justice-department-requires-r...
and
these landlords coordinated through a variety of means, including:
Directly communicating with competitors’ senior managers about rents, occupancy, and other competitively sensitive topics. In one example, Greystar supplied Camden with information not only about very recent renewal rates, but also its approach to pricing for the upcoming quarter, its acceptance of RealPage’s pricing recommendations, use of concessions and competitively sensitive information about occupancy. Likewise, executives at Camden and LivCor communicated over the course of months about their pricing strategies, including plans for certain price increases. Regularly conducting “call arounds.” During these discussions, euphemistically referred to as “market surveys,” property managers called or emailed competitors to share, and sometimes discuss, competitively sensitive information about rents, occupancy, pricing strategies and discounts. Participating in “user groups” hosted by RealPage. For instance, landlords discussed via user groups how to modify the software’s pricing methodology, as well as their own pricing strategies. In one example, LivCor and Willow Bridge executives participated in a user group discussion of plans for renewal increases, concessions and acceptance rates of RealPage rent recommendations. Sharing information with competitors about parameters in RealPage’s software. As an example, at the request of Willow Bridge’s director of revenue management, Greystar’s director of revenue management supplied its standard auto-accept parameters for RealPage’s software, including the daily and weekly limits and the days of the week for which Greystar used “auto-accept.”
"Half of them sit empty because their business model doesn’t care"
What kind of insanity is this? Your entire argument is based on landlords not caring about occupancy, when that is actually the number one thing they care about. You obviously have no idea how any of this works and your linked source does not say a damn thing about landlords intentionally leaving units vacant.
Good news: proving illegal collusion didn’t require proving intentional vacancies.
The evidence for that, if you want it, is as easy as opening the 5 newest developments in any major metro, and see how many units are available, despite masses of families constantly looking. It’s kind of appalling.
PS it’s not me you’re debating, it’s the DOJ.
Except you can write off those $1400 units as $2400 of losses that will offset profits from another part of your business.
Not everything is "Economics 101."
>Except you can write off those $1400 units as $2400 of losses that will offset profits
No, the IRS doesn't allow tax deductions for the "missing $2400 rents" of unrented units. IRS only allows deducting ongoing expenses such as "maintenance, insurance, taxes, and interest," :
https://www.irs.gov/pub/irs-pdf/p527.pdf
Instead of writing off "unearned revenue," structuring arranges the transaction so that the cost of unoccupied units is treated as a fully deductible operational business expense.
The most common legal vehicle is a Master Lease Agreement, where a single corporate tenant (the Master Tenant) leases an entire block of units or a whole building from the landlord for a fixed monthly sum, taking on the responsibility to sublease individual units.
Splitting your operations into operating companies and property-holding companies furthers this.
Flagging doesn’t change legal reality.
Voting at a polling place might, but I’m just the messenger, just telling you what’s out there.
If you want to commit tax fraud you can still do that while renting out your units.
You don’t need evidence for vibes based thinking. The goal is to satisfy emotional needs, not logical consistency.
What about when market prices are public? Is knowing the market prices collusion?
It can be, if everyone also acts to keep prices high by behaving in ways that aren't typical.
https://en.wikipedia.org/wiki/Tacit_collusion
Reminds me of the extremely interesting paper https://arxiv.org/abs/1904.05234 Flash Boys 2.0
Basically when somebody makes a pricing error on a decentralized cryptocurrency exchange there's a mob of automated arbitrage bots that try to trade against it. Who wins and actually gets to make the trade is mainly determined by how high of a transaction fee your bot is willing to pay.
You can win instantly by offering to trade with a transaction fee so high it almost wipes out all but a cent or two of the entire arbitrage profits, because nobody else will pay a higher fee.
Instead what happens is bots offer the lowest possible fee, then immediately increase their fee as soon as they see a competing bot try to take the trade with a higher fee. This results in the bot offering the highest fee changing every several milliseconds as the fee quickly grows.
The way Ethereum mining works, this results in the winning bot being randomly selected from among the set of bots "bidding" up the transaction fee: blocks are mined at random intervals of iirc about 20 seconds, and whoever had the highest bid at the time the next block is mined wins. <20 seconds of bidding is short enough that even with the bidding, the transaction fee doesn't get bid up particularly high, and the winner makes out with a highly profitable arbitrage trade.
By giving up a guaranteed win and instead rolling the dice against other bots, transaction fees stay low and everyone has a higher expected profit. It's coordination that happens without any communication between the participants and quite possibly the participants didn't realize they were in effect cooperating when they added the high speed bidding behavior to their bots.
> You can win instantly by offering to trade with a transaction fee so high it almost wipes out all but a cent or two of the entire arbitrage profits, because nobody else will pay a higher fee
This is like 1980s sawtooth algos in real finance.
A lot of crypto is former HF folks taking old strategies to a dumber field.
I have really enjoyed watching crypto act like they are white knights against the evil traditional financial system and then go on to reinvent it piece by piece.
You're assuming that the contention was with the functionality and not with who controlled it.
The current players in crypto are the same people. And there’s noting systematic about crypto that changes this — people with money can afford to buy more mining capacity or stake more coins.
Yes, incumbents warped the original intentions, it's true. Famously, Bitcoin was coopted and the originally intended functionality only lived on in the Bitcoin Cash fork. Cryptocurrency was supposed to be a way to transact without touching the banking system, but banksters realized that it could be an unregulated vehicle for their financial shenanigans. I don't know how you might have guarded against that sort of attack - capitalism being about commodification at a fundamental level - but, "It was always a fox house!" is incorrect.
There’s nothing evil about aiming to earn a penny or a fraction of a penny on a transaction.
There is something evil, however, about scaremongering around fractions of a penny to convince folks to move money to one where the spread is several percent.
Who pays that penny?
Whoever wants to pay an extra penny. Like any other transaction.
That isnt cooperation. That is basic market principals in action. Bid and counter bids that whittle down the profit margin based on willingness to risk a win/loss? These are auction principals as old as time. This is reaction rather than cooperation.
The winner of the auction is not based on "willingness to risk a win/loss". The auction always ends at an absurdly low price because of the mechanics of the bidding, none of the participants ever drop out, because the price never goes above what they're willing to pay. Please read my comment or the paper again, this is not like an ebay auction at all.
For example, imagine a car auction that lasts only 20 seconds, with a random delay of up to 1 second, and with a very small minimum bid increment, say 2 cents, and no bidding fee or limit on number of bids. Now image 5 different people each outbidding each other by the minimum bid increment every 10 milliseconds. The price will climb by about $2/second, so by the end of auction, the winner will get the car for $40. Because everyone's bidding so fast, and nobody knows exactly when the auction will end, the winner is effectively random. At least on an expected value basis, this is highly beneficial to the participants vs actually bidding up to the true price of the car until other participants are not willing to bid anymore.
Tacit collusion wouldn't work in this case, because most rental markets aren't oligopolies.
On its own? Of course not. Collusion is much more specific a term than that.
They got a wrist slap because the case was flimsy and probably wouldn't stand up in court. This looks nothing like price fixing and everything like price discovery in an undersupplied market, and the people bringing the case are the same government responsible for the actual problem.
The case wasn't even remotely flimsy:
The software literally includes an algorithm that says "this week, you will set the rate for this apartment at $X" based on RP's data.
And, if you want to deviate from that, without being kicked off RP and losing your substantial fee payments, you will follow that rate (and they tell you that they _will_ check), or you can "request an override" from RealPage, that they may allow or deny at their discretion (and RP agents are formally trained that override approvals may not exceed 5% of requests).
> Consistent with their agreement to impose rents generated by RealPage RM Software nearly all the time, Defendants agreed to limit overrides. For example, a RealPage LRO training document states: “Overrides should be few and far between.” Similarly, internal RealPage LRO training documents teach cartel members’ regional managers to beware of “Override Overload” or “rogue” leasing agents who too frequently override the LRO-generated pricing.
> An internal presentation created by Defendant Greystar explicitly acknowledges that RealPage RM Software users should each seek to accept at least 95% of the RealPage-generated prices, emphasizing that “Discipline [o]f using revenue management increases more consistent outcomes.”
> Former Greystar employees have similarly confirmed that negotiating rents other than those set by the RealPage RM Software was unacceptable.
> Even where Participating Landlords do not enable auto-accept, most landlords cannot, on their own, charge rents other than those generated by RealPage’s RM Software— landlords can only “propose an override.” The landlord must then provide a written business justification for why they wish to depart from the RealPage-generated rent.
"Not price fixing", huh?
Just to reiterate that training presentation:
> Discipline [o]f using revenue management increases more consistent outcomes.
Functionally identical to Entrata, which is never even mentioned in reporting, let alone involved in lawsuits.
https://imgur.com/a/RR2vWnJ
ProPublica's reporting showed the problem to be so obvious and egregious that authorities had to publicly move against RP. However, rental rates are what form the backbone of property valuations that landlords borrow against, or for REITs. I suspect that there's no real political will to go after this clearly-widespread fraud because it would have deep ramifications for the financial system at-large. If rents fall substantially, so do property valuations, which blows up many financial positions. No one involved in the lawsuits is personally connected to affected renters; many are connected to affected landlords, or else to people who are heavily-invested in general. None of these people want asset prices to drop.We need a public rental registry of rental prices that anybody can browse, analyze, etc. The information disparity is a problem.
However, that's not a systematic method for lower prices. It just prevents individual cases of price gouging.
How it works in Victoria, Australia is for renewing an existing lease is you must provide examples of comparable rentals in the area at or above the price you are proposing. And the tenant can dispute with their own comparable if they believe the price is wrong. New listings can be listed at any price.
There is enough turnover with new listings to find the market rate while preventing existing tenants from being screwed over by unreasonable prices.
Australia also almost entirely works off rentals owned by individuals who own 1-3 properties rather than corporate owners so no one landlord has any sway over the market.
Most landlords arent big corporate in the USA either especially in areas where the housing crisis is the worst.
I think this narrative is just meant to distract people from questioning the necessity of the landlord class, they want people angry at a faceless corporate boogieman instead of local landlords (for obvious reasons)
Rental prices are set at the edge, so you only need to own a fraction of the market to drive rent increases. Corporate landlords absolutely do this.
The "mom and pop" landlord who owns a few houses is much less likely to keep a property vacant to support higher rents. They have taxes, insurance, and probably debt to pay off. They need cash flow; they'll be more likely to cut their rent a bit to get a tenant.
Show me the math where a large landlord can make money by keeping apartments intentionally vacant. Corporate landlords have no less need for cash flow than mom and pop landlords.
The cost of holding apartments intentionally vacant is large, and has a very tiny effect on pricing unless there's a single player with more market share than exists anywhere I have seen in the US.
In a different arena, parking, it's widely accepted that the best possible way to establish adequate parking is to set prices high enough that there's always a spot available. Anything less results in people not being able to park. Setting apartment prices similarly is beneficial to the public, in that there's always a place to move into.
We need apartment vacancies, they are beneficial to renters, because people need to find housing at all times. Ideally we have a surplus of apartments so that not only do renters have choices but so that prices fall to the cost of providing housing.
Services like RealPage provide information that allows the small landlord to act like corporate overlords, praise be American corporatism.
How about an app that collectively bargains rents algorithmically? Call it RedPage lol.
That's basically a listing search page that allows you to sort by price.
What else do you expect "collective bargaining" to do in a market where every tenant has a different landlord? Your landlord isn't going to care if the tenants of 10,000 other landlords threaten to move out. They only care if you threaten to move out, and then to credibly do that what you need is to show them the unit you could move into which is asking for less.
The real problem is that you need the unit you can threaten to move into to first exist, rather than its construction being inhibited by zoning etc.
Collective bargaining your landlord can't ignore is you and your neighbors all withholding your rent payments until your leases are renegotiated.
> Collective bargaining your landlord can't ignore is you and your neighbors all withholding your rent payments until your leases are renegotiated.
How is that collective bargaining when your neighbors have different landlords?
All you're suggesting is to stop paying rent, which anybody can do on their own, with the usual consequences of your credit getting ruined and then the landlord serves you an eviction notice and changes the locks.
Consider the economics of what you're suggesting. Your unit costs $800k when it should cost $200k because of artificial scarcity (zoning), so then the landlord has to pay $800k for it and charge rents high enough to pay back that loan. The way you fix that is by getting the cost of the unit back down to where it should be, i.e. building more units to alleviate the scarcity.
Demanding that the landlords charge less without reducing what they have to pay for the building doesn't work, because then who is going to sink $800k to build a new rental unit? Who is going to keep renting out their existing units at a loss instead of turning them into condos or similar? Which then makes the scarcity of rental units worse and causes rents to go up.
You can't solve a supply problem by bargaining with someone the law still effectively prohibits from increasing supply.
There is such a thing as a Tenant Union, and in fact they are currently spreading across the country as renters turn to collective bargaining. It works!
That doesn’t work you all get sued and hit with a judgment to pay late fees
Depends on how big the union is. There is a certain size where "just sue them all" is no longer practical.
It's 1 lawsuit with multiple defendants, class size doesnt impact practicality.
We have something similar in Spain, except instead of "comparable rentals in the area" there is a index (called IRAV (Índice de Referencia de los Alquileres)) maintained by the government each year, which limits how much rents can be increased. My landlord just reference that each year, it's easy for me to check if it's right, then that's it. For the areas where supply is limited ("áreas tensionadas"), as some areas like Barcelona is geographically limited to expansion, there is a total limit as well, independent of the IRAV.
Of course, if there are improvements in the rental, you can go beyond the index as the property been "improved", but it's really handy to know each year that it's limited and the exact amount. For 2026 it's locked to 2.14% for example, for everyone.
A growing body of economic research shows that this allows producers to keep prices high even with lots of competition.
The prices should be delayed two months. The rate at which pricing information propagates dictates how much of the rental pricing mass (number of owners * average units owned) gets thrown around how quickly. I don't have a number, but something like 2 months. Treat this data as if it was a vile of Devil's venom [1]. If they setup back channel information sharing networks, or collusion networks of any kind. <bad thing happens, not just a fee>
Second, the historical database should be deleted. And if they can't survive that, so be it. Keeping the spoils of crime should be the crime. Justice still isn't finished.
[1] https://en.wikipedia.org/wiki/Devil%27s_venom
By what mechanism do the producers keep prices high if the "lots of competition" is constantly undercutting them and adding new supply to replace anything the colluding subset tries to withhold from the market?
Cost cutting while shopping for expendable commodities does not result in a long term drop in quality of life in the same way that cost cutting while selecting your residence could.
That's confusing cost with price.
The existing price is high not because it should cost that much to create a new unit. It's because you're only allowed to put one unit on a particular plot of land, which makes the land cost per unit 10x as high as building 10 units there. Adding more units doesn't require you to use lower quality materials or similar, it just requires you to actually build them.
The zoning restrictions often prevents new supply.
Which is "that and $5 will get you a cup of coffee".
The zoning restrictions cause the higher rents by themselves. No collusion is required and no solution is possible without addressing that.
Whereas if you do address that then how is the collusion supposed to work?
Apartment landlords don't undercut each other. They raise rents in lockstep and then offer "specials" like a month off (amortized) that lower initial out-of-pocket costs without affecting the base rent, which gets raised on subsequent lease renewals to make up the difference. The only option to avoid this is moving every year (instability being clearly great for community /s) since corporate landlords will not negotiate rates.
> Apartment landlords don't undercut each other.
This is trivial to empirically disprove. Look at the listings for similar units in an arbitrary city. Are they all exactly the same price? No, and then the landlord who offers the lower price for an otherwise equivalent unit fills their vacancy sooner.
> They raise rents in lockstep and then offer "specials" like a month off (amortized) that lower initial out-of-pocket costs without affecting the base rent, which gets raised on subsequent lease renewals to make up the difference.
These are obviously gimmicks, but who is requiring you to fall for them? If you're planning to stay somewhere for a long time then look at the base rent and the length of the lease. Let the landlords offering "specials" and short lease terms get taken advantage of by the tenants who know they're going to be moving in a year anyway.
> The only option to avoid this is moving every year (instability being clearly great for community /s) since corporate landlords will not negotiate rates.
An obvious option to avoid this is to avoid corporate landlords. Most rental properties are owned by a "corporation" in the sense that it's an LLC for liability reasons, but that doesn't mean the ones owned by an individual who lives in the same city and has fewer units than you can count on one hand behave the same way as the ones owned by some private equity schmucks, and there are lots of the former.
Also, who wants to rent the same unit for 30 years? Renting should be for people who haven't saved a down payment yet and people who are planning to move soon. When we're seeing people in middle age who want to stay in the same place but still can't afford to buy anything there, we need to be doing something about the unaffordability of buying rather than accepting the premise that we're going to continue screwing them into needing to rent.
If the evidence seems to disagree with your theory, maybe your theory has to change?
What evidence are we talking about, though?
There's been an assertion of a "body of literature" but no pointers to it, no assessment of the data quality, no assessment of the validity of the interpretations, etc.
There are entire bodies of literature based on zero evidence, due to epistemic doubt about evidence as grounds. For example, critical geography actively rejects basing their body of literature on evidence, and reaches conclusions about gentrification and displacement and housing production that are quite contrary to both the evidence and standard economic theory. Yet the work of critical geographers is endemic in public policy around urban planning and political debates on housing production in urban areas.
I would agree in general that theory must change to match the evidence, but again, what evidence is at play in any of this thread?
The evidence is completely in accordance with the theory.
The theory says that new units are added when prices are high and building new units is practical. Building new units is inhibited, therefore prices go up, exactly according to the theory.
The problem isn't the theory, it's the inhibiting of adding more units.
Can you share several articles about this? I haven't found one but it's hard to search for.
Is this not almost exactly what you get on apartments.com or zillow.com by just looking at the listed prices in an area?
I think you might have the problem backwards. Realpage was about buyer collusion, and that wouldn't look any different from the prices naturally just rising in a market with more demand/less supply because even sellers who aren't colluding would still raise their prices if they saw that that was the going rate in the area.
When there are multiple competing factors all influencing price simultaneously it's very hard to accurately determine how much any particular factor contributed, or what the "actual price" would have been without them.
This is actually essentially the problem that justifies markets as an efficient way to arrive at fair prices - it's computationally too expensive to calculate the precise supply/demand ratios at any given moment, and demand can change much faster than supply can adjust (and nobody could ever really know how elastic demand is for things like local housing markets anyway).
So sellers want to respond to changes in demand by raising prices, because the business model of housing rentals is matching short term demand/pricing/risk to long term costs/costs/risk. But every buyer has their own demand preferences and every supplier has a different product with different fixed costs, and everybody knows their own demand preference and ability to provide supply, so the aggregate price a market settles at "collapses" all that information without explicit coordination: https://en.wikipedia.org/wiki/Economic_calculation_problem
If there truly is an increase in demand, as a buyer you probably do want rents to increase, because otherwise you get shortages like in Berlin where there is nothing to rent. So that's why coordinating to withold inventory with other sellers is bad, it creates a shortage anyway and only a small number of participants need to do it to move the entire market
Those sources are tainted. There is an epidemic of fake listings on websites where once you call to inquire, it turns to a bait and switch where they say the fake apartment is no longer available and tell you "what else" they have instead.
It's not only fakes - there is always a very large gap between what is available and what is listed online in honest buildings. Humans not marking move-outs or lease signings in realtime always creates a gap as do move-in dates. Buildings tend to only list what's available until the end of the month not 60 or 90 days out when you may actually want to move.
The best solution is to contact the building but this is time intensive and you get a lot of spammy followup which is why we created https://fless.io to automate this process and help you find what is actually available and not just what zillow or the management company's website lists. It's still the best way to know what is truly available.
No, those are advertised prices, not actual prices.
Look at the difference in prices between recent home sales and listed home prices, it's exactly the sort of information differential I'm talking about.
The US protects its homeowners above all, which is why there are these public databases of true sale prices of real estate. Renters should have the same protections and information too.
But, those... are the actual bid and asks for the home that you were able to verify yourself online, because it's public data?
It's not very common for residential rental agreements to differ substantially from the listed price in the US. It is quite common for long time tenants to pay a different (usually much lower) rate than new listings (often as a result of government regulation or just people being nice to each other).
What realpage did that was illegal was suggest coordinated pricing/inventory management to their customers through their software.
What exactly are you expecting to uncover by knowing what people are paying for rent? I actually have nothing against that in principle. I just don't understand how that establishes any kind of evidence that somebody is doing something wrong.
Should rentals be seen as economic opportunities for hyper efficiencies? IE should the market be structured to extract the maximum profit from renters?
Not clear to me that is the right approach, or if owning rentals should be more of a fixed income approach (or even speculative - profits only come from the sale of the property).
The general premise of the rental market is that if rents are high, the profits from building new rental units will justify the construction costs and then new units will be added until the rents go down, i.e. until it stops being profitable to add more.
This actually works unless you inhibit the construction of new units. Naturally that's what we've been doing, which is why it isn't working. But the solution is to stop inhibiting the construction of new units.
Because the alternatives don't actually work. Unless you can build enough units to meet demand, there aren't enough units. Which means you either have high prices which suppress demand because people who can't afford them are forced out, or shortages because you're imposing some inadvisable price controls and then instead of being unable to get a unit because you can't afford the rent, you can't get a unit because they're all occupied and no one is adding more.
Some states have solved this to some extent with the builder's remedy to override local zoning decisions.
And cities, like Seattle, still undercut this by taking way too long to review permits.
Seattle has more problems than that. They recently lost an illegal takings case where they used the scorpion and frog defense -- You should have known we'd apply additional affordable housing conditions that make your venture unprofitable.
Al la dc rent registry, which I always thought was ironic because doesn’t this create a database where landlords can consider prices based on others… but I guess it would be public in this case.
https://rentregistry.dc.gov/
Well the point of market based interventions and government regulations like this is primarily to reduce information asymmetry. You still ultimately need to increase supply or reduce demand to move price.
Depends on the rate of information update and how long the records are retained for. High frequency updates create a higher fidelity information channel.
I don’t see why rental agreements can’t be registered with the county like house sales are. It would also eliminate the need for squatter laws, as it would be trivial for police to pull up the county website and see who belongs in the home.
Berlin wants to do that to enforce rent control more effectively.
Americans are too privacy focused to accept this, but I could easily see a cottage industry of "registered agents" popping up around it who sign leases on behalf of individuals and shield them from public scrutiny.
Alternatively we could keep the names private. A cryptographic solution would easily serve the need of authorities verifying the right person is in a place without identification, but good luck figuring out how to ensure the tenant has their keys somehow since in the US there are zero pieces of identification you can ensure every citizen has.
Are we privacy focused? Look at products like Facebook Muse, or Facebook, or Instagram, or Whatsapp, or the perv glasses, or or or
See RealID for how long certain states has been kicking that bucket down the road.
American's seem to only care about privacy from the government, but wanting privacy from trillion dollar corporations? They keep the stock market high and provide value to their major investors and everyone's retirement accounts so obviously its fully within their rights to spy on us 24/7. /s
I think publishing your own rental contract is already legal?
(Unless the other party to the contract deliberately asks you in the contract to keep it quiet. But that's something you need to actively agree to.)
It’s more credible if it’s in a government database like property sales are, plus there would be a lot more pricing data.
Governments ain't magic.
Abundance of pricing data depends on whether you make the registration mandatory more than who runs the database.
Well, a Torrens registry systems still isn't universal yet in the US.
We have that in my city. Works great. If your city doesn't have one you don't have to wait for an official one. You can crowdsource rent data.
What about a law that bans house ownership and rentals unless you are a physical person and not a company? What would be the cons of such a thing?
The fact that the number of houses owned by large corporations is so low as to be insignificant shows that it’s basically 0% of the cause. (I’m assuming you’re not against a landlord who owns a small number of properties forming an LLC, but mean companies that rent lots of properties.)
It is a supply issue caused by local building codes and zoning. Full stop. Everything else is just pretending to do something about the problem, and corporations are just scapegoats.
> It is a supply issue caused by local building codes and zoning. Full stop.
But RealPage isn't a supply issue? It's easy to price gouge consumers because housing is inelastic. And the fine they got is a slap on the wrist!
Price gouging is more widespread than one isolated price fixing case. It's easy to achieve in an inelastic market. As one example, moving costs money so rentiers can raise rents as long as there is a switching cost to moving. Deregulation doesn't address the fundamental inelasticity of the housing market.
Your comment also seems to be oblivious to the role that interest rates play. Mortgages are not corporate-owned in the sense of the parent comment, but mortgages are a cash flow from home owners to corporate financiers - a cash flow from the working class to the wealthy. ZIRP led to high prices; with rising rates, homeowners are incentivized to hold on to their properties rather than move. These are issues of macroeconomic finance and wealth disparity, not "building codes and zoning".
While you're right that the parent's comment of corporate ownership of houses is off base, multi-family housing is majority corporate owned. Multi-family housing is a huge portion of the housing market, particularly in cities where prices are highest. Corporations aren't "just scapegoats" here either - they are parasitizing cash flow from workers here as well. Corporate profits is where the money in high housing prices ultimately goes.
There is a reason billionaires astroturf YIMBYism. It's precisely because it doesn't threaten their class interests.
> The fact that the number of houses owned by large corporations is so low as to be insignificant shows that it’s basically 0% of the cause.
There's a disturbing amount of misinformation in this thread.
"So low as to be insignificant"? Apartments are a little different but for SFHs
Individuals held 59.6% of single-family rental properties in 2024, down from 70.9% in 2021.
(https://www.credaily.com/briefs/single-family-rental-ownersh...)
I don't know how you come to the conclusion of "insignificance".
Can’t see through the paywall. Entered my email but never got the code. But I’m guessing we’re talking semantics here. OP used the word corporation, but that doesn’t really make sense since nearly anyone renting out a place is forming an LLC.
“Investor” still doesn’t mean a large corporation, I’m guessing this article is saying that a good chunk of rental homes are owned by people who own more than one, but most of them still don’t own a lot.
Am I close?
You have over-simplified "ownership" into a thing that doesn't exist. Most Americans "own" their house in a complicated relationship between themselves, individually or jointly or as a family trust, and one of several monstrous global financial firms, each of which holds part of the interest.
It would dramatically reduce the availability of rental properties. So, if you really hate renters, it’s a good thing I guess.
Extremely low chance that I’m going to put my entire net worth on the line to own and rent out housing in my own name.
Exactly zero chance that I’ll do it in a multi-family or apartment building.
Holding these things in corporate title is sensible risk management and compartmentalization.
AIUI LLCs for rental properties have very little protective power in court, and are easily shredded by plaintiffs' attorneys. If you thought that you were getting some degree of legal protection from holding your small multifamily in an LLC- you're probably not.
For example- do you have a mortgage? Almost certainly in your name, you have to be very large to receive a mortgage as a corporation. If you're holding a property in an LLC but the mortgage in your name, that's classic piercing the corporate veil and will take an attorney about 10 minutes to shred that in court
Why? Same cash flow it just goes to mortgage you own instead of landlords mortgage + their profit margin. It would actually be cheaper for current renters because of this.
Not everyone who rents currently wants to buy or is in a position to buy.
_thats it_ ???
I filed my claim, and based on their calculator this might be the most serious check from a class action (assuming I get the full amount). For me its ~1.5k between 3 named landlords.
Where is this calculator?
There is no calculator per se, in the settlement they explain the formula for payouts.
I've been saying this for a while, but there is a cottage industry like RealPage in pretty much every industry. These companies need to be slammed out of existence for anti-competitive pricing and collusion. So much corruption. I'm so sick of fraud and corruption.
I really can't think of any others. Which is why RealPage has been so newsworthy.
If you have examples of such a company in other industries, please share.
RealPage isn't even the only one in its industry:
https://imgur.com/a/RR2vWnJ
Their marketing documents admitted to the exact same behavior.No one cared about those of us hurt by this company to even bother filing a lawsuit against them.
I mean we all have chatgpt now:
It's pretty bold to name the price fixing software Pricef(i)x
You've never used salary data at a work place?
Companies like Radford collect salary information aggregated and sell it to other companies trying to set salary levels for similar roles.
These companies buying services from Radford are indirectly colluding through Radford, just like RealPage.
I had a plumber over to quote a HVAC replacement, while he was working up the quote I saw his iPad where his was inputting the equipment for costs etc, then it flipped over to an area that showed my home estimated value, my estimated household income and a ton of other economic measures that gave them sweet spots for their quote. While I obviously know people do this, to see it so blatantly laid out (it wasn’t meant for my eyes) was very gross.
By the way, the home value and income estimates were higher than reality, and his quote was also fairly high - though not the highest
I know a mechanic through a friend that only works on cars of make A. I took my car of make B to someone down the street.
My mechanic friend heard about it, and gave me the following warning.
The mechanic I was working with had an application where you entered in symptoms (e.g. belt noise), and it would stack rank plausible-sounding repairs by profitability. (e.g., should you just replace the belt, should you replace the alternator, or replace the A/C compressor) It used the markup of the parts needed for each job, hours you can charge, actual hours worked, turnaround time (part lead time), etc.
I switched mechanics, and the maintenance cost of my car dropped 75%. It also was at least twice as reliable after that.
Apps like that (and the plumber one) should be illegal. Their only purpose is to defraud customers, so the developers + the customers should be facing jail time.
That sort of counters the advice to get three quotes. If every bidder has that info, it may be harder to get the "best" price.
Not really, because a slightly smarter (or more motivated) seller will realize they can make the sale by being slightly lower than the other sellers.
A buyer should also ask the sellers for a lower price after the initial prices are given.
Except in RealPage's situation, RealPage would be conducting their own verification, and you'd have to request an override to deviate from the recommended pricing. Do that too often and they'd kick you out of the scheme that got you the data in the first place.
What blows my mind is there are multiple people in this thread saying that that is perfectly moral, ethical and legal, and the people in the class action got lucky because this would have all fallen apart in the courtroom.
Could you give us other examples?
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
Adam Smith, The Wealth of Nations
Land ownership is the biggest business and the source of the biggest conspiracies.
Roughly 40% of the US GDP is rentier capitalism. It's much bigger than just land rent. Finance, utilities, mining. Healthcare with its artificial overheads. VC-backed tech companies with their loss leaders that transform into network effects and switching costs.
Billionaires do fund the land rent narrative though. Presumably because it takes the focus from their own economic parasitism.
Yep sue propertyme next
It's both funny and sad to see the mental gymnastics of people trying to find solutions to this when the solution is real simple: it's public ownership.
Housing needs to be decommodified. It needs to stop being a retirement plan. We need to stop letting people hoard it. We need to stop subsidizing exurbs and making it illegal to build the kind of walkable communities people actually like. Case in point: Red Vienna [1].
As another commenter noted, this is in every industry. Utilities are a particularly bad one including telcos. All the best ISPs in the US are municipally owned. Chattanooga was the first really big poster child for this.
Privatization of all these things is just rent-seeking behavior.
So many of society's problems come down to housing being too expensive. Anything that makes it expensive needs to be stamped out and that includes RealPage as well as Airbnb/VRBO.
[1]: https://www.youtube.com/watch?v=41VJudBdYXY&t=191s
It is not just housing but all land - the grocery store ups prices without increasing profit because every landowner in the supply chain (who they rent their stores from, their warehouses, the factories that process and package foods, the farms themselves) ups rent too.
This is a predictable outcome of commerce due to the limited supply of land and is described in some detail by Adam Smith and developed by later thinkers like Riccardo and George (who took it to its logical conclusion and inspired the board game Monopoly).
During the 20th century, economics was wholesale rewritten to blur the lines between land and capital so as to bury this awkward conversation.
The general recommendation of these early economists was taxing land - moderate in the case of Smith, up to 100% per George. This amounts to public ownership of part of the profits of land ownership.
Utilities are a monopoly and practice has shown regulated monopolies to be worse than public monopolies. Though my public utility isn't well run.
Housing does allow for market competition. The New York housing department is the worst landlord in the city going by HPD complaints.
Housing pricing and scarcity is driven by population growth and wage suppression from plantation migration policy.
... and the term for this behavior gives it away: "rent-seeking".
> It's both funny and sad to see the mental gymnastics of people trying to find solutions to this when the solution is real simple: it's public ownership.
No, it is not. Communism tried that and all communist countries failed spectacularly. Public ownership in practice means that everyone has rights but zero responsibilities.
Taking people's private property is not a solution to any crisis. This whole housing thing looks like "I want to have my cake and eat it too".
I wonder about the failure of the PRC while heaving 500 million out of poverty the last 50 years. Interesting failure mode.
PRC isn't communist.
But then USSR wasn't really communist either, it was far more defined by dictatorship of individuals; which is diametrically opposed to communism.
If you have people living in palaces whilst others starve then you don't have communism - the first principle of which is that benefit of labour is split under egalitarian principles. Whilst rich people getting richer, and the devaluing of people typifies capitalism.
From my considerations, we need to limit wage disparity, eg by a top rate of tax at 100% (I know how that will be received here!). That limits power that can be accrued through wealth too - no more billionaires who can by elections. We also need to give ownership of the benefits of labour to the people; wage limits does that, but a more direct link is possible too and that can aid transition from Western Capitalism to a more equal distribution of wealth. Ultimately, globally we're going to face far more issues with migration as the effects of our past excesses take hold; redistribution of wealth across nations also needs to be accepted if we're going to manage that transition with less war and bloodshed.
I thought it was all about who owns the means of production. I guess it was palaces and poverty all along; learned something new.
I wonder what empirical and theoretical substance there is to the idea that the cost of living is due to lack of competition (in zero-to-one markets), and that competition is the solution to much of this.
On that basis, the 'free market' should be called the 'free, competitive market' - without competition, it has little value. Businesses should be required to compete and to opeerate in competitive markets. Anything anti-competitive should be treated harshly.
Even without outright collusion, a market without at least seven viable suppliers is not really competitive. Current "monopoly" policy is corrupt.
(Seven has been experimentally determined, but I can't recall where.)
I was curious, so I looked this up: Section 5.3 of the 2010 U.S. merger-guideline explicitly classified markets with a Herfindahl–Hirschman Index below 1,500 as “unconcentrated.”
I can't quote the formula here, but HHI is, apparently, the sum of squared percentage market shares. Six equal-sized suppliers give an HHI of approximately 1,667, while seven give approximately 1,429—on opposite sides of the 2010 threshold.
Is that where you got the number?
U.S. Department of Justice and Federal Trade Commission, Statements of Antitrust Enforcement Policy in Health Care (August 1996) is also a good read page 44.
> In assembling information to be collectively provided to purchasers, providers need to be aware of the potential antitrust consequences of information exchanges among competitors.
> the collection is managed by a third party (e.g., a purchaser, government agency, health care consultant, academic institution, or trade association);
> although current fee-related information may be provided to purchasers, any information that is shared among or is available to the competing providers furnishing the data must be more than three months old; and
> for any information that is available to the providers furnishing data, there are at least five providers reporting data upon which each disseminated statistic is based, no individual provider's data may represent more than 25 percent on a weighted basis of that statistic, and any information disseminated must be sufficiently aggregated such that it would not allow recipients to identify the prices charged by any individual provider.
> The conditions that must be met for an information exchange among providers to fall within the antitrust safety zone are intended to ensure that an exchange of price or cost data is not used by competing providers for discussion or coordination of provider prices or costs.
Damn. From 1996!
Almost certainly -- thanks!
>> Businesses should be required to compete and to opeerate in competitive markets.
I'm not sure I understand where you are going with this? Are you suggesting that a new product cannot enter a market without a number of simultaneous competitors?
If I want to roll out fibre to an area that doesn't have it, can I? If I want to build a fresh-produce store in a town that doesn't have one, then I need to find someone else to compete with?
Lots and lots of businesses operate as quasi-monopolies if you look hard enough. Especially in smaller and rural environments. Lots and lots of places have one gas station, one mechanic, one vet, one doctor, one diner and so on.
Your use of the word "require" seems difficult to implement. What if no-one wants to compete with me? If Apple stops making Macs, does MS have to stop making Windows?
Fiber internet is an interesting one - where the incumbents will "dump" (not necessarily below cost, though who knows, but below market rate) if they think you intend to compete with them.
HN is filled with stories of exorbitant rates from AT&T and Comcast that get slashed 70%+, speeds doubled, as soon as a newcomer is ready to offer fiber.
In fact, there was even a story here of a community where they formed a company that could not have done it, or not without a huge effort, but just hinted that they were exploring offering fiber to a town - and just that hint was enough for Comcast to say "wait, wait, we did the math and you all have been overpaying for internet!"
I agree that those are challenges. Maintaining competition in markets is well-studied; I wonder what has been found - what can be done, how can the scope be limited without failing on the outcomes, etc.
I am seeing a funny skit where the city is busting some bougie coop for having way too high of prices.
RealPage's competition were doing the exact same thing and completely escaped oversight or retribution. The rental market is corrupt and crooked nationwide, and these lawsuits flubbed a chance at making a real change.
Not that it wasn't predictable. Follow the money: who owns the property and REITs that rely on squeezing renters for every cent? Certainly not lawyers, judges, and politicians. /s
I leased at two RealPage properties for a combined 151 months. Both of them were confirmed to be colluding with one another and they were both confirmed as “high software collusion” by an expert. I calculated that the max payout I could get is ~$83,000 for the estimated amount I was overcharged rent for those ~12 years.
Can’t wait to get like $300 out of this. /s