[HN Gopher] I saw RealPage's crappy rent-jacking-up software so ...
___________________________________________________________________
I saw RealPage's crappy rent-jacking-up software so you don't have
to
Author : mkl95
Score : 447 points
Date : 2023-02-24 16:58 UTC (6 hours ago)
(HTM) web link (cohost.org)
(TXT) w3m dump (cohost.org)
| ROTMetro wrote:
| Just like last time RealPage came up, submit complaints to the
| FTC against that people! It only works if you actually use the
| system. The system isn't just magic.
|
| https://reportfraud.ftc.gov/
| azinman2 wrote:
| I worry about time passing for any existing stable industry where
| MBAs want to come in and "exploit inefficiencies." It reminds me
| of Warren Buffet noticing how he can keep raising the price of
| See's candies without losing customers. "Look at all that price
| elasticity l!" Meanwhile ordinary people become poorer.
|
| There are a lot of reasons for wealth inequality, but finding
| ways to extract more profits off the same product or industry
| erodes society over time. I don't know what could practically be
| done about all of this, but left unchecked, this will continue
| well into the future.
| tmpz22 wrote:
| The cannibalistic nature of Capitalism requires a "Big New
| Thing". The internet and tech at large has propped up power
| structures in the United States, for example I think without
| computing and the internet the American middle-class would've
| degraded much faster then it has.
|
| I don't know what the next "Big New Thing" will be, but I doubt
| it will have the same impact as computing/internet. I think
| things are just going to get pretty bleak for the lower classes
| as more and more of the world is consumed by oligopolies.
|
| Historically you get uprisings and revolts when the lower
| classes are trampled. I don't even think that can happen
| anymore with even small police departments getting tanks and
| access to drag-net surveillance at global scale.
| IncRnd wrote:
| > The cannibalistic nature of Capitalism requires a "Big New
| Thing".
|
| That's completely false. Just look at all the convenience
| stores spread across the world. Or, if my neighbor sells
| widgets, I can still go into the business of selling widgets.
| ethbr0 wrote:
| > _next "Big New Thing"_
|
| The internet was transformational because it (1) decreased
| communication friction by orders of magnitude & (2) enabled
| digital business operations, powered by computation instead
| of people.
|
| And specifically, these were both things that applied to
| _every business on the planet_.
|
| A lot of job roles disappeared as a result of that, but it
| made business _much_ more efficient and scalable. And allowed
| the remaining employees to be more highly compensated
| (same_revenue / fewer_employees = more salary space).
|
| Looking around for similar future potentials, I see 3.
|
| 1: Applied AI integrates itself into businesses
| (specifically, in finance, operations, and analytics)
| enabling another increase in efficiency by an order of
| magnitude
|
| 2: Remote working (and specifically international) allows use
| of a wider range of talent, at competitive salaries, which
| permits businesses to hire specific skillsets they previously
| lacked access to (didn't exist or unaffordable)
|
| 3: Driverless over-the-road freight vehicles increase
| shipping efficiency by an order of magnitude
| anigbrowl wrote:
| Japanese culture seems to have workarounds for this, with many
| businesses that have run for many centuries. It's harder to
| become rich in Japan; wealth concentrations are less
| encouraged, and many people are arguably underpaid to the point
| of exploitation. Political capital is (imho) much more
| concentrated, and the relative difficulty of wealth
| concentration reduces sociopolitical mobility. Arguably the
| social ethos is one of preserving a harmonious balance, partly
| because it's profitable for incumbents but perhaps also because
| it's emergent from geographic factors.
| azinman2 wrote:
| I've been saying for a long time that the U.S. likes to treat
| all problems as if they just need money, when in reality a
| huge portion of our societal ills are cultural and thus
| "free." Worse, most often money won't actually solve them at
| all and just wastes everyone's treasure and time. No one
| wants an honest debate or meaningful change, nor does it seem
| possible when everyone just wants to pick a team and parrot
| the teams opinions.
|
| Japan has many good and bad things about it. There is no
| utopia, and I'd rather live in the U.S., but I wish we had a
| bigger mix of harmony as a cultural North Star. Covid
| demonstrated to me over the past 3 years significant
| weaknesses of a individualist culture.
| anigbrowl wrote:
| I think it's a cultural hangover from getting a thinly
| populated continent for free at a stage in the
| civilizational game when you have all the technology to
| settle and develop it, but still early enough to feel like
| it's infinite in extent and that there's enough for anyone
| who wants it.
|
| An interesting comparison is Saudi Arabia, which liberated
| itself from external rule just a few years prior to the
| discovery of its vast oil reserves (and just a few years
| after the realization that oil would fuel industry for the
| century to come).
| hbrn wrote:
| Huh? Are you really saying expensive candies are causing wealth
| inequality?
|
| If a certain product has tons of loyal customers, it's
| creator/owner deserves all the wealth he gains off of it.
|
| Unlike candies, housing is essential.
|
| Edit: It's such a nice example of the first-world leftism:
| "those damn billionaires are stealing my... fancy candies".
| azinman2 wrote:
| But yet here the same principal is being applied to housing.
| Keep raising prices until you can't, but in the mean time,
| make people poorer.
|
| I don't know if See's candies are expensive now, but they
| didn't used to be. That's my point. Same with going to the
| ball game. Same with Disneyland (or at least not at this
| level). Movies. Going out to eat. Etc.
| hbrn wrote:
| Same principle, different markets, different outcomes.
|
| > Keep raising prices until you can't, but in the mean
| time, make people poorer
|
| That's a primitive model employed by people that are unable
| to think long term and at scale. More than half of US
| population lived in poverty in 1900. You know what changed
| that? "Keep raising prices until you can't" combined with
| competition.
|
| I want good products to have higher prices - this ensures
| I'll get access to even better products at lower price in
| the long term.
|
| There are dangerous exceptions of course, we learned what
| those are long time ago: essential goods and monopolized
| industries. Arguably, housing is both. Candies and "going
| out to eat" are neither.
|
| I couldn't care less if some billionaire is becoming 10x
| wealthier if I'm also becoming wealthier at the same time.
| Complain about inequality all you want, but if I was born
| 100 years ago, my diet would likely be shit. Today and can
| eat the same (or even better) food than the richest man in
| the world. Think about it for a minute.
| abfan1127 wrote:
| unaltered housing markets have the same market signals of
| candy markets. If housing is "artificially expensive", others
| can build new housing and collect all of the customers. In
| this instance, find "Real Page" communities and build similar
| housing next to them and offer 5-10% less than Real Page and
| take all of the renters. The big problem in housing is the
| NIMBY and regulations surrounding it.
| AlexandrB wrote:
| You would be right if housing location (mostly) didn't
| matter. But people generally want housing close to where
| they work and "location" is not a fungible input.
|
| To use an extreme example, if every landlord in Manhattan
| was using Real Page where would you build your competing
| housing? Manhattan is already pretty densely developed and
| housing in the other boroughs involves a much longer
| commute for someone working in Manhattan.
|
| Edit: Another point is that, unlike something like a web
| service, you can't collect _all_ the customers. You could
| only steal as many customers as your buildings can hold.
| Meanwhile the landlords using Real Page are collecting
| higher rents and can squeeze you out of building additional
| property by bidding up the cost of the land you would have
| to build on.
| mbesto wrote:
| > can keep raising the price of See's candies without losing
| customers. "Look at all that price elasticity l!" Meanwhile
| ordinary people become poorer.
|
| Minor nit - See's candies is a luxury good and _shouldn 't_
| affect the average customer from becoming poorer.
|
| Healthcare, hosing, education, etc. on the other hand...
| azinman2 wrote:
| Personally I don't consider it a luxury good. It's candy, not
| bread, but it's there for the masses. It's just an example
| being done to literally everything.
|
| Give the actual product didn't change, just the pricing, it
| actively takes money away from ordinary people and gives it
| to a few. Would you consider Disneyland similarly a luxury?
| It's sad how expensive it's gotten to keep Wall Street happy,
| meanwhile it allows for rich kids to go but not poor. Same
| with baseball games. Same with literally everything. Raising
| prices to make more profit disproportionally hurts the poor,
| and makes them poorer.
| carlosjobim wrote:
| Of course Disneyland is a luxury. Do you want to delete the
| word luxury from the human vocabulary? And for what?
| jefftk wrote:
| A 'luxury good' in the technical sense is one where when
| your income goes up your spending on that good goes up
| disproportionately. So:
|
| * Rice, Buses: 'inferior goods', because as people get
| richer they shift their spending to other goods.
|
| * Bread, Cars: 'normal goods', because as people get richer
| they spend more on them.
|
| * Caviar, Sports Cars: 'luxury goods', a category of normal
| goods where as as people get richer they spend a much
| larger percentage of their income on them.
|
| See's Candy is a high-end candy brand, and I would expect
| it to function as a luxury good here.
| azinman2 wrote:
| I wouldn't equate it with caviar or sports cars. It used
| to be a treat for the masses. My grandparents would often
| have a box, and were anything but luxury - sharecropping
| farmers retired and living on social security. I don't
| think they ever bought a "luxury" item. But perhaps this
| is regional as it's HQed in South SF.
| mbesto wrote:
| Luxury goods have a definition and has little do with how
| luxurious the potential buyer is:
|
| _In economics, a luxury good (or upmarket good) is a
| good for which demand increases more than what is
| proportional as income rises, so that expenditures on the
| good become a greater proportion of overall spending.
| Luxury goods are in contrast to necessity goods, where
| demand increases proportionally less than income._
|
| https://en.wikipedia.org/wiki/Luxury_goods
| jefftk wrote:
| I do think it's likely more of a luxury item nationally,
| yeah; I didn't realize you were talking specifically
| about Sees in its local area.
|
| But even then, I wouldn't be surprised at all if had your
| grandparents suddenly had 20% more money their spending
| on Sees would have gone up by more than 20%.
| cody_coconuts wrote:
| I think one of the problems is that people will treat these
| as the same. They follow Buffet's lead because the end goal
| is money. Everything else is a number on a spreadsheet
| sushid wrote:
| minor minor nits - it's price inelasticity and it's affect
| not effects
| mbesto wrote:
| fixed.
| marcosdumay wrote:
| > I don't know what could practically be done about all of this
|
| Make your government ensure market competition, and stop it
| from harming said competition an declaring winners.
| tracker1 wrote:
| Yeah... I think that the FTC needs to get back into trust
| busting a lot more frequently. I've been saying for over a
| decade, and amplified since covid supply issues, that the FDA
| should absolutely require dual sourcing and at least 50%
| domestic production. Many industries should require at least
| some percentage of domestic production, just for security
| concerns regarding supply.
| llampx wrote:
| I think the various government agencies, but especially the
| FTC, have taken the position that its America vs the world,
| and thus have looked the other way as tech giants have
| engaged in anti-competitive and consumer hostile behavior
| that earlier would have resulted in at least raps on the
| wrist, if not more (MS antitrust suit).
|
| Now the position seems to be to let them do whatever they
| want and shield them from other governments and competition
| if necessary.
| ChickenNugger wrote:
| That doesn't work anymore.
|
| > _Public Opinion Has "near-zero" Impact On U.S. Law._
|
| > _Professors Martin Gilens (Princeton University) and
| Benjamin I. Page (Northwestern University)'s study found that
| the number of Americans for or against any idea has no impact
| on the likelihood that Congress will make it law._
|
| > _One thing that does have an influence? Money._
|
| > _While the opinions of the bottom 90% of income earners in
| America have a "statistically non-significant impact,"
| economic elites, business interests, and people who can
| afford lobbyists still carry major influence._
|
| https://represent.us/americas-corruption-problem/
|
| America is a republic only on paper. It's a de facto
| oligarchy.
|
| I mean look at how TurboTax, Intuit, H&R Block have been able
| for decades to keep the IRS from doing our taxes for us.
| Literal rent seeking behavior and the _only_ people it
| benefits are the tax filing companies. Literally everyone
| else in America loses.
| https://sunlightfoundation.com/2013/04/15/tax-preparers-
| lobb...
|
| The biggest trick capitalism ever pulled is convincing people
| that it's not a system of government where whoever has the
| most money, rules. The plague of rampant regulatory capture
| just further proves it.
| ethbr0 wrote:
| This.
|
| The problem is _not_ that companies are able to increase
| prices and improve their margins. That 's _good_!
|
| The problem is that our institutions (government, journalism,
| small business entrepreneurship) have reneged on their role
| of promoting competition, leading to a lack of fear of
| competitors in companies, leading to an increased ability by
| them to increase prices.
|
| There should be more self-reflection on why price increases
| are possible, and redress of _those_ causes, versus
| attempting to treat the symptom.
|
| #1 place to start looking -- how to balance the ultra-high
| efficiency of consolidated firms with their ability to deploy
| overwhelming capital in novel industries to crush
| competition.
|
| Or in other words: "How do we make it so that starting up a
| Facebook or Google or Microsoft competitor today is a
| reasonable?"
|
| E.g. instead of putting price caps on necessary-but-low-
| volume medications, look into why it was able to collapse
| into a single-supplier market
| zopa wrote:
| > The problem is not that companies are able to increase
| prices and improve their margins. That's good!
|
| That's going a bit too far. Under perfect competition there
| aren't any profit margins: everything sells at marginal
| cost. Real-world markets won't be like this, but they can
| get reasonably close. If there are large and increasing
| profit margins, that's a sign something has gone wrong.
|
| Also, we need to be realistic about natural monopolies.
| Sometimes the competition we want isn't in the cards, and
| treating the symptoms really is the right answer. If that
| necessary-but-low-volume medication has sharply declining
| costs with increasing production, as many things do, there
| just aren't going to be enough suppliers to build a
| competitive market. Competition policy is great, but it
| can't do everything.
| anigbrowl wrote:
| _Under perfect competition there aren 't any profit
| margins: everything sells at marginal cost._
|
| True, but that includes the cost of capital, so liquidity
| theoretically remains adequate and capital
| provision/replacement is just _a_ business function
| rather than _the_ business function.
|
| The problem with capitalism is that it's totalizing; the
| idea that the whole point of society should be making
| more and more wealth forever is kind of ridiculous when
| you think about it, like deciding that it'd be great for
| your social body to get diabetes. It's ridiculous in the
| same way that pure laborism would be (everyone should
| work hard, never mind at what) or pure consumerism
| (everyone should have all the stuff they want, all the
| time).
| ethbr0 wrote:
| Point. I should have more accurately said "The problem is
| not that companies are _attempting_ to increase prices
| and improve their margins... "
|
| Obviously the goal of a functioning system would be that
| they run into competition restraining them from doing so.
|
| And 100% agreed on natural monopolies, although I believe
| the classification should be the exception rather than
| risk being a rule for "things we don't like."
| MichaelZuo wrote:
| Under perfect competition, no one will invest in
| anything. So it does not seem very desirable.
| sixo wrote:
| The need to actively defend competitiveness from erosion
| seems like a vulnerability in the capitalist system.
| Anticompetitive behavior is a natural tendency in the system;
| it is advantageous for everybody all the time to be doing as
| much of it as they can get away with, and the gov has to
| actively exercise energy to determine when it gets too bad
| and needs to be reversed. Governments are fundamentally not
| very good at holding a line like this, they get tired... they
| greatly _prefer_ to let things just play out on their own.
| They prefer to have a private company managing e.g. a local
| utility monopoly rather than do it themselves.
|
| It always feels like there is some element that should exist-
| by-default in our economic system to organically oppose
| monopolistic behavior, without active government attention.
| Roughly this looks like consumer unions: the more
| monopolistic an organization, the more it looks like a
| governmental agency, and correspondingly the more power the
| public should have over it--putting a ceiling on the ability
| of private enterprises to extract value from the public.
| coryrc wrote:
| "Consumer surplus" is the term you're looking for. Minimizing
| consumer surplus leaves you vulnerable to undercutting by
| competitors.
|
| There are plenty of competitors to See's candies. Just buy from
| them.
| azinman2 wrote:
| You're missing the forest for the tree.
| MichaelZuo wrote:
| Can you elaborate?
| some_random wrote:
| All their competitors realize they can do this and begin
| raising their prices too
| MichaelZuo wrote:
| Which would be price-fixing and illegal?
|
| I understand there's no way to 100% guarantee such
| actions will be punished, if it does occur, but clearly
| it's already not accepted by society.
| coryrc wrote:
| It's not price-fixing if they don't communicate. AWS is
| fully allowed to publicly publish their planned price
| increases for the next 3 years and Azure is allowed to
| react to that information by doing the same thing -- or
| announce they won't or whatever.
| wahnfrieden wrote:
| Safety disclaimer: message deleted via editing
| MichaelZuo wrote:
| > the biggest grocers in canada were guilty of price
| fixing
|
| Can you link to the court case?
| wahnfrieden wrote:
| cut it out
| MichaelZuo wrote:
| By 'cut it out' do you want me to stop asking my previous
| question?
|
| If so, you are free to ignore it.
|
| You also surreptitiously edited your previous comment
| without informing readers.
|
| FYI For small changes due to grammatical errors that may
| be acceptable, but a substantial change should always be
| indicated.
|
| (And now that I'm looking at the user profile the about
| description is just "go away" which makes this action
| seem suspicious.)
| azinman2 wrote:
| Saying just buy from a competitor to See's is completely
| missing the point. The point isn't See's candies
| specifically (which I'm so surprised everyone really held
| onto), but rather the mindset of the MBA type (doesn't
| matter if they actually have an MBA) that says let's just
| keep increasing prices on this commodity forever until
| we've squeezed all the juice, and once we have, we'll do
| it some more. When you apply this to every sector, over
| time you disproportionally hurt those at the bottom and
| make them poorer. You also cause inflation, which
| dwindles the power of savings. This software in the
| article is doing it for housing, and worse, it seems that
| it does it more than a human would. You especially see it
| in entertainment, where now a basketball game is
| something well beyond the capacity of most. It's very
| unfair to me as a society that we say only rich kids can
| go to Disneyland, and NBA game, or a concert. Or if they
| do, it's far less often and they've had to save for a
| long time for it. But you also see it with eating out,
| car insurance, almost every good except fast fashion, TVs
| (which are largely subsidized by monetizing your
| viewing), and some other consumer electronics. The
| percent of people's average income spent on most sectors
| has gone up over time.
|
| I'll leave you with this:
| https://youtu.be/X29p13cAT1g?t=17
| MichaelZuo wrote:
| 'MBA types' have been punished for illegal activity, such
| as price-fixing, in the past. No one has granted them
| immunity from all future prosecution. So then what's your
| point?
|
| That currently legal actions such as raising prices
| because a brand wants to move up-market should be made
| illegal?
| metadat wrote:
| Ticketmaster is still going strong with no truly serious
| threats to their Enshittififation business plan. Seems
| pretty immune to me.
| azinman2 wrote:
| I don't know what I said that made you jump to the
| conclusion about legality. I never suggested it was
| illegal. I'm suggesting despite legality, society suffers
| and wealth inequality grows.
| MichaelZuo wrote:
| The implications of your previous comment suggests so?
|
| > Saying just buy from a competitor to See's is
| completely missing the point. The point isn't See's
| candies specifically (which I'm so surprised everyone
| really held onto), but rather the mindset of the MBA type
| (doesn't matter if they actually have an MBA) that says
| let's just keep increasing prices on this commodity
| forever until we've squeezed all the juice, and once we
| have, we'll do it some more. When you apply this to every
| sector, over time you disproportionally hurt those at the
| bottom and make them poorer. You also cause inflation,
| which dwindles the power of savings. This software in the
| article is doing it for housing, and worse, it seems that
| it does it more than a human would. You especially see it
| in entertainment, where now a basketball game is
| something well beyond the capacity of most. It's very
| unfair to me as a society that we say only rich kids can
| go to Disneyland, and NBA game, or a concert. Or if they
| do, it's far less often and they've had to save for a
| long time for it. But you also see it with eating out,
| car insurance, almost every good except fast fashion, TVs
| (which are largely subsidized by monetizing your
| viewing), and some other consumer electronics. The
| percent of people's average income spent on most sectors
| has gone up over time. I'll leave you with this:
| https://youtu.be/X29p13cAT1g?t=17
|
| It appears to be trying to argue some point, advance some
| claim, advocate for some cause, etc., relating to
| organizations increasing their pricing for their goods
| and services.
| hbrn wrote:
| Funny that you decided to include fast fashion. Fast
| fashion by definition is a cheap alternative to high
| fashion. Similarly, there are cheap alternatives to all
| of the goods that you mentioned.
|
| I suggest you to get out of your first-world bubble.
| Somehow you seem to think that everyone is entitled to
| _luxury_.
|
| > The percent of people's average income spent on most
| sectors has gone up over time.
|
| First of all, that's a weird statement. The percent of
| people average income spent on most sectors is close to
| 100%. _Ratios_ will change, but they don 't indicate
| anything if you don't know how to read them.
|
| What's your interpretation of this graph? Is it
| "billionaires are making movies more expensive and people
| are forced to save on food"?
|
| https://www.ers.usda.gov/webdocs/charts/58367/food-
| prices_fi...
| kortilla wrote:
| That's working as intended. If you expand the profit margin you
| just expose yourself to competitors.
|
| See's candy isn't the only candy company, nor is candy a
| necessity.
| solarmist wrote:
| I think erosion is a good word for this.
|
| How do we deal with erosion in other situations?
|
| Another thought I had just now is that historically prices were
| static until an event happened to cause in increase, now prices
| are becoming dynamic and monotonically increasing unless an
| event happens.
|
| Edit: The price collusion is greed/growing pains for prices
| being dynamic by default.
|
| This is another social norm that is being discarded by modern
| society. You don't go to a store two days in a row and see
| different prices without a good reason.
| mrexroad wrote:
| > This is another social norm that is being discarded by
| modern society. You don't go to a store two days in a row and
| see different prices without a good reason.
|
| ... Unless that "store" is Amazon, but maybe that's in
| support of your point as it's "modern" relative to legacy
| retail. However, in this case it's maybe more that pricing
| reflects fundamental shifts in the
| marketing/retail/fulfillment backend over the past decade-
| plus than a "social norm" being discarded. No profit seeking
| business would leave money on the table willingly --- greed
| has always been the default, new tools will always come along
| to enable it as old tools become less effective.
|
| Prices should roughly double every two decades with "normal"
| inflation. However over past decade or two we haven't quite
| had "normal inflation" and we've also had somewhat weirdly
| static prices for some consumer goods (thanks easy capital +
| efficiencies from MBAs/offshoring/etc?) and yet unhinged
| price increases in other areas (college ed, medical care).
| The overall system has some rebounding/balancing to go (both
| at micro and macro level) before pricing changes have a
| clearer relationship to the fed rate. There's an entire
| generation of people only knowing zero-percent-interest and
| sub-two-percent inflation rates as the norm and some thinks
| those days will return once [whatever now is] passes.
| solarmist wrote:
| Sure, you're explaining the mechanism of what I'm talking
| about.
|
| And yet this generation of low interest rates has gotten
| progressively and significantly poorer than previous
| generations. There's lots of pieces of this at work.
| [deleted]
| RobotToaster wrote:
| >How do we deal with erosion in other situations?
|
| We drop rocks on it?
| brundolf wrote:
| Plant grass [roots]
| macintux wrote:
| Or, sadly, plant invasive species that then destroy local
| ecosystems.
| mrexroad wrote:
| Like tik-tok?
|
| Half kidding, half not.
| tracker1 wrote:
| I would not advocate for such a thing... but I'm honestly
| surprised that there haven't been attempts on the lives of
| executives/management/boards of companies like in TFA... I
| mean the whole "one bad day" is all it takes.
| People/society seems to be far more resilient than people
| give credit for... of course, this is countered by the
| massive homeless population. Maybe we're just far more
| docile.
|
| It's hard to imagine this being tolerated a century or more
| ago.
| snerbles wrote:
| We have our Big Macs and Netflix. For now.
|
| Of course, that relies on the bread of the bread and
| circuses staying cheap enough to keep the plebians
| pacified. If not...a recent example would be the Arab
| Spring.
| solarmist wrote:
| They live behind a bland cover, so their names aren't
| known. Also, they don't seem evil enough. They mostly
| seem like middle management types.
|
| In other words, they blend in too well.
|
| > Maybe we're just far more docile.
|
| I think it's far more sinister than that. People and
| companies have learned how far they can push things
| without invoking outrage and how to release tensions by
| pretending to have a change of heart. So now they're
| constantly toeing the line and while each push is small,
| they are almost constant. Resulting in far greater
| violations in total.
| tomrod wrote:
| > I think erosion is a good word for this.
|
| The term has a rich history under the phrase: "consumer
| surplus."
| solarmist wrote:
| Or "poor(er) people having some money."
| cscurmudgeon wrote:
| See's candies are not essential goods or service. This is a
| prototypical first-world problem.
|
| Capitalism has lifted hundreds of millions out of poverty in
| the last century by essentially targeting inefficiencies.
|
| But here we are worrying about price of high-end candies.
| cjbgkagh wrote:
| It's an erosion of good will, lots of companies go through
| build vs exploit cycles where they build up a brand with
| marketing, good quality, and value. Then they exploit it by
| cutting any of those. As it's difficult to know the maximally
| profitable steady state it's much easier to slowly oscillate
| between the two taking measurements on the way. A savvy
| consumer can pay attention to this and specifically try to buy
| from companies in a build phase. Often less savvy consumers get
| stuck with brand loyalty and they get exploited. Unless of
| course the company is a monopoly or oligopoly at which point
| it's most profitable to stay in the exploit phase. It should be
| noted that some times prices in a build phase are not long term
| sustainable without a subsequent exploit phase.
| pixl97 wrote:
| >try to buy from companies in a build phase.
|
| It is a lot of work as the big companies will buy brands with
| good names because of this reason (and will proceed to make
| them shitty).
|
| After this phase the few remaining companies will attempt to
| find a way to entrench a regulatory monopoly and survive off
| of rent seeking behaviors rather than actual work.
| Karellen wrote:
| Cory Doctorow calls this "Enshittification":
|
| > Here is how platforms die: first, they are good to their
| users; then they abuse their users to make things better for
| their business customers; finally, they abuse those business
| customers to claw back all the value for themselves. Then,
| they die.
|
| https://pluralistic.net/2023/01/21/potemkin-ai/
|
| I think your idea of this happening in a cycle, with the
| company switching back to diverting its surplus back to its
| customers at the end before going back around again is an
| interesting one. I don't doubt it's possible, and that some
| companies have pulled it off from time to time. But the
| ability to win back trust from customers are you've spent two
| phases of the cycle abusing them seems like a tough hill to
| climb, and I think it's likely a lot of companies will fail
| there.
|
| It's probably easiest for a company at the end of the cycle,
| to be acquired by a new up-and-comer who is still on its
| first round of diverting surpluses to its customers, to best
| leave its toxic reputation behind.
| cjbgkagh wrote:
| You make a good point, I do think having a dysfunctional
| financial industry makes the build -> exploit -> sell/dump
| such an attractive option that it would be crazy not to
| chose it. The problem is that people are buying these
| companies at overvalued prices. Probably a side effect of
| low interest rates among other things. In theory those who
| keep buying overvalued companies would long term lose money
| and will be less able to keep doing so. That doesn't work
| with negative real interest rates.
|
| I think in software the exploit phase negatively impacts
| the culture of the developers in a way that is difficult to
| recover from. The best have left and the most of those who
| remain probably should be fired. Probably easier to start a
| new company from scratch, "Don't boil the ocean".
|
| Maybe a good example could be in chip manufacturing where
| hiring someone like Jim Keller sends a signal that the
| company is entering a build phase.
|
| Lacoste is a brand that was exploited to near death and
| explicitly went through a build phase a few years ago and
| revived itself. Huge marketing spend, lowered prices to
| target younger people, and I have no idea if they changed
| quality - not my field. I think it's more obvious trend in
| fashion where the underlying product doesn't fundamentally
| change.
|
| Then there are B2B markets which have high volumes and low
| margins and in these industries reputations would be
| paramount and the customers more savvy and less
| exploitable. It would make sense to try to find a
| profitable steady state as soon as possible and only make
| minor changes.
|
| So I guess the build-exploit cycle makes sense if assuming
| an efficient markets devoid of people with money willing to
| over pay for things they shouldn't.
| wpietri wrote:
| Yeah, private equity is a plague on humanity. I've heard so
| many stories of industries made worse for workers and customers
| just so some dicks can extract a steady stream of cash along
| the way to destroying everything.
|
| This is a shame, because I think markets can be amazing engines
| for optimization. But unless we're going to work to make sure
| there are strong markets for a given good, we're not going to
| see much of that.
| matt3210 wrote:
| #vanlife !!
| duped wrote:
| The software engineers who develop this should be ashamed of
| themselves. You're making the world worse.
| zethus wrote:
| Hey now, they're just trying to make enough money to pay their
| ever-increasing rent! /s
| htag wrote:
| I know plenty of software engineers that are also landlords. It
| seems like a clever sort of hack to earn a paycheck from a
| company that is increasing the value of your investments.
| [deleted]
| indymike wrote:
| This is just naked collusion as a service. The lawsuits will be
| spectacular.
| tristor wrote:
| Software like this is why I agreed to a rent of $X prior while
| applying for a lease, and after income verification was returned
| a rent of $X+30% on the final lease agreement, with an excuse
| that "it took us several business days to process and rents are
| recalculated daily based on current market conditions." Which, I
| knew, intuitively was utter bullshit and they just wanted to fuck
| me over some more than they already were because they found out I
| made decent money as a tech worker. Of course, I'm in a bad
| rental market, and this place was a better option than others, so
| we sucked it up and took it, and that's why I'm paying nearly
| $4k/mo in rent when it should be around $3k/mo in the current
| market (and since prices have fallen, probably closer to
| $2500/mo).
|
| It's super-scummy behavior and if it weren't "washed" through
| this software, would be blatantly illegal. Why do we allow these
| "loopholes" where a company exists to essentially help other
| companies directly break the law in spirit, but barely not in
| letter?
| bogwog wrote:
| I wonder if there are other industries engaging in this kind of
| price fixing scheme under the guise of "AI SaaS"?
| cobertos wrote:
| The parking lots owned by an entertainment company in the large
| city near where I live (Detroit) prices all their parking lots
| dynamically. There's a TV at each unmanned lot with a different
| price dependent on the distance from the event (different
| venues at different distances) and depending on event and time.
| Seems made to extract as much as absolutely possible.
| notahacker wrote:
| I suspect there's plenty providing market value estimates based
| on what other customers are pricing at, but the computerised
| voice begging people not to price below what the algorithm says
| and requirements for property managers to seek "approval" to
| vary their own prices are unusually blatant...
| bongobingo1 wrote:
| Could you leverage it to make money?
| xwdv wrote:
| Of course. When other landlords are jacking up the rental
| prices in price fixing schemes you can undercut them with
| more reasonable profit margins and steal more business.
| notahacker wrote:
| This is a little difficult if you don't own rows of empty
| houses though...
| xwdv wrote:
| If it was easy everyone would do it.
| anonymouskimmer wrote:
| This is exactly what RealPage is doing. It's asking rental
| companies to increase prices. It's then turning around and
| marketing those percentage increases as a reason to use its
| software.
|
| So yeah, "you" can, if you're one of those AI SaaS companies.
| gobengo wrote:
| look into the software your HR dept uses to know how much to
| pay you
| Spivak wrote:
| If you want a searchable term they're called "compensation
| management."
| matsemann wrote:
| In sports betting, you can buy a service that tells you what
| you should set your odds at [0], in order to match the market.
| Since hundreds of betting sites buy from the same company, they
| quickly converge on some set price.
|
| [0]: https://www.betradar.com/betting-services/live-odds-
| service/
| jker wrote:
| And I thought I couldn't hate sports betting any more than I
| already did. The ghost of Walter Annenberg is still haunting
| that slimy industry.
| munificent wrote:
| _> Specifically, every morning, RealPage provides participating
| Lessors with recommended price levels. ... If Lessors wish to
| diverge from the "approved pricing" they must submit reasoning
| for doing so and await approval. ... But RealPage emphasizes the
| need for discipline among participating Lessors and urges them
| that for its coordinated algorithmic pricing to be the most
| successful in increasing rents, participating Lessors must adopt
| RealPage's pricing at least 80% of the time._
|
| It's hard to imagine a clearer, more blatant description of
| cartel price fixing.
|
| This is like calling your pyramid scheme "Pyramidal Inc.".
| mattgreenrocks wrote:
| Gotta love how capital gets all high and mighty about unions,
| while getting repeatedly caught with various forms of
| collusion, such as the Big Tech salary collusion a decade ago
| or cartoon-villain-bad levels of price fixing as we see here.
| Basically, it boils down to, "do as I say, not as I do."
|
| Is it possible for the suit to result in charges brought
| against all users of RealPage? They are active participants,
| after all.
| gwright wrote:
| I fail to see why unions need to be brought in to this issue.
| Not every problem needs to be framed in the form of class
| struggle. Exactly what sort of "union" would represent
| tenants? It just seems like a unhelpful way to discuss this
| particular issue.
| 8note wrote:
| Worker unions have provided housing to their members
| before.
|
| The capitalist class is likely to be the owner both of the
| corporation you work for, and of the housing you live in,
| so you have the same power struggle with the same people.
|
| People owning their own homes, and small landlords push
| back against that, but the trend is that the owning class
| owns everything
| closeparen wrote:
| https://en.wikipedia.org/wiki/Tenants_union
| gwright wrote:
| That seems like an unhelpful overloading of the word
| "union".
| yamtaddle wrote:
| https://en.wikipedia.org/wiki/Students%27_union
| skrtskrt wrote:
| yeah why, when discussing large powerful groups of capital
| owners colluding to screw the working class, why would we
| discuss the most successful tool at stopping them: groups
| of working class people large enough to claw back a tiny
| amount of power?
| d0gsg0w00f wrote:
| Well, cartels aren't capitalism.
|
| Capitalism would be someone coming in and realizing the
| prices are inflated and undercut the rent prices while still
| being profitable.
| mola wrote:
| Capitalism is where the capital hold the power. And not
| surprising power likes to accumulate and be sustained by
| every mean possible
| gwright wrote:
| I've been convinced lately that we have no collective
| agreement about what the term "capitalism" means any
| more. Yes there are text book definitions but none of
| those are used in typical public discussions like HN.
|
| Power tends to accumulate when government actions
| restrict voluntary trade that would have otherwise
| proceeded. That is a characteristic of governments not of
| "capitalism", IMHO.
| Kye wrote:
| There is no clear line between government and business in
| a place where spending money is protected speech. Much of
| the US government at all levels, but especially state and
| local, is fully captured by private interests.
| CPLX wrote:
| Capitalism doesn't just happen. The natural state of nature
| is cartels, that's what markets will trend towards without
| government regulation.
|
| If this effect isn't intuitive to you, consider what
| happens when the market for something is completely removed
| from government involvement, like the global market for
| cocaine. Or a market that develops in the absence of any
| kind of centralized authority, like Somalia.
|
| That's what happens to every market unless a state
| intervenes. The invisible hand of the market trends towards
| long term warlord/mafia type arrangements unless the public
| is organized enough to stop it.
| JackFr wrote:
| > like the global market for cocaine.
|
| The global market for cocaine is highly regulated by very
| violent men with guns.
|
| It is for that reason that drug consumers favor
| legalization but drug suppliers oppose it.
| CPLX wrote:
| All global markets are highly regulated by very violent
| men with guns.
|
| The interesting part is who those men with guns are
| accountable to.
| drewcoo wrote:
| Governments normally maintain monopolies on violence.
| colpabar wrote:
| Okay, if that's the case - why isn't that happening, and
| what should be done to make it happen?
| scatters wrote:
| NIMBYs. Hopefully the Builder's Remedy upcoming in
| California will demonstrate whether restrictive zoning is
| indeed to blame.
| gwright wrote:
| You need competition, which means you need developers to
| add more housing units, which means you need to change
| the regulations that prevent that from happening.
|
| Problems in real-estate are almost always government
| created IMHO and not "capitalism".
| drewcoo wrote:
| > Problems in real-estate are almost always government
| created IMHO and not "capitalism".
|
| But who buys the government?
| User23 wrote:
| There are plenty of housing units in the USA. Housing is
| extremely affordable in parts of many major American
| cities such as Detroit and Baltimore to name just a
| couple. For example you can buy a house in lovely
| Baltimore for under $25,000 in a neighborhood with
| amenities like a walkable park, and tennis and basketball
| courts[1]. The complaint is never really "housing isn't
| affordable," it's more along the lines of "I can't afford
| to live in the most desirable coastal real estate in the
| entire world" or "I can't afford to live in a safe place
| with a good school district" (a classism/racism dog
| whistle if ever there was one).
|
| [1] https://livebaltimore.com/neighborhoods/madison-
| eastend/
| mathgorges wrote:
| As a native Detroiter I can confidently tell you that any
| house you can get for $25,000 will come with
| externalities that will make the house undesirable on
| balance.
|
| Large back tax bill, lack of city services (e.g. if live
| in Springwells, good luck getting a reasonable response
| time from Detroit PD if you're being burgled) and an
| unsafe transit situation are the most common ones I can
| think of.
|
| The houses are cheap for a reason. Its not as though
| Detroit is filled with provincial oafs that don't know
| what they're selling.
| pixl97 wrote:
| Ah, yes, I found that $25k house in Baltimore...
|
| https://www.zillow.com/homedetails/2011-E-Lafayette-Ave-
| Balt...
|
| I see some 'houses' in the area that you're looking at
| for $130k, built in WWII and likely have heating bills
| high enough to bankrupt the wealthy unless the place is
| ripped apart and modern insulation is put in.
| skrtskrt wrote:
| the end state of capitalism is just companies big enough
| to regulate competition out of existence. Capitalism does
| not mean free market.
| arrosenberg wrote:
| What stops the new units from being added to the cartel?
| Cartel members would be the best positioned to acquire
| them.
|
| The government enforces capitalism laws (rather than
| socialist or chartalist) so how do you distinguish?
| gwright wrote:
| What are "capitalism laws"? My point is that the
| government is preventing the transactions. Doesn't matter
| if we are talking about a republic, a parliamentary
| system, a monarchy, a socialist country, authoritarian,
| feudal, local gangs, organized crime, etc.
|
| It requires _power_ to prevent voluntary transactions and
| that comes in lots of flavors.
| arrosenberg wrote:
| I misspelled capitalist - defined as laws that benefit
| those with capital.
|
| My point is you are distinguishing between government and
| capitalism - capitalism is an attribute of the government
| and power structure. The people with capital are the ones
| preventing the transactions (to their own benefit of
| course).
| gwright wrote:
| > capitalism is an attribute of the government and power
| structure
|
| I don't think that is a common formulation of the idea of
| "capitalism".
| arrosenberg wrote:
| Enlighten us then? What is the _common_ formulation
| according to you?
| topaz0 wrote:
| Marxist analysis isn't _that_ rare in my experience.
| hbrn wrote:
| > What stops the new units from being added to the
| cartel? Cartel members would be the best positioned to
| acquire them.
|
| If competition is unrestricted, cartels are unstable
| structures. It only takes one member unwilling to join
| cartel to ruin them. That's why drug cartels are killing
| each other and smaller competitors.
|
| There are exceptions, but that's where antitrust laws
| come in.
| munificent wrote:
| _> It only takes one member unwilling to join cartel to
| ruin them._
|
| It only takes one member _in an enviroment protected from
| all other actions of the cartel_ to ruin them.
|
| If all economic actors only interacted in the marketplace
| itself, then, yes, cartels are unstable. But businesses
| are not spherical cows in a vacuum.
|
| In practice, cartels can exert all sorts of forces to
| insulate themselves. While most don't go to the extreme
| of drug cartels which you should note are quite adept at
| maintaining their stability, they can still to plenty
| without resorting to violence. Off the top of my head:
|
| * Economies of scale, barriers of entry, and other Econ
| 101 stuff that privilege large entrenched actors over
| upstarts.
|
| * Threatening to stop giving contracts to builders if
| they work with the competitor.
|
| * Threat of social sanctions since many of the people who
| run these businesses all know each other and play
| together. Pretty awkward to break up a cartel at 10am and
| then go to your regularly scheduled golf game with its
| owners at 4pm.
|
| * Buying smaller competitors outright before they defect.
| scatters wrote:
| At some point the cartel will run out of capital. Before
| then, the mispricing becomes evident enough that
| speculators come in on the other side and burst the
| bubble.
| maxsilver wrote:
| > At some point the cartel will run out of capital
|
| They can't really though, at least not anytime soon --
| the cycle itself gives the cartel more capital. If they
| buy units as they come onto the market, they hold the
| equity in those units, which they can instantly mortgage
| out to get more capital, which they can spend on more
| units, which they can instantly mortgage out to get more
| capital. This is especially true when interest rates are
| low, (the lower rates are, the cheaper this cycle is to
| continue -- at interest rates _below_ the real inflation
| rate, they effectively get given free money to do this)
|
| And yes, it exposes them to the risk that _eventually_
| this bubble could pop, but it could take many years
| (decades even?) before that happens.
| pixl97 wrote:
| The (rental) market can remain irrational far longer than
| you (the renter) can remain solvent.
| gwbrooks wrote:
| More than 40% (2022 data, NAHB research) of the cost of
| new multifamily development is tied to
| regulation/permitting/zoning.
|
| That number has climbed faster than inflation for some
| time and is the largest driver of increased multifamily
| development costs.
|
| Want cheaper housing? Make it easier to build housing.
| modriano wrote:
| From the linked curbed article:
|
| """One night, on my way home from work, I pushed the
| wrong elevator button and got out on the floor below mine
| without realizing it. My key wouldn't fit the lock to
| what I had assumed was my door, so I turned the knob and
| stepped, to my astonishment, into a completely empty,
| totally untouched one-bedroom. I turned around and
| beelined to the elevator, worried that I'd get busted for
| trespassing, when I noticed strips of masking tape
| covering the door frames on all of the other (presumably
| empty) apartments on the floor.
|
| This was how I became aware of "warehousing," the
| practice by which landlords keep unrented apartments off
| the market to create artificial scarcity. Building owners
| have always done this, especially in new constructions
| with lots of virgin inventory, because why give renters
| the upper hand if they don't have to?
|
| But they really started doing it during the pandemic. On
| a 2022 episode of the real-estate-industry podcast
| Talking Manhattan, Gary Malin, COO of the Corcoran Group,
| made a surprising claim: "At one point during the
| downturn, the vacancy rate in the city was close to 25
| percent," he said. "You had owners who were sitting on
| hundreds if not thousands of empty apartments.""""
|
| If there are extremely wealthy entities that can afford
| to soak up enough supply to meaningfully impact market
| prices, making it easier to build new housing is likely
| part of the equation, but it may not be the silver
| bullet. I don't know how many units are held unoccupied,
| but as someone from Detroit, I'd advise against letting
| supply get too far ahead of demand (Context: a major
| housing surplus developed in Detroit as the population
| dropped from ~2M in 1960 to ~0.6M today, and this surplus
| destroyed the value of homeowner's equity and lead to
| abandonment, blight, and massive arson rates).
| dublinben wrote:
| The pandemic may have been a one-in-a-lifetime decrease
| in demand for housing in New York City. Even if the
| vacancy rate did reach 25% at one point, the price of
| apartments correspondingly plummeted from the winter of
| 2020 to 2021 by 24-33%, depending on size. [1]
|
| Now that demand has returned, and vacancy rates have
| plunged to their normal sub-5% level, rents in the city
| have hurtled back to their 2020 prices or even higher.
| [2]
|
| This is exactly what economics would predict of a market
| system with constrained supply. Demand is almost never as
| elastic as we recently experienced, and this only serves
| as further evidence of nonexistent undersupply being the
| primary cause of high prices. Not "warehousing" or
| hoarding of vacant housing that already exists somewhere.
|
| [1] https://www.zumper.com/rent-research/new-york-ny
|
| [2] https://www.nyc.gov/site/hpd/news/023-22/hpd-
| releases-initia...
| modriano wrote:
| Another quote from the curbed article cited by the main
| post:
|
| """Look, it's possible that my suspicions are baseless
| and all of these buildings are full. Maybe their tenants
| really did come flooding back to New York last year.
| Maybe some are former couples who broke up during the
| pandemic and needed twice as many apartments and others
| are remote workers from Milwaukee or Akron evading city
| taxes by claiming residency in their old states. Maybe
| they came without any furniture so they didn't have to
| hire movers. Maybe they're homeschooling their kids,
| taking Ubers instead of the subway, avoiding restaurants,
| and abstaining from all other activities that would
| expose them to public data collectors. Weirder things
| have happened here. But if you meet any of these people,
| give them a change-of-address form for me. They're
| probably missing some good mail."""
|
| One of the central points of the main article
| (exemplified by the opening sentences quoted below) is
| that demand hasn't returned.
|
| """I was impressed by most of this article in Curbed,
| which did some actual reporting on the discrepancy
| between landlords saying rents in New York City were
| surging "because people came flooding back" and the fact
| that, according to all data, people did not actually come
| flooding back. The reporting goes to impressive shoe-
| leather lengths -- the author even contacts the New York
| City Water Board for clarification on how much waste they
| processed in 2021!"""
| JohnFen wrote:
| That's more of a free market thing. "Free market" and
| "capitalism" are distinct concepts that can, but don't have
| to, coexist.
| traverseda wrote:
| Land is pretty much the definitive natural monopoly. If you
| want land rights you're going to end up with monopolies
| formed around the use of land and natural resources.
| wwweston wrote:
| "Capitalism" can be a lot of things, including things which
| privilege capital without regard to market freedom for
| labor or consumer.
|
| Cartels certainly aren't free markets. To keep those you
| need policy which keeps them that way.
| [deleted]
| JoeJonathan wrote:
| The Dutch East India Company is often considered integral
| to the history of capitalism, if not the start of
| capitalism itself, and was granted a 21-year monopoly on
| trade by the Dutch government.
| JackFr wrote:
| The real reason the Dutch East India Company is integral
| to the history of capitalism has less to do with trade
| and more to do with the innovative legal structure which
| for the first time separated the owners from the
| managers, and unlike all prior enterprises allowed for
| tradable claims on the ownership in the form of equity
| shares rather than an ownership governed by a
| partnership.
|
| The problem with using 'capitalism' in discussions like
| this is that there isn't a precise definition of it. To
| some people it simply means private ownership of the
| means of production, to others in includes free trade, to
| others (and to my thinking, the most precise, but YMMV)
| its about the separation of management and ownership and
| tradable claims on the firm.
| scatters wrote:
| The Pythagoreans are often considered integral to the
| history of mathematics, if not the start of mathematics
| itself, and they murdered the guy who proved that the
| square root of two is irrational.
| ahoy wrote:
| And are they not still mathematicians?
| SMAAART wrote:
| George Orwell, of 1984 fame, would approve of this
| comment.
| wwweston wrote:
| Hard to say for sure, but probably correct: Orwell seemed
| to be a critic of totalist ideologies, certainly
| totalitarian communism but he also had words for
| unrestrained laissez-faire capitalism.
| ahoy wrote:
| How convenient it is that, whenever capitalism has a
| negative effect, people rush to say "oh but its not real
| capitalism, they're doing it wrong. That would never
| happen"
| yamtaddle wrote:
| I think it's weird people are stuck on treating the real-
| world system of capitalism and ideals about how markets
| should work as synonymous. It's possible to criticize
| capitalism for its failures without _necessarily_
| questioning the underlying ideals about markets. They 're
| not the same thing. Markets and market-thinking predate
| capitalism, and exist in and affect all kinds of non-
| capitalist systems, today and historically. They aren't
| _solely_ a feature of capitalism, and capitalism isn 't
| the same thing as markets.
| hbrn wrote:
| I don't know any capitalism advocate that claims
| capitalism is perfect. It just happens to be way better
| than all of the suggested alternatives.
|
| And your No True Scotsman example is typically heard in
| reference to communism in USSR/China.
|
| I'll choose my billionaires over famine any day.
| try_the_bass wrote:
| No, that's "free market economics", which is slightly
| different.
|
| Cartels are very much capitalist, because they create more
| profits for everyone involved. The more parties you get
| involved, the better it is for all of them, and the worse
| is it for any competitors who do not join.
| JoeJonathan wrote:
| How would that work in a real estate market? How could you
| convince landlords to lower prices?
| singlow wrote:
| By not renting from them. A vacant house will pressure
| the rent downward. But this only works if there is a free
| market. If the regulations are limiting supply, prices
| will continue to go up.
| mnd999 wrote:
| Excess supply. But that will never happen.
|
| Low availability keeps prices high with no need to worry
| about things like quality. There is therefore no
| incentive to build to increase supply. When a market is
| this dysfunctional, state intervention is the only way
| forward. Build publicly owned housing and rent it
| affordably.
|
| This probably won't happen either, because so many in
| government are also landlords.
|
| Edit: Wow, so many downvotes for advocating public
| housing.
| cmiles74 wrote:
| It's worth pointing out that the software will recommend
| leaving apartments empty for the sake of keeping rents
| high. This is briefly mentioned in the article, but
| implies that we would need a lot of excess supply to make
| a difference in areas dominated by a small number of
| companies utilizing this product.
| luckylion wrote:
| Once additional supply is added, all the dynamics change
| though. The cartel can restrict their own supply at the
| price of profits, but cartel members will see that
| investors who are not part of the cartel enjoy the same
| high rents while having much higher utilization because
| they don't need to keep flats empty. The only way for the
| cartel to ensure that doesn't happen is to either make
| sure every (new) landlord becomes a member, or make sure
| there can be no new landlords.
|
| So far, they've use the latter option, and that's most
| likely because the first one is hard: if the cartel
| controls the market and keeps the prices high, new
| investors have no incentive to join, they'll make more
| money if they don't.
| prasadjoglekar wrote:
| Make empty apartments untenable. Not by passing a law but
| just raising interest rates so that money locked in an
| illiquid asset is worse off than cash in a bank.
|
| Prices are set on the margin, you need a few landlords to
| start to feel capital pressure to drop rents.
| gwright wrote:
| > Not by passing a law but just raising interest rates
|
| Yeah, I can't imagine there would be any unintended
| consequences to that.
|
| In what world does raising the cost of providing housing
| cause landlords to reduce rents? More likely it causes
| landlords to _stop renting_. See the consequences of the
| rent control regulations in NYC, for example.
| testTED wrote:
| Doesn't that drop investor and institutional demand for
| housing investment leading to more affordable prices for
| "actual" homeowners?
| changoplatanero wrote:
| It's easy to convince them to lower their prices when its
| in their self interest to do so. Collectively the
| landlords benefit from holding empty inventory and
| raising the prices but individually they can benefit from
| breaking the cartel and filling their inventory.
| wwweston wrote:
| > Basically, it boils down to, "do as I say, not as I do."
|
| I think it's more accurate to say it boils down to "our sole
| underlying principle is our own advantage, and the privilege
| of not even having our advantages challenged or negotiated."
|
| But otherwise, I quite agree.
| nostromo wrote:
| I think it boils down to, "different people have different
| opinions, much to the chagrin of internet commentators."
| giraffe_lady wrote:
| This faux-openminded acceptance of opinion diversity is
| so silly and useless as a lens for understanding anything
| at all. As if mere _opinions_ about capital, labor, and
| power are what we 're discussing. As if opinions on these
| things are just something someone _has_ , completely
| divorced from their actual relationship to these concepts
| in the world.
|
| These aren't sports teams, you don't just get together
| with your buds and see how it plays out over a couple
| drinks. "Aw dang I really thought we had it but you
| brought back child labor right at the buzzer there, rough
| one today."
|
| No, wealthy people are for price collusion because it
| gives them more power, and they are against unions
| because they take away some of that power. Some things
| actually _are_ that simple.
| nostromo wrote:
| You've missed my point.
|
| Internet commenters love to group opinions into a camp
| and then call them hypocritical. (Ex: capitalists love
| rent market manipulation but hate unions, those
| hypocrites!)
|
| Of course, that's not true, most capitalists would not
| want price fixing - something generally done under
| centralized planned economies.
| MarkSweep wrote:
| I think I see what your saying. It's common to see
| statements like "group A believes X but group A also
| believes Y, that's hypocritical", where not everyone said
| to be in group A universally believes X and Y. It is
| especially bad with large "us vs then" groups, like left
| versus right politics or capital versus labor.
| blowski wrote:
| I do see this a lot. e.g. "Hacker News readers hate Elon
| Musk yet own Tesla cars"
| topaz0 wrote:
| Capitalists in the world have consistently shown that
| they love market manipulation as long as it is good for
| them.
| wankle wrote:
| Most people don't want people to take advantage of or
| bully people, regardless whether it's capitalists or
| unionists.
| topaz0 wrote:
| Most people -- even capitalists -- like to think they
| aren't taking advantage of people, but most capitalists
| are willing to overlook the ways that they are taking
| advantage of people, so the impulse doesn't do much good.
| wwweston wrote:
| I used to think this too, since I tend to value
| interactions that range between autonomy and cooperation.
| Even where I like competition, it tends to exist within
| cooperative meta-boundaries. I assumed most people
| probably weren't too different from me, which is a very
| cooperative thing to assume.
|
| Over time I've come to realize that while of course
| there's _some_ common nature to human beings, there 's
| also a varying distribution of personality and outlook,
| including how agreeable / disagreeable people as well as
| how assertive. And it turns out on parts of that
| distribution there are people who enjoy not finding
| situations that benefit them but winning benefit and
| status _from_ others.
|
| I don't know whether that's "most" people. I'd guess not
| and that the distribution gets thinner the farther from
| the average disagreeableness and assertiveness you go.
| But it's enough people that I no longer discard
| adversarial values as a potential motive.
| munificent wrote:
| Perhaps a better way to say the parent point is:
|
| It is an emergent property of capitalist systems that
| people who love market manipulation will outcompete those
| who don't and thus end up in positions of such power that
| they effectively determine the characteristics and
| behavior of the system.
|
| There are lots of people playing the capitalism game who
| don't want to cheat. But the system rewards cheaters who
| then use their power to produce the world we are all
| forced to live in.
| jdiff wrote:
| Most people will find another way to frame it. The
| training screenshots in the article are full of examples.
| giraffe_lady wrote:
| I still don't get your point then but that's ok.
| try_the_bass wrote:
| > most capitalists would not want price fixing
|
| I would strongly challenge this. Capitalism is generally
| oriented around maximizing profit. Any time you can sell
| a good for more than its cost of production, you make a
| profit. Competitors, when not prevented by things like IP
| laws, can undercut prices within that gap and take your
| market share, provided they have a similar cost of
| production. The "profit gap" can be exploited.
|
| Price fixing "fixes" that bug, and is a net positive over
| the alternative of racing to the bottom. Better yet, you
| can use price fixing to arbitrarily _increase_ that gap,
| which is exactly what TFA is about.
| mattgreenrocks wrote:
| This is really insightful, and applies to a lot of things.
|
| Basically we create markets that enable (sometimes force)
| transactions in which one side has high amounts of
| leverage, and allow that leverage to increase over time. We
| don't view this high leverage as a problem. And, instead of
| fixing the issue of ever-increasing leverage, we instead
| exhort people to get to a position where they can be
| exerting it.
|
| It's no wonder many feel like the game is rigged against
| them.
| pilarphosol wrote:
| [dead]
| exabrial wrote:
| Holy hell. Can we please sue these fuckers into oblivion and
| every apartment complex that participated?
| paulgb wrote:
| I thought maybe the article was cutting out context from the
| source, so I read the source[1], and not only was the article
| not taking it out of context, there are even more damning
| quotes:
|
| > As one Lessor explains, while "we are all technically
| competitors," RealPage "helps us work together," "to work with
| a community in pricing strategies, not to work separately."
|
| [1] https://www.hausfeld.com/media/550bhzyp/realpage-
| complaint-f...
| peoplearepeople wrote:
| > await approval
|
| Sure seems like RealPage is price fixing then
| vel0city wrote:
| The approval wouldn't be from RealPage, it would be from that
| employee's supervisor.
|
| Essentially, one can configure RealPage (and RealPage seems
| to make this suggestion) to use their auto-price tool by
| default and require management approvals if employees want to
| set the price to something else.
|
| If I'm buying a Playstation at Walmart, chances are the
| person at the checkout counter can't change the price
| directly and give me a discount. They probably can call over
| a manager who could approve a price change because they can
| see I'm a really cool person who should get $50 off this
| Playstation.
| solarmist wrote:
| No, the article is very clear. There is approvals team that
| that has to press the button in addition to management. To
| slow down/increase friction the process even more.
| vel0city wrote:
| > There is approvals team that that has to press the
| button in addition to management.
|
| I agree the article is very clear. The approvals team
| _is_ the management of the property.
|
| From the article:
|
| > If there is a disagreement between the participating
| Lessor and the RealPage Pricing Advisor, the dispute is
| often elevated to the Lessor's management for resolution,
| and specific reasons justifying a departure from
| RealPage's pricing level are usually required.
|
| This snippet is in the "..." from the above comment.
| Funny they snipped out this extremely critical part of
| the quote to show _who does the approval_.
|
| Where does it say RealPage employees need to approve the
| price?
| notahacker wrote:
| Both the article and the court filing are unclear about
| who "the Lessor's management" is, but the Lessor is quite
| clearly defined as the party which is making property
| available for lease
|
| It's difficult to imagine a reason why a property owner
| should have to appeal to "management" to vary the prices
| of their own asset that doesn't involve "management"
| being an cartel body.
| vel0city wrote:
| Yeah, its unclear because the Lessor's management could
| be a property management company, the ownership of the
| property, a leasing team supervisor, etc. There's a lot
| of ways you can set up your property
| ownership/management/leasing teams, so there wouldn't be
| a single point to say "the lessor's manager". However,
| that management _is not RealPage_.
| notahacker wrote:
| But, according to the filing, there is a person called a
| "RealPage Pricing Advisor" who is typically the only
| party in the loop with the ability to settle the
| disagreement without seeking further approvals. And it's
| not exactly a normal arrangement for the "Lessor's
| employees _with pricing responsibility_ " to have prices
| dictated to them by a third party company which also sets
| the Lessor's competitors' prices.
|
| Similarly, if that store manager at Walmart you mentioned
| had to seek approval from the same advisor that does
| prices for K-mart and Target to adjust the amount on the
| till, I don't think one could argue that this wasn't
| price fixing so long as he was still able to get you the
| discount by petitioning the Walton Family...
| vel0city wrote:
| > Lessor's employees with pricing responsibility
|
| Nowhere in here did it say these people needing to submit
| the approvals had pricing responsibility. Even if you did
| have people manually create the prices you'd probably
| still require your front line leasing agents to submit
| approvals for listed prices. In this case, those _with
| the pricing responsibility_ configured their tool to use
| the algorithmic pricing to automatically set the price
| instead of manually setting the prices, and deviating
| from that automatic price requires approval.
|
| > who is typically the only party in the loop with the
| ability to settle the disagreement
|
| This is not true as well. If the person does have pricing
| responsibility, they can just set the price to whatever.
| If they don't, it gets set to approvals for whoever does,
| which would probably be someone in that employee's
| management chain. And by management I mean the leasing
| company or management company or ownership. _Not
| RealPage._
|
| > Similarly, that store manager at Walmart you mentioned
| should have to seek approval from the same advisor that
| does prices for K-mart and Target
|
| Once again, this isn't requiring approval from the
| RealPage Pricing Advsior. Nowhere does this article
| actually state the approval has to come from RealPage or
| that RealPage actually has the power to block price
| changes. This is requiring approval from whoever at the
| property actually has pricing responsibility, whoever
| that may be. Chances are it isn't the front of line
| leasing agent though.
| notahacker wrote:
| > Nowhere in here did it say these people needing to
| submit the approvals had pricing responsibility.
|
| It's right there in the text of the lawsuit:
|
| >> ...If Lessors wish to diverge from the "approved
| pricing" they must submit reasoning for doing so and
| await approval. RealPage encourages participating Lessors
| to have daily calls between the _Lessors' employees with
| pricing responsibility and the RealPage Pricing Advisor.
|
| >> 52. If there is a disagreement between the
| participating Lessor and the RealPage Pricing Advisor,
| the dispute is often elevated_ to the Lessor's management
| for resolution, and specific reasons justifying a
| departure from RealPage's pricing level are usually
| required. But RealPage emphasizes the need for discipline
| among participating Lessors and urges them that for its
| coordinated algorithmic pricing to be the most successful
| in increasing rents, participating Lessors must adopt
| RealPage's pricing at least 80% of the time
|
| Now you can reasonably dispute whether the Lessor
| employee carrying out day to day responsibilities
| actually _has_ pricing responsibility if they 're unable
| to vary prices by themselves, but what is not normal is
| that the higher pricing authority which usually doesn't
| need an approval process appears to sit with employees of
| what is notionally a third party software vendor for a
| lot of notionally competing landlords
|
| [nb I edited my previous post slightly whilst you were
| replying. Slight change of phrasing but I don't think it
| materially affects your reply]
| vel0city wrote:
| > Now you can reasonably dispute whether the Lessor
| employee carrying out day to day responsibilities
| actually has pricing responsibility
|
| I do dispute it, because it even suggests later that "the
| dispute is often elevated to the Lessor's management for
| resolution". It implies some percentage of these disputes
| don't bother getting elevated, probably because that user
| actually _did_ have pricing authority and _could_ just
| change the price. Most users of the system _would not
| have_ this permission. Just like most employees at the
| checkout counter can 't change the price without
| approval.
|
| Do I agree this market is a bit strange for having these
| algorithmically generated prices? Sure. Should it be
| investigated for potentially illegal business practices?
| Sure. Is requiring a manager approval for changing the
| price from what those with pricing authority originally
| set it to, even if that price is essentially "auto",
| strange? No.
| notahacker wrote:
| > It implies some percentage of these disputes don't
| bother getting elevated, probably because that user
| actually did have pricing authority and could just change
| the price
|
| Or it implies that when the Pricing Advisor won't change
| the model, they are persuaded to back down and accept the
| prices given, by a company that insists its valuation
| model will only work if clients adhere to its prices >80%
| of the time[1]. Or that sometimes the "Pricing Advisor",
| notionally a customer success employee of an ISV, has
| some sort of executive authority to adjust the price
| which that Lessor's own employee doesn't. Certainly those
| two outcomes are those the drafter of the lawsuit
| _intended_ to imply, regardless of which is actually the
| most frequent.
|
| It'd be _odd_ if a company put the equivalent of a
| checkout operative on the call with a third party
| "Pricing Advisor" to discuss the price (both in general
| and in the context that RealPage supposedly encourages
| daily calls with employees "with pricing
| responsibility").
|
| [1]I sold an algorithmic valuation model once. It's
| something of an understatement to say that this is not
| how valuation models ordinarily work or the sort of
| feedback a valuation professional behind the model would
| ordinarily give to clients...
| vel0city wrote:
| Your argument is quickly drifting away from what you were
| originally suggesting, which was that RealPage had some
| power to arbitrarily block their customers from changing
| their prices and truly _enforce_ their suggested prices
| (see your statement "is typically the only party in the
| loop with the ability to settle the disagreement"). Now
| its just that they have a lot of persuasion to those with
| pricing authority. Which sure, investigate _that_ , I
| agree.
|
| So yeah, investigate those calls. Investigate how the
| pricing algorithm comes up with its price. Investigate
| how much the marketing is pushing cartel-like behavior.
| Smash it with a hammer if they're breaking the law.
|
| But the fact that requiring front of line employee
| pricing changes to be approved by someone in management
| at the property management/ownership as something wrong
| or needing investigation, that's pretty normal. _Most
| users of RealPage_ wouldn 't have pricing authority!
| They're front of house salespeople. Its _these_ kinds of
| requests to change the prices that would come under
| review, and that approval _wouldn 't be at the decision
| by RealPage_. Sure, maybe RealPage has a lot of
| persuasion over the person making that final decision,
| but ultimately whoever has pricing authority at that
| property (not a RealPage employee) isn't the one that
| clicks "Approve" either way.
|
| Awaiting approval from your manager to change the price
| is not evidence of price fixing, which is what I
| originally replied to.
| notahacker wrote:
| Your argument is quickly drifting away from the actual
| process described in the document
|
| >> 51. Specifically, every morning, RealPage provides
| participating Lessors with recommended price levels.
| _Lessors typically must communicate to a RealPage
| "Pricing Advisor" that they have "accept[ed]" or
| "confirm[ed] the "approved pricing" within a specified
| time frame. If Lessors wish to diverge from the "approved
| pricing" they must submit reasoning for doing so and
| await approval._ RealPage encourages participating
| Lessors to have daily calls between the Lessors'
| employees with pricing responsibility and the RealPage
| Pricing Advisor.
|
| >> 52. _If there is a disagreement between the
| participating Lessor and the RealPage Pricing Advisor,_
| the dispute is often elevated to the Lessor's management
| for resolution, and specific reasons justifying a
| departure from RealPage's pricing level are usually
| required. But RealPage emphasizes the need for discipline
| among participating Lessors and urges them that for its
| coordinated algorithmic pricing to be the most successful
| in increasing rents, participating Lessors must adopt
| RealPage's pricing at least 80% of the time
|
| There is nothing remotely normal about someone having the
| executive decision making authority to authorise a price
| variation a third party is trying to make to their
| inventory but not the executive authority to keep prices
| as they were. Nor is there anything remotely normal about
| a person seeking approval to retain or change price
| contacting a third party company's "Pricing Advisor" in
| the first instance rather than the approver within their
| own company. If the "Pricing Advisor" didn't have greater
| ability to resolve this "dispute" than the staff member
| who has the ability to "approve" a price change but
| apparently not to hold prices as they are, why would they
| be contacted?
|
| Nobody has argued there isn't some ultimate beneficial
| owner of a property with the power to tell RealPage to
| bugger off, they're arguing that _as described_ this
| resembles a normal chain of authority and consultation of
| third party experts in roughly the same way an MLM
| resembles a regular sales team. Now if you want to argue
| that this is deceptive wording on the part of the firm
| drafting the lawsuit stitching lots of discrete elements
| together into the appearance of a single process of
| questionable legality, I 'll agree that _may_ be possible
| (putting the worst possible spin on things is a class
| action lawyer 's job) but then, some evidence of that
| would be nice...
| vel0city wrote:
| My argument hasn't drifted away from what this process
| is. Combining the logic here in an easier to follow
| workflow:
|
| Ownership/management chooses to buy RealPage for their
| property management solution for a building. They decide
| to configure it and contract out Pricing Advisor
| services. They've now established _the default prices_
| are whatever RealPage suggests it should be.
|
| They then hire a lot of leasing agents (or they hire a
| leasing agency who hires these people). These are front
| of line sales people. These people are getting the day to
| day updates on changes to these prices, which are
| supposedly algorithmically generated. These are the
| people you'd _want_ to review these prices, because these
| are the people who are actually dealing with the day to
| day of trying to sell these units. If these prices that
| the advisor is suggesting are unreasonable, they should
| probably push back and make a recommendation to change
| the price. They 're the ones hearing customers argue the
| prices are overpriced and what not, they're a bit closer
| to the ground truth of the price in many ways.
|
| However, those front line workers probably should not
| have arbitrary pricing powers. They're just focusing on
| signing leases, not necessarily broader picture of the
| building's business.
|
| So talking about the approval process (which was the
| whole point I was originally replying to, not the
| algorithmic pricing or the whole weird relationship of RP
| to lessors _which I 've agreed should be investigated_),
| lets just remove the whole algorithmic side of things.
| Upper management said units lease for $2/sqft. Front of
| line leasing agent decides to start signing leases for
| $1.75/sqft. Should that front of line leasing agent have
| been able to change the price from what upper management
| wanted without seeking an approval? Should they have
| probably given a written reason for going against the
| established pricing structure upper management chose?
|
| So now lets enter back the idea of the algorithmic
| pricing. Upper management likes this dynamic algorithmic
| pricing. They say, whatever the algorithm sets, that's
| the price today. Algorithm says $2/sqft. Front of line
| leasing agent thinks a more realistic price is
| $1.75/sqft. Should that front of line leasing agent just
| be able to arbitrarily decide what the price is without
| seeking some approval? Ultimately, that review _isn 't_
| some RP agent; that review is the same manager as before.
|
| I think you're conflating the people with pricing
| authority on the call with the Pricing Advisor and the
| people who would often be submitting pricing changes for
| approvals. If they're having to get the pricing change
| approved by their management, then _by definition_ they
| didn 't have pricing authority. The people with pricing
| authority are the ones who made the decision to use this
| whole Pricing Advisor system, and are continuing to allow
| the Pricing Advisor use their black box to tell them what
| the price is today. _The ones on that call are the ones
| that can tell RP to bugger off_ , as _by definition_ they
| have pricing authority.
|
| I do agree the algorithmic pricing is weird, and a lot of
| markets don't behave this way. I do think there's some
| bad relationships what with the pricing advisors and the
| large market presence of RP. These things _should_ be
| investigated and potentially have judgements against. The
| fact its literally saying " _coordinated_ algorithmic
| pricing " is a _major_ red flag there 's something bad
| happening here. The "coordinated" part is the part is the
| thing that's bad, not that front of line employees need
| approvals to change prices or even just the basic idea of
| using algorithms to set prices.
| andrewmutz wrote:
| Usually the owner of the building is the one who insist
| on using the pricing software, because it increases
| rents. The management company usually prefers lower
| rents, because it is less work to fill units.
| [deleted]
| solarmist wrote:
| I'm not saying they are DOING anything or a "real" team.
| It could just be a queue that creates a delay. The
| objective is to increase the friction to the maximum
| degree when deviating from the algorithmic pricing.
|
| Still, the impression given to the property's management
| team is that a person (possibly a customer service grunt)
| is doing some kind of "final review," manually clicking a
| box or even just making sure they don't drop below 80%
| acceptance.
| vel0city wrote:
| > Still, the impression given to the property's
| management team is that a person (possibly a customer
| service grunt) is doing some kind of "final review,"
| manually clicking a box or even just making sure they
| don't drop below 80% acceptance.
|
| Or making sure their leasing agents aren't issuing leases
| that will lose the company money.
|
| If the building's budgets are based around leasing
| apartments at at least $2/sqft, and leasing agents start
| issuing leases at $1.50/sqft without anyone else knowing
| or approving, there's going to be a problem. Those
| leasing agents aren't always privy (or even care to know)
| about the budgets of the building.
|
| If a waiter starts selling the $5 hamburgers for $1, do
| you think the business is going to do well? Should the
| waiter have the ability to arbitrarily decide menu
| prices?
| jnovek wrote:
| Wrong paragraph, look at the one above it:
|
| > Specifically, every morning, RealPage provides
| participating Lessors with recommended price levels.
| Lessors typically must communicate to a RealPage "Pricing
| Advisor" that they have "accept[ed]" or "confirm[ed] the
| "approved pricing" within a specified time frame. If
| Lessors wish to diverge from the "approved pricing" they
| must submit reasoning for doing so and await approval.
| RealPage encourages participating Lessors to have daily
| calls between the Lessors' employees with pricing
| responsibility and the RealPage Pricing Advisor.
|
| So every day an employee at the Lessor must tell a
| Pricing Advisor -- a flesh-and-blood RealPage employee --
| that they accept the pricing provided by RealPage.
| Further, to reject the pricing, they must explain to the
| Pricing Advisor why they are rejecting the pricing in
| writing.
|
| It IS confusing because it goes on to say in the
| following paragraph that said requests _also_ require
| _further_ approval from a manager at the Lessor.
| andrewmutz wrote:
| ...but that's still not approval by Realpage employees.
| The employees of the property management company do not
| need realpage approval to change prices from the
| suggested prices. They need management approval from
| their own company to do so.
| vel0city wrote:
| This is a bit vague, but "wait for approval" here doesn't
| necessarily mean its the Pricing Advisor that's approving
| it. I definitely take it to mean its the management
| approval as mentioned later. Which makes sense, you'd
| normally want deviances from established prices to be
| approved by management.
|
| Given that it says "If there is a disagreement between
| the participating Lessor and the RealPage Pricing
| Advisor..." I'd say the Pricing Advisor isn't able to
| just wholesale deny it or delay it. As the leasing agent,
| you'd just choose to deny that price, put in a comment
| about how its a unit that we haven't been able to move in
| forever and every tour over the last six months leads to
| people saying the unit is way overpriced", and then that
| comment would get sent to your manager for approval or
| rejection.
| bbreier wrote:
| > But RealPage emphasizes the need for discipline among
| participating Lessors and urges them that for its
| coordinated algorithmic pricing to be the most successful
| in increasing rents, participating Lessors must adopt
| RealPage's pricing at least 80% of the time.
| vel0city wrote:
| Sure, I'm not trying to make any argument here that this
| is a good system or that it isn't afoul of any
| antitrust/price fixing or anything along those lines.
|
| I'm just stating this idea that many seem to have here
| that these prices are being enforced behind RealPage
| support agents manually approving price changes is
| incorrect. In fact, property managers can choose to just
| _not_ use this price tool at all, and manually set their
| prices, which can _also_ require employees to submit
| approvals for price changes.
|
| The whole "await approval" thing isn't the problem,
| that's just normal for lots of places. Lots of places
| require some kind of management approval to adjust
| prices.
| Stealthisbook wrote:
| The rub is that the suggested pricing is the default that
| doesn't require extra layers of approval with an included
| reasoning for deviating. All the pressure is for using
| the price derived from the proprietary information of
| other companies-that would be price fixing. It's not the
| process, so much as the source except that the process is
| set up to encourage as universal adoption as possible to
| keep the scam going.
| vel0city wrote:
| As mentioned elsewhere, chances are even if the property
| management manually set prices for every unit these same
| leasing agents would still have to submit approvals for
| changes to these prices. Its just that those with actual
| price authority for the building chose to set the prices
| for those units to be whatever the algorithm suggests by
| default.
|
| Just like the person at the checkout counter can't just
| arbitrarily sell me a PS5 for $5.
| anigbrowl wrote:
| _specific reasons [...] are usually required._
|
| By whom? It's rather ambiguous (as is so oftent he case
| with the passive voice), I can see how you and the other
| person drew different interpretations.
| vel0city wrote:
| From what I gather, this was training for a leasing sales
| agent. So this would be the reasons why that sales agent
| thinks this person that's trying to get the lease should
| get the lease for something other than the list price.
| Those reasons would then get sent to that agent's
| management team for approval. Which is good to have those
| reasons, like "we've been having trouble leasing that
| corner unit as people are often concerned about road
| noise, it has been vacant for over six months at current
| pricing."
| [deleted]
| ROTMetro wrote:
| First, how do you not have a 'you're posting too fast'
| cooldown with all the posts you are making on this thread?
|
| Second, this isn't playstation though is it? But staying
| with this example, if I go get a $50 meal my server very
| much can adjust my bill 'I removed X', 'I comped Y' happens
| all the time. If I go to a matress store/furniture store
| the sales person very much has the ability to lower my
| price arbitrarily on items way more expensive than a
| Playstation. Your 1 example isn't really all that relevant.
| pixl97 wrote:
| What, you didn't buy HN Premium+ for the 10x posting
| rate?
|
| J/K, I believe it has something to do with karma level.
| You still have a pretty low karma amount.
|
| https://github.com/minimaxir/hacker-news-undocumented
| vel0city wrote:
| > First, how do you not have a 'you're posting too fast'
| cooldown with all the posts you are making on this
| thread?
|
| I dunno, I definitely have some posts where I have to
| wait for the reply link to show up to write a reply.
|
| > if I go get a $50 meal my server very much can adjust
| my bill 'I removed X', 'I comped Y' happens all the time.
|
| And usually behind the scenes they got a supervisor or
| manager approval for doing such a thing, or will probably
| have to explain the deviance from normal pricing later.
|
| > If I go to a matress store/furniture store the sales
| person very much has the ability to lower my price
| arbitrarily on items way more expensive than a
| Playstation.
|
| Most times that I've negotiated pricing for things (cars,
| mattresses, etc.) outside of private party the final
| price _was_ subject to some kind of supervisor /manager
| approval. I can't think of a single time where the final
| sale for some negotiated price didn't have some approval
| process to it.
|
| If a business just allows their front of line employees
| to arbitrarily set prices without any kind of review,
| their business probably isn't going to do too well. The
| front of line sales people probably don't have all the
| information as to _why_ the company is wanting to set the
| prices a certain way, and without that information they
| 're setting prices rather arbitrarily. This could lead to
| some pretty massive damages to the company.
|
| If a waiter just decides to start only charging $1 for
| the $5 burgers, the business is going to have a problem.
| jollyllama wrote:
| I think landlords have already been doing this even before
| software existed.
|
| There is an additional mechanism that creates this dynamic,
| where properties (especially commercial ones) are valued based
| on the price of leases. For this reason, it can be better for
| landlords to let a property stay empty with a higher listed
| rent than to let it open up, if they are renewing their lease
| or borrowing against it.
| Scoundreller wrote:
| A lot of jurisdictions give property tax rebates on vacant
| property. Mine has finally removed that and now penalizes it.
|
| Smart move: vacant properties are devoid of voters.
| testTED wrote:
| s/voters/taxpayers
| cjbgkagh wrote:
| I've heard from non-authorities sources that loans for the
| comercial properties have covenants that would severely
| financially punish the landlord for lowering the rent. Enough
| of these restrictions in a single location would have a
| monopolistic effect on pricing paid for by landlords who now
| have to carry these loans without tenants. Usually it's
| expensive to distort a market enough to maintain monopoly
| pricing but not if you can get someone else that is
| optimistic, naive, or desperate to pay for it.
| onlyrealcuzzo wrote:
| IIUC, this is an expansionary accounting trick.
|
| Your revenue in commercial real estate is imaginary. If
| your building is vacant 100% of the time for the year, your
| revenue is 12 months x your desired rent.
|
| Then you have an _expense_ of 12 months vacancy.
|
| You can get loans based on your revenue.
|
| Additionally, it's the reason you see _concessions_ of 1-2
| months free all the time - but landlords will never reduce
| the rent.
|
| _concessions_ are expenses. Revenue is 100% of their
| desired rent.
| 8note wrote:
| Claiming revenue that you never actually had sounds
| fraudulent?
|
| Can't they extend the trick, so that they have one unit
| that rents at $100B that always has the vacancy expense
| of $100B? Then they can set the other rents as they like
| with little impact to their revenue
| cjbgkagh wrote:
| Would that be a covenant on revenue vs a covenant on
| rental price? Wouldn't that amount to the same thing. I'm
| not in that industry nor have I paid particular attention
| to it, just going by a rumor I head from a friend.
|
| Perhaps instead of a covenant it could be more implicitly
| enforced by suggesting if there is a revenue drop they'll
| revalue the property and force the landlord to make up
| the difference which could be financially ruinous for
| some.
| VHRanger wrote:
| Having rented commercial properties, the way around this is
| to agree to the lease rent, but then negotiate a bunch of
| rent vacations, financed renovations, etc. which even out
| to having a much lower lease.
|
| The commercial landlord financial infrastructure is broken,
| but gameable.
|
| Also, a land value tax would fix this (and many other real
| estate market distortions)
| ramraj07 wrote:
| Doesn't matter, now they are openly colluding through a
| company. A competent government can create a RICO equivalent
| and penalize these animals, if it wanted to.
| pixl97 wrote:
| Government officials whose campaigns are funded by the
| potential members of the RICO suit are rarely ones to push
| for said suit.
| idopmstuff wrote:
| What's described here is significantly worse, in that it's
| not just landlords deciding to leave things vacant instead of
| lowering lease prices, it's a third party software that's
| coming in and telling a large number of landlords across a
| market what they're allowed to charge.
| JamesBarney wrote:
| There is nothing wrong with keeping a unit empty to charge
| more money.
|
| There is something very wrong with a software based price
| fixing cartel.
| jonathankoren wrote:
| There's two different types of price collusion, and only one
| is illegal. The first is using public signals (ie looking at
| competitors prices) and setting yours to match. This is
| perfectly acceptable, and is usually unspokenly enforced by
| tit-for-tat strategies.
|
| The second is when you get together and say, "1bd studios are
| $1200, agreed?" This explicit coordination is illegal. IANAL,
| but this looks closer to the second.
| DaveExeter wrote:
| >This is perfectly acceptable
|
| Not "perfectly". I think some companies have gotten into
| trouble doing this.
| kortilla wrote:
| >It's hard to imagine a clearer, more blatant description of
| cartel price fixing.
|
| Uh, OPEC?
| jimbob45 wrote:
| Still, you can find more examples of OPEC members going
| against the wishes of OPEC than you can find landlords going
| against the wishes of RealPage. Good thinking though!
| pixl97 wrote:
| The key to price fixing is being an entity larger than the
| government can control and having something the government
| desperately needs. It also helps when is a globally desirable
| product and the ability to ship it anywhere.
| insane_dreamer wrote:
| While OPEC is a cartel, it does not fix prices. It reduces or
| increases supply, and then the market decides price
| organically based on laws of supply & demand. So not quite
| the same.
| moffkalast wrote:
| ...with the intention of fixing prices.
| IncRnd wrote:
| That's like saying the sky isn't really blue, when someone
| asks you the color. "As far as wavelengths go, Earth's sky
| really is a bluish violet. But because of our eyes we see
| it as pale blue." [1]
|
| Saying OPEC doesn't fix prices is a nonsense statement that
| does nothing but split hairs. OPEC engages in price fixing
| as set forth by the FTC, though they are not subject to the
| FTC. [2]
|
| Price fixing is a term of art that doesn't just mean the
| specific price of a sale is fixed. Price fixing can also
| mean that prices are indirectly fixed by production quotas
| or capacity. OPEC exists for the very reason to set
| production quotas or capacity. "OPEC's objective is to co-
| ordinate and unify petroleum policies among Member
| Countries" [3]
|
| [1] https://www.forbes.com/sites/briankoberlein/2017/01/11/
| earth...
|
| [2] https://www.ftc.gov/advice-guidance/competition-
| guidance/gui...
|
| [3] https://www.opec.org/opec_web/en/about_us/24.htm
| kortilla wrote:
| Coordinated supply constraint to drive up prices is price
| fixing. Price fixing covers any coordinated behavior to
| affect a market price.
| carlosjobim wrote:
| Yes, OPEC is the prime and foremost example of a cartel, but
| what does your comment add to this discussion? What's the
| connection?
| kortilla wrote:
| Did you read the comment I replied to?
| lordnacho wrote:
| C isn't for cartel
| IncRnd wrote:
| OPEC is literally a cartel. The spelling is meaningless,
| and nobody even said that C stands for cartel.
| cartel [1] noun a group of similar independent
| companies who join together to control prices and
| limit competition: * an oil cartel
|
| [1] https://dictionary.cambridge.org/us/dictionary/english/
| carte...
| yterdy wrote:
| Here's a doc that was recently scrubbed from the marketing page
| of the company, Entrata, that provides software to my property
| manager (thank you, Archive.org).
|
| https://imgur.com/a/D3gsLBL
|
| If there's any integrity left in our legal system, this will be
| a slam dunk for renters.
| jfghi wrote:
| More modern I think would be PRMD Solutions
| bitwize wrote:
| > This is like calling your pyramid scheme "Pyramidal Inc.".
|
| (in Coach Z voice) "That happened one time!"
|
| TransAmerica owns an insurance MLM called World Financial
| Group. I was unfortunate enough to be approached by one of
| their salespeople at a meetup, and the number on the business
| card he gave me was, I shit you not, 1-800-PYRAMID. A reference
| to the TransAmerica Pyramid Building in San Francisco, but
| still.
| ordinaryradical wrote:
| This is the smoking gun, imo. It doesn't matter if it's
| accomplished via software, AI, or anything else--a blatant
| attempt to coordinate and coerce landlords into a given pricing
| regime is the definition of price fixing.
|
| I suspect there's a lot of other price coordination schemes
| going on under the surface of our society just like this. The
| pandemic gave them cover, but the coordinated effort to raise
| prices destroys the efficient market hypothesis as does the
| gargantuan nature (and influence) of single actors within
| industries.
|
| There is no future for capitalism without harsh enforcement and
| trust-busting on this front.
| dheera wrote:
| > destroys the efficient market hypothesis
|
| > There is no future for capitalism
|
| My honest opinion -- We don't need an efficient market. We
| don't need extreme capitalism. We need housing for everyone.
|
| We need government to step in and cap housing prices, build
| more housing, and drive away the 80-year-old farts with 15
| houses still trying to extract money from poor college
| students.
|
| Housing should be built to LIVE in, not as an investment.
| rootusrootus wrote:
| The gov't had a crappy track record when it comes to making
| the market behave as it wants. Especially when the reasons
| are moral and not universal.
|
| How about we just build a lot more housing and let the
| chips fall where they may. Shouldn't even need to tax empty
| housing, either, if we build enough then the market can fix
| the rest pretty easily.
|
| The whole reason we have a housing problem to begin with
| isn't capitalism, it's government restrictions on building.
| Urban grown boundaries, zoning, you name it.
| hbrn wrote:
| The problem with housing for everyone is that location
| demand is not distributed equally. How exactly would you
| provide housing for everyone who wants to live in
| Manhattan?
| crooked-v wrote:
| Not everyone can fit into Manhattan, but the other
| boroughs could all easily fit ten times as many people as
| they currently do.
| HardlyCurious wrote:
| Capping housing prices will cause less houses to be built,
| which is the opposite of your stated goal.
|
| Look, if you want more housing we have to let developers
| build more housing. Many areas in the country put in
| restrictions like limiting the height of new buildings
| because it's 'nice' not to have the views of the sky by
| blocked by a new building.
|
| Well nice costs something, and in this case it's housing
| scarcity.
| runnerup wrote:
| I'd be fine with them just building more housing and taxing
| either land value or empty units.
| dheera wrote:
| Taxing empty units -- yes, 100%
|
| Taxing land value -- this unfortunately leads to them
| passing on the taxes to renters, and rental housing
| becomes ever more unaffordable
| adgjlsfhk1 wrote:
| the advantage of taxing land value is that you can pass
| on less tax for higher density which means higher density
| housing gets higher returns for landlords incentivizing
| construction.
| 0xcde4c3db wrote:
| LVT is usually meant to be paired with abolition of
| parking minimums and single-family zoning, so that the
| impact of the tax can be spread out among more people.
| medvezhenok wrote:
| It's very hard for landlords to pass on LVT completely -
| they are locked in (location-wise), where as renters are
| mobile...
|
| Also, as other comments said, it incentivizes increased
| density.
| Nevermark wrote:
| If you tax land value, but not development value, that
| incentivizes greatest productive use of land, and
| penalizes unproductive use of land.
|
| It incentivizes multi-unit construction, as the more
| productive the land is, the less onerous the _land_ taxes
| become. (Wheres currently, developing land normally
| _increases_ the _property_ tax.)
|
| Increasing units per land both provides more housing, and
| reduces the tax/renter pass through.
|
| It disincentivizes holding unproductive land as an
| investment, since unproductive land gets taxed as highly
| as productive land.
|
| Removing the dysfunctional use of land as a store of
| value asset, would greatly reduce land and rent prices.
|
| Removing the store of value aspect, would also better
| align landlords incentives with their renters. As their
| business model would now purely revolve around their
| paying customers, without the subsidy of land prices
| going up due to investment mania. And improving rental
| properties would be cheaper, without the tax increases
| that entails today.
|
| All these benefits probably accrue from good economic
| alignment, because a land tax, instead of total property
| value tax, reflects that it is land, not its development,
| which is the finite resource.
|
| Land is finite, yet we all absolutely need land, along
| with food, air, and water. (Finite in a soft way, given
| different land is more or less usable). We only "own"
| land in passing. So those holding it shouldn't be lightly
| excluding better uses of an absolutely necessary
| resource.
|
| Land taxes are also morally well aligned. It is land (not
| development) that is a joint inheritance to us all. Land
| owners share a bit of that inheritance value with all of
| us, while still being allowed to manage it according to
| self-interest, opportunity and competition.
|
| Finally, property tax is part land tax, part wealth
| (development value) tax. Only taxing land eliminates a
| wealth tax. Upgrading your home won't increase your
| taxes.
|
| The humanitarian and economic benefits of properly
| aligned land taxes would directly accrue to everyone in
| society from the bottom to the top.
|
| It would improve overall economic efficiency and
| equality.
|
| It would eliminate a lot of local and national political
| conflicts.
| carlosjobim wrote:
| This would be a disaster for the ruling class. If there
| was any risk of such a tax reform coming to pass, they
| would nuke the whole country long before any such thing
| could happen.
| axus wrote:
| How much of the "ruling class" actually get most of their
| power from the land they control? I get that price of
| property affects a lot of people, but I also think the
| "landlords" are a fraction of the political and economic
| power.
| pixl97 wrote:
| You seem to be forgetting that over here in the US we're
| all a bunch of "temporarily depressed millionaires", the
| wealthy landowners have and will continue to convince the
| voting public that any of the above rules would be
| detrimental to the not currently a millionaire class, and
| such rules should be prevented at all costs, less the
| dreams of them being rich will be permanently dashed.
| crooked-v wrote:
| >housing
|
| >efficient market
|
| That's already been destroyed by 50 years of city-enforced
| redlining and NIMBYism.
| onlyrealcuzzo wrote:
| > a blatant attempt to coordinate and coerce landlords into a
| given pricing regime is the definition of price fixing.
|
| There's no need for _coercion_. The landlords themselves are
| greedy (I don 't think any more so than any other investor
| class).
|
| Landlords being greedy isn't really a problem. They're going
| to try to get the highest rent. That's capitalism.
|
| It's supposed to work in a COMPETITIVE market.
|
| RealPage fixing prices breaks that. It's clearly causing
| consumer harm and anti-competitive.
| idopmstuff wrote:
| I was all ready to come into the comments with "Sure this is
| annoying, but it's a symptom of the underlying problem of a
| lack of housing caused by poor housing policy." Then I got to
| this paragraph, and yeah, no, this just clearly price fixing.
| You have to convince your software provider to let you charge a
| price that's different than what they want you to charge? That
| is truly bananas.
| andrewstuart2 wrote:
| That's because you're not so much convincing the software
| provider as you are the cartel who wants prices to rise as
| effectively as possible.
| Aunche wrote:
| If you take the plaintiff's allegations at face value, of
| course the defendant is going to sound guilty. The reason why
| I'm skeptical is because "cartel as a service" doesn't make
| any sense as a business model. Realpage doesn't gain anything
| from creating a cartel because they don't own the homes. They
| advertise that they maximize profits for landlords. If they
| are indeed price fixing, they aren't fulfilling their promise
| to their customers.
|
| Edit: As with all just about anything. It looks like, people
| are hostile of the idea of "presumption of innocence" when
| that requires them to question their priors.
| idopmstuff wrote:
| > If they are indeed price fixing, they aren't fulfilling
| their promise to their customers.
|
| They definitely are! Price fixing ensures higher rent for
| the whole cartel (which is comprised of their customers).
| And enforcing cooperation is decidedly a good thing,
| because cooperation is required to keep prices artificially
| inflated.
|
| What Realpage gains from creating a cartel is a really
| sticky customer base. I don't think it makes sense as a
| model because it seems to be clearly illegal, but putting
| that aside they're delivering a lot of value to their
| customers and are getting paid for it - it's definitely a
| sensible business model.
| Aunche wrote:
| > Price fixing ensures higher rent for the whole cartel
| (which is comprised of their customers)
|
| Price fixing ensures higher profits for the entire
| market, not just the cartels. Those outside the cartel
| equally benefit from the price fixing as cartel members,
| but that no pressure to constrain supply, which puts them
| in a strictly better position. For example, OPEC enabled
| the fracking industry and when OPEC loosened their price
| fixing, in 2019, many of these companies went bankrupt.
|
| > What Realpage gains from creating a cartel is a really
| sticky customer base.
|
| So that's why they allegedly threaten to fire their
| customers when they don't follow their pricing
| recommendation? It would make much more sense to simply
| offer the best pricing product.
| HDThoreaun wrote:
| Tragedy of the commons is a problem cartels face, that
| doesn't mean the cartels aren't providing value though.
| Sure some will defect, but everyone in the cartel is
| still better off than the otherwise would be.
| Aunche wrote:
| > Tragedy of the commons is a problem cartels face,
|
| That's my point. If RealPage were creating a cartel, they
| would be creating themselves problems without any upside.
| They aren't receiving the rent. They're receiving money
| from landlords who are happy with their pricing model.
| The fact the RealPage does not seem to experience the
| same problems common to cartels suggests that they aren't
| facilitating a cartel.
| HDThoreaun wrote:
| Signing up for the service gives the members immediate
| access to the price the cartel is setting. Defecters have
| to wait for the market to react to RealPages updates, so
| there is a disadvantage to defecting. Even if there
| wasn't, the biggest landlords would want to join the
| cartel because they know that fixing prices makes them
| richer, even if some of the value the cartel creates
| isn't captured.
| Ekaros wrote:
| I might accept information sharing of rents and price levels.
| And someone guessing what market will bear.
|
| But having someone approve pricing? That is clearly something
| worth prosecuting and heavily fining for.
| arrosenberg wrote:
| Honestly. The CEO and General Counsel? Straight to jail for
| economic crimes. They're stealing from the regular people.
| kilotaras wrote:
| What you see here is not price-fixing, but expedited price-
| discovery. What is problematic (to society generally and renters
| specifically) is the fact that this price-discovery is done in
| the market with artificially constrained supply.
|
| Prices raise because people _are willing_ to pay that much for
| dwelling. People are willing to pay that much, because supply
| doesn 't keep with demand.
|
| ## Why I don't consider this a case of price-fixing
|
| Price-fixing that is not done via consolidation is ultimately
| unstable from game theory point of view.
|
| There's very strong incentive to defect from "optimal vacancy
| rate" and eat outsized profit compared to the rest of
| competition. Making building easier makes consolidation harder,
| as outsiders are now potential defectors as well. AFAIK we're not
| in monopoly situation (yet?) for rental properties.
| njovin wrote:
| IMO "fixing" is the act of forcibly setting prices across a
| market, whereas "discovery" is informing your customers with
| up-to-date pricing info and letting them decide whether to
| adopt it or not.
|
| If you need to get on the phone with RealPage every single
| morning and either adopt their suggested pricing or jump
| through beuracratic hoops to exclude yourself from doing so,
| that seems much more like fixing. They're not saying "here's
| the data, go about your day," they're saying "you are to charge
| tenants this much rent and you better have a good goddamned
| reason if you refuse."
| dangerlibrary wrote:
| What you see here is literally the definition of cartel price
| fixing.
|
| OPEC engages in price fixing. It is unstable, as you say, but
| nobody would say "OPEC is a perfect example of the free market
| functioning exactly as it should, with no price fixing or
| market manipulation going on."
| Aunche wrote:
| The biggest beneficiary of cartels are competitors that are
| outside the cartel. For example, OPEC enabled fracking to be
| profitable. To hurt fracking, they loosened their price
| fixing.
|
| If RealPage were price fixing rather than simply facilitating
| price discovery, landlords would have no incentive pay for
| the service.
| dangerlibrary wrote:
| > The biggest beneficiary of cartels are competitors that
| are outside the cartel.
|
| This is just... obviously wrong. If this were true, nobody
| would ever join a cartel, since membership is voluntary.
| All antitrust legislation and enforcement would be rendered
| entirely moot, because nobody would ever collude to fix
| prices.
| sib wrote:
| OPEC technically engages in supply fixing - the market then
| sets the price driven by the intersection of the demand curve
| and the (fixed) supply. If OPEC reduced supply and users of
| oil reduced demand by more than that same percentage, prices
| would likely drop.
| notahacker wrote:
| If I had to give an example of the difference between price-
| fixing and expedited price discovery, I'd say software used by
| vendors with significant market power that not only _suggests_
| a price based on other clients ' prices, but actually _sets_ it
| and bills based on it, whilst actively resisting clients trying
| to bill lower amounts would be a pretty good example of when it
| becomes fixing (the fact it 's apparently documented in
| training programmes with cheesy computer voices saying, in
| essence "think of the long term benefits of the cartel, not
| your tenants or vacancy rate" and implemented by demanding
| clients seek "approval" for their own prices and not just
| through poor UX is the icing on the cake)
| PeterisP wrote:
| Why do you consider that "Price-fixing that is not done via
| consolidation is ultimately unstable from game theory point of
| view." + "there is a very strong incentive to defect" would
| imply that this is not price fixing?
|
| Quoting FTC, price fixing is an agreement (written, verbal, or
| inferred from conduct) among competitors to raise, lower,
| maintain, or stabilize prices or price levels; Generally, the
| antitrust laws require that each company establish prices and
| other competitive terms on its own, without agreeing with a
| competitor.
|
| It doesn't matter if we're in a monopoly situation, it doesn't
| matter if the agreement is effective or if many participants
| defect - if some participants agree to coordinate prices, that
| is prohibited and punishable.
| jnovek wrote:
| In the training tools covered in the article it mentioned that
| it was difficult (as in, you had to contact a support rep) to
| set a price other than the one recommended by RealPage. By
| making it difficult to manually set prices, the tendency
| towards defection is mitigated.
| vel0city wrote:
| > as in you had to contact a support rep
|
| This is untrue. The escalation would be to the property's
| management team, which is the same group which configured the
| tool to use the recommended pricing.
|
| > If there is a disagreement between the participating Lessor
| and the RealPage Pricing Advisor, the dispute is often
| elevated _to the Lessor's management for resolution_ , and
| specific reasons justifying a departure from RealPage's
| pricing level are usually required.
|
| If I take a Playstation to the checkout counter at Walmart
| and say "Instead of $500, how about $450?", the person at the
| checkout counter doesn't have the authorization to change the
| price from the price enforced by the checkout system. They'd
| have to call over a manager and make the case as to why I
| should be able to buy it for $450 instead of the enforced
| price the system already set.
| jnovek wrote:
| I responded to this in another comment; TL;DR I believe
| you're looking at the wrong paragraph in the article.
|
| The first approval is done by the Pricing Advisor (an
| employee of RealPage) and a second approval is done by a
| manager at the Lessor's office.
|
| https://news.ycombinator.com/item?id=34928065
| mjcl wrote:
| I used to work for a large property management company
| that used YieldStar, the initial approval went through an
| in-house team and final approval happened by on-site
| staff. Smaller companies that couldn't justify an in-
| house team would use YieldStar for the initial
| review/approval.
| anonymouskimmer wrote:
| From skimming over the relevant portions of the complaint
| that this quote is excerpted from, it looks like "Lessor's
| management" is probably the management team _employed by
| RealPage_ to manage the Lessor 's property (Lessor having
| ceded management from themselves to RealPage). Please
| explain if this is not the case.
|
| See sections 46 and 47 in the complaint:
|
| 46. RealPage and participating Lessors have provided one
| another with such mutual assurances, agreeing among
| themselves not to compete on price for the sale of
| multifamily residential real estate leases. They have
| effectuated their agreement through two mutually
| reinforcing mechanisms. First, participating Lessors have
| agreed to set prices using RealPage's coordinated
| algorithmic pricing. Second, participating Lessors have
| agreed to stagger their lease renewal dates through
| RealPage, to avoid (otherwise natural) oversupplies in
| rental properties.
|
| 47. RealPage's coordinated algorithmic pricing allows
| participating Lessors, in RealPage's words, to "outsource
| [their] daily pricing and ongoing revenue oversight" to
| RealPage, with RealPage pricing participating Lessors'
| "properties as if we [RealPage] own them ourselves"--that
| is, as if RealPage and its participating Lessors were
| operating as a monopolist.
| vel0city wrote:
| RealPage isn't in the property management business. They
| don't manage properties themselves, they make software
| for property managers to consume.
| anonymouskimmer wrote:
| Then why are "Lessors" mentioned as the ones agreeing to
| RealPage's policies and not "Property Managers"? And why
| is the term used "Lessor's management team", and not
| "Lessor's property management team"?
|
| I think you might be right, it just doesn't seem obvious
| to me.
| vel0city wrote:
| You'd probably need to understand a bit more about the
| basics of these large property ownership and management
| to kind of get what all is at play here. I'm more versed
| in commercial property management, but large scale
| apartment residential isn't often far off.
|
| So you'll have some group of investors which pool
| together a bunch of money (like REITs, not always) and
| buy a building (normally the people who build these
| things don't hold on to them very long, lots of
| specialization). This organization is the "ownership".
|
| The ownership usually doesn't know/doesn't want to deal
| with the day to day management of the property, they're
| just the financials kind of people. They hire a
| management company. The management company works with the
| ownership to understand budgets for the building,
| expected revenues, etc. Management deals with all the
| contractors to make the building operate.
|
| Often, the management company then hires a leasing
| company, or might have a leasing arm of the company. This
| is then the sales side of the whole business of the
| building. These people are then in charge of finding
| tenants and be a bit of the outward customer facing side
| of the operation. These are the people you'd talk to when
| you're wanting to negotiate on pricing. However, they
| don't directly control the prices. Remember, ownership
| wants to ensure certain revenues for the building, and
| management is in charge of hitting budgets. So that front
| line agent just making up numbers all willy-nilly can
| have a lot of effects on not just that leasing company,
| but the management company that contracted them, and the
| ownership company that contracted the management company.
| That person you're talking to about the lease might be a
| contractor of a contractor of the ownership of the
| building, and ultimately it's the ownership's money on
| the line.
|
| All of these groups are often different organizations and
| companies, and this structure is just one example out of
| many. As mentioned, sometimes management teams have their
| own leasing arms. Sometimes ownerships have preferred
| leasing partners and will push management to use some
| other leasing company. So its not always a single "this
| person _always_ reports to that person " kind of
| structure, so that's why its pretty vague in these
| filings.
| anonymouskimmer wrote:
| Thanks, that makes sense.
| jeffbee wrote:
| You know, there just aren't that many vacancies. If you want to
| break this cartel you need inventory.
|
| I recently crawled all the listings in my county that are hosted
| by marketing company Engrain, and the problem is there just
| aren't that many. The only buildings with a lot of vacancies are
| new ones that are still leasing up.
| https://observablehq.com/@jwb/survey-of-east-bay-apartment-v...
| makestuff wrote:
| I check my NYC apartment website at least 2-3x per week since my
| renewal is coming up soon. The variance between pricing is
| insane. There is a 2k delta between 1br apartments on the SAME
| FLOOR, and the cheaper one is the better layout. They change
| every week though by hundreds of dollars. It makes absolutely
| zero sense to me.
| hn_20591249 wrote:
| I got a rental raise for a 1 bedroom in Bushwick from $2700 to
| $3500.
|
| I told them this was unreasonable for the area, but they
| refused to budge on the price, offering a paltry $50 discount.
|
| That apartment eventually got re-rented for $2700 according to
| StreetEasy as they couldn't find tenants at the price point
| they (or the "algorithm") wanted.
| HDThoreaun wrote:
| Many people are willing to pay more to not move, especially
| if they're in a walk up. Forcing returning tenants to pay
| more seems like one of the first moves landlords would try.
| solarmist wrote:
| A thought I had just now is that historically prices were static
| until an event happened to cause in increase, now prices are
| becoming dynamic and monotonically increasing unless an event
| happens.
|
| The price collusion is greed/growing pains for prices being
| dynamic by default.
|
| This is another social norm that is being discarded by modern
| society. In the past, you didn't go to a store two days in a row
| and see different prices without a good reason.
| none_to_remain wrote:
| Inflation is not a new phenomenon
| solarmist wrote:
| It's not, but they way we dealt with it has changed.
| saulpw wrote:
| I go to the grocery store multiple times a week and see
| different prices for things I buy. They are constantly changing
| prices, with sales and offers and 2-for-1. I know this is to
| confuse me into not knowing what the "real" price of a good is,
| so that when I run out of ketchup I'm somehow fine paying $8
| for a bottle.
| solarmist wrote:
| Yup. That is another example of this exact same thing.
| Probably the more common one.
| jconley wrote:
| Housing is not a right in the US. It's a for-profit endeavor.
| Unless that fundamental thing changes expect rents to go up as
| much as the market will bear and landlords to do everything to
| make as much profit as possible.
|
| Side note: I doubt this is actually "AI". Probably some
| heuristics.
| stewx wrote:
| And this is totally fine as long as the supply side of the
| market is allowed to react and build more supply in response.
| sixo wrote:
| Though, even if the supply side was immediately opened up,
| some redistribution is justified to make up for the
| historical lack of capacity and the inevitable decade it
| would take to catch up with demand.
| MonkeyMalarky wrote:
| Your mere existence without profiting others is practically
| criminal.
| sixo wrote:
| Well, no, not to defend it _really_ , but the premise is that
| your use of the amenities of modern society, which people put
| a lot of effort into creating, is earned by providing profit
| to others, not merely an entitlement.
|
| This conflicts with our moral sense (in part because there's
| nowhere you can go to opt out) so we backstop it with
| entitlement programs. But the premise is a least in principle
| fairly sound; not as evil as what you articulated.
| smt88 wrote:
| > _Housing is not a right in the US_
|
| Price-fixing is not a right in the US. It's explicitly illegal.
|
| We as citizens should be strongly opposed to anything that
| makes housing more expensive because it contributes to
| homelessness, which is much more expensive than just forcing
| landlords to actually compete with each other (you know, like
| the free market is supposed to).
|
| The biggest threat to a competitive market isn't the government
| in the US. It's the accumulation of power by a small number of
| actors who control the majority of the supply side.
| EGreg wrote:
| It is part of a much larger trend with AI:
|
| https://news.ycombinator.com/item?id=34928179
| Animats wrote:
| Sellers hate a free market where they have to compete on price.
| They don't want to live in fear of the other guy cutting their
| price and stealing their market share. You need a monopoly to
| win. That's the whole premise of Thiel's "Zero to One", and
| indeed, the VC community. YCombinator would never fund something
| that had to compete on price, unless there was some huge price
| advantage possible.
| pizzaknife wrote:
| real page isnt the only prop management software corp doing this,
| i know first hand(and quitting that job was a great feeling).
| newaccount74 wrote:
| Holy shit, how bad is that? People have been saying that market
| demand is the reason for rising rents, but in reality it's just
| landlords colluding to fix prices and leaving units empty to
| create artificial scarcity?
|
| This is worse than I thought.
| denimnerd42 wrote:
| They've been doing this manually with NYC storefronts forever.
| Now the automation exists (and has for at least 10 years) to do
| it globally. Yikes. i say at least 10 years as that's the last
| time I rented. My apartment definitely used this software then
| and realpage hq is just across the street.
| jareklupinski wrote:
| if you search nybits.com (i think the last nyc apartment
| aggregator that sorts by date), you can see a daily flood of
| realpage-adminstered buildings shifting their units' prices
| up or down a few dollars every day
|
| I don't think they do this on purpose; when I called one of
| the buildings I was interested in, their leasing agent was
| surprised I could even see the 'real price'...
| anonymouskimmer wrote:
| It's both, not an either/or.
| rootusrootus wrote:
| It's not just landlords, no. Some people want to force
| urbanization, so the government creates urban growth boundaries
| to limit sprawl. But then many of the people inside the
| boundary don't want high density housing near them, so they
| support zoning to keep it away. And mostly I don't think
| landlords are the ones leaving units empty -- it's investment
| groups that don't want to have tenants in the first place, they
| don't want to be landlords, they just want an asset that grows
| in value.
|
| There is a very legitimate supply problem, and blaming
| landlords won't solve it. They only have the leverage they do
| because the government gave it to them. We could make the gov't
| back off if we wanted to, but by and large we don't seem to
| want to.
| crooked-v wrote:
| With investment groups, I've seen a few convincing theories
| that most of the mass investment group housing purchases were
| a result of the zero interest rate for an extended period and
| the effect of that on other investments, and that big
| investors are likely to try and divest themselves of all
| those houses over time now that interest rates are back up
| all at once.
|
| That still leaves landlords, but the only reason landlords
| have outsized power in the first place is that there's a
| massive housing deficit in every place in the US people
| actually want to live.
| bequanna wrote:
| The primary reason behind rent increases is the sudden,
| artificial increase in the number of households.
|
| This is likely due to the suspension of student loan payments
| and will correct if/when these payments resume.
| HDThoreaun wrote:
| NYC vacancy rate is currently 4.5%, less than 1% above all time
| lows. Yes, artificial vacancy exists, especially in the ultra
| luxury market, but the data seems to show the extent is
| overblown.
| jareklupinski wrote:
| > More than 353,000 units were vacant but unavailable in
| 2021, up from 248,000 in 2017.
|
| A 42% increase in 'vacant but unavailable' sounds pretty
| significant, even if artificial...
|
| https://www.thecity.nyc/2022/5/17/23108792/nyc-apartment-
| vac...
| arciini wrote:
| Housing as a for-profit business kinda makes sense, but I think
| the main takeaway of the article is this:
|
| > The thing is, "the algorithm" should have very little to do
| with that sick feeling. The coldness of the interface and robotic
| voice certainly make for a stark contrast with the thing you are
| doing, but they aren't the cause. The moment you start thinking
| about someone's longtime home as something that can "align with
| strategy," and about pricing someone out of their longtime home
| as "an adjustment that would be more beneficial," you have
| morally lost. It doesn't really matter how you go about making
| that adjustment.
|
| The tool and the training for the tool definitely matters, but
| the truth is, making business decisions about housing will
| necessarily hurt people in ways that are disproportionate to the
| amount of additional income a landlord gets.
|
| This sucks for everyone, but especially for less mobile or
| financially-secure tenants. I don't think there's a great
| solution for the American rental system yet other than less
| profit-maximizing owners or schemes like HDB flats in Singapore.
| fsckboy wrote:
| > _but especially for less mobile or [less] financially-secure
| tenants_
|
| the burden of taking care of people who are less able to take
| care of themselves is not a burden that the government should
| place on certain individual people or individual companies, so
| rest of us can go on about our days happy that we don't have to
| think about it any more. If you want us to redistribute money
| to people so they don't need to move, the bite should equally
| come out of your and my income and bank accounts, not just
| landlords'. If you think that the govt should buy all this
| property so it can do a great job of being a landlord and
| tenants will be happier that way, get those laws passed. Till
| then, the fallback is not to simply punish rental property
| owners. (disclosure, I own property but I don't rent it out
| because I don't want the hassle, the money is not worth it)
| Avshalom wrote:
| >punish rental property owners
|
| Y'all see this rhetorical jump right? arciini made no mention
| of any action against landlords but to get out ahead of any
| possibility even as small as social-pressure against raising
| rents fsckboy has both escalated the framing language to
| "punishing" them and also shifted the frame from the plight
| of renters to the plight of rentiers.
| rootusrootus wrote:
| It's not that big a rhetorical jump, though, is it? There's
| already a lot of anti-landlord rhetoric in this discussion,
| and historically it heads that way every time.
| anonymouskimmer wrote:
| It's not about punishing, it's about constraining power,
| and aligning power with particular responsibilities. Is
| allocating certain powers to certain branches of
| government "punishing" the other branches? Is requiring
| certain duties from certain industries "punishing" those
| industries? I guess we're punishing Norfolk Southern by
| requiring them to pay for the cleanup in East Palestine,
| OH.
|
| "If you want us to redistribute money to people _in East
| Palestine_ so they don 't need to move, the bite should
| equally come out of your and my income and bank accounts,
| not just _Norfolk Southern 's_."
| anonymouskimmer wrote:
| > If you want us to redistribute money to people so they
| don't need to move, the bite should equally come out of your
| and my income and bank accounts, not just landlords'.
|
| So you're saying everyone should pay for an externality of a
| particular industry? Socialize the costs?
| giraffe_lady wrote:
| This conclusion hinges on viewing landlord as a range of
| human identity, like mother or craftsman. Landlords aren't a
| type of people, it's an activity, an economic relationship.
|
| Deciding that the correct place for that burden _is_ on
| landlords is a valid and consistent view. That this is part
| of the risk and responsibility incurred by the action of
| landlording. No one is forced to be a landlord and so in this
| view if you don 't like that responsibility you simply don't
| landlord.
|
| It's not "punishment" to reevaluate where we let burdens
| fall, and require that some roles now carry burdens that they
| were once free of. And if it is, shit, we punish lots of
| people for all kinds of things, why are landlords exempt.
| ROTMetro wrote:
| Car companies shouldn't be required to add safety features.
| If the market wants it car companies will add them. Seatbelts
| should be an add on expense like they were in the 1960s. Get
| the government out of the business of looking after citizens!
| anonymouskimmer wrote:
| I think you're getting downvoted because the analogy
| doesn't quite parallel, as car purchasers are indeed paying
| for those seatbelts in the car price.
|
| A better car analogy would be the mandate of safety
| features such as back-up cameras that the purchaser pays
| for, but ultimately benefit others.
| nordsieck wrote:
| > I don't think there's a great solution for the American
| rental system yet other than less profit-maximizing owners or
| schemes like HDB flats in Singapore.
|
| Fundamentally, the solution is to allow much, much more
| building.
|
| So far voters are not a fan. Perhaps that will change with the
| increasing rise of corporate ownership.
| j_walter wrote:
| > So far voters are not a fan.
|
| Correction...voters are a fan of more housing being built
| (affordable housing even), just not in their neighborhoods
| where it will negatively impact their property values and
| status quo.
| medvezhenok wrote:
| In other words, it's a classical prisoner's dilemma.
|
| The only way out is forcing voters to accept housing being
| built in _their_ neighborhood.
| fwlr wrote:
| "So far voters are not a fan."
|
| While I'm always uncomfortable with violent rhetoric, the
| very public antipathy around "rent-seeking parasites" does
| give me hope that in the future, fewer voters will see
| themselves as "temporarily embarrassed landlords".
| crooked-v wrote:
| For more, the more infuriating rhetoric is the supposedly-
| YIMBY types who act like property developers are evil scum
| for constructing and selling buildings at anything other
| than a loss.
| rootusrootus wrote:
| I don't think it's that many people aspire to be a
| landlord. It's just that homeowners have put a large amount
| of their net worth into real estate and declaring open
| season on new building directly hurts them.
|
| We can easily see this as millenials have gotten into
| owning homes themselves. People are quite good at tending
| to their own self interest.
| noirbot wrote:
| For sure. I have no aspiration to be a landlord, but I
| bought a place last year with a mortgage payment a bit
| higher than what I was paying to rent an equivalent place
| before. This made good financial sense.
|
| Now, let's suppose somehow we build all over my
| neighborhood over the next three years and rent craters.
| Instead of paying, say, 1200 on my mortgage to own a
| place instead of 1000 in rent, I could now be paying 600
| in rent vs. 1200 on a mortgage. I'm now in a bind where
| I'm losing money every month over renting the place next
| door _and_ there 's a good chance my property even when I
| pay it off is worth less than I've paid.
|
| I'm certainly not against building, but if somehow every
| YIMBY dream came through for them near me, I've
| definitely just made a really terrible financial decision
| that's going to dramatically change the trajectory of my
| life. Moving to another city for a job is now borderline
| impossible if I'm tens or hundreds of thousands of
| dollars underwater on my mortgage, and couldn't rent the
| property for anything close to what I'm paying.
|
| Like many fixes to societal ills, it's easy to look at
| the end result and see how it's better for most people,
| but it's likely to hurt a lot of people who made totally
| reasonable choices.
| dublinben wrote:
| It's illogical for the value of your land to decrease if
| your neighborhood has been substantially upzoned.
|
| Instead of being able to fit a single house worth an
| imputed rent of $1000 on your lot, you'd instead be able
| to fit a duplex, renting for $600 + $600 = $1200. If
| supply has increased so much to lower equivalent rents a
| whopping 40%, then you're probably looking at a situation
| more like now being able to build a quadplex or small
| six-unit apartment building on your lot. At $600 x 4 =
| $2400 or $600 x 6 = $3600 you've actually seen the value
| of your land double or triple in this scenario.
|
| In this hypothetical scenario you'll now have so much
| extra money, that you could easily move to more
| expensive, quieter neighborhood that hasn't been upzoned
| yet. If you're lucky, you'll be able to repeat the
| process there as well.
| noirbot wrote:
| Or you purchased a condo or townhouse where there's no
| way to sell the land under it or redevelop it without
| getting a large number of other people to all decide to
| move/leave at the same time.
|
| If you're one of the first people in an upzoning
| neighborhood, you're the one who loses value as the rest
| of the area upzones.
|
| The price to buy 1/100 of the condo/duplex/quad supply in
| a zipcode is almost definitely higher than in a few years
| when there's 1000 available. Sure, there's ways it could
| appreciate enough to offset it if it also becomes a nicer
| and more desirable neighborhood at a counteracting rate,
| but that's not for-sure.
|
| This situation specifically screws the people who are
| doing what you'd want and not over-purchasing a single
| family home as an investment and instead buying a smaller
| part of some complex.
| nordsieck wrote:
| > Like many fixes to societal ills, it's easy to look at
| the end result and see how it's better for most people,
| but it's likely to hurt a lot of people who made totally
| reasonable choices.
|
| The US Government sets policy all the time that hurts
| people who own stocks and bonds. And mostly people are
| fine with that. I don't see why home owners ought to be
| afforded a special level of protection for their
| investment.
| hackernewds wrote:
| Note even right now the Fed has trillions backing the
| real estate markets from collapsing. The govt creating
| winners and losers in a free market despite any
| fundamentals, was never supposed to be the design but
| here we are.
| noirbot wrote:
| The fundamental difference is that I can't sleep and
| shower in my bond portfolio. I didn't buy my house as an
| investment, I bought it because I have to live somewhere
| and it made financial sense vs. renting. I'd be perfectly
| happy selling it for roughly the same amount in 5, 10, or
| 30 years.
|
| I also was explicitly saying that I _want_ there to be
| policies in place that will "hurt my investment" because
| I think it's a good thing in general, but it's important
| to not just assume that building more is only going to
| hurt rich rent seeking landlords that are easy to rally
| people against.
|
| There's a lot of financial and cultural incentives
| towards home purchasing in the US, so to quickly move to
| instead make renting the preferred option in policy is
| going to hurt a lot of people and cause issues that may
| not be easy to predict. It doesn't mean it's not worth
| doing, but it's important to look at it holistically and
| not just see it as only punishing bad rich cartel owners
| who deserve to be hurt.
| teachrdan wrote:
| > The US Government sets policy all the time that hurts
| people who own stocks and bonds.
|
| Could you give me any recent examples of this happening?
| It seems the exception, not something that happens "all
| the time."
| nordsieck wrote:
| > I don't think it's that many people aspire to be a
| landlord.
|
| I think it was a reference to this famous quote:
|
| > John Steinbeck once said that socialism never took root
| in America because the poor see themselves not as an
| exploited proletariat but as temporarily embarrassed
| millionaires. -- Ronald Wright, A Short History of
| Progress
| rootusrootus wrote:
| I got the temporarily embarrassed reference but figured
| the comment was otherwise serious.
| anonymouskimmer wrote:
| > I don't think there's a great solution for the American
| rental system yet other than less profit-maximizing owners or
| schemes like HDB flats in Singapore.
|
| There are various co-ops that exist in the US to buy things
| like apartment complexes that the tenants then take ownership
| in.
|
| There are things such as Council housing in the UK.
|
| There are various alternate reality types of systems that
| basically haven't been tried, or have only been tried in small
| numbers.
|
| Once you bring in profit-maximizers into a larger, mostly free-
| market sector you tend the entire industry in the one direction
| of profit-maximizing (as the profit-maximizers can outbid the
| others on newly entering housing).
| 98codes wrote:
| > to buy things
|
| Exactly. That's not renting, and co-op owners aren't
| landlords unless they turn around and rent the unit out.
| anonymouskimmer wrote:
| Yeah, but it's an ownership alternative for people who are
| otherwise stuck being long-term renters. And for long-term
| renters I think ownership is the better alternative in many
| cases.
| shuckles wrote:
| The HDB system's outcomes aren't great if not paired with
| abundant supply. Singapore market rents are growing fast, HDBs
| have all sorts of unsavory (to Americans) queueing and
| prioritization rules, and there are plenty of rent seeking HDB
| owners who sublet their flats at high prices.
| causalmodels wrote:
| IMO the ethnic quotas would be the most unsavory aspects to
| an American audience.
| shuckles wrote:
| The various preferences for heterosexual, married couples
| with kids wouldn't be popular either.
| ChickenNugger wrote:
| Which is funny, because that's the very thing that a
| nation should be very invested in: producing more of its
| own citizens.
| notahacker wrote:
| Suspect "virtually everyone lives in government housing
| projects" would be an even harder sell...
| shuckles wrote:
| HDBs are high quality and safe. I don't think most
| Americans would object to owning their own apartment if
| the builder and operator happened to be a government
| agency.
| notahacker wrote:
| I suspect plenty of Americans would object just to the
| "apartment" bit! A successful housing solution for
| Singapore's situation but one that's a million miles from
| the suburban American Dream.
|
| The safety of HDBs, apart from reflecting Singapore's low
| crime rate in general, also reflects Singapore _not_
| having the idea that high rise government housing
| projects are somewhere only the poor and desperate would
| want to live and their condition a reflection of
| Singapore not having the belief that government budgets
| are things to be slashed....
| telotortium wrote:
| At the very least, the apartments would have to be quite
| large, closer to a house in floor area, for Americans to
| accept them. Few Americans would be willing to raise 2
| children in an apartment less than 200 m^2.
| shuckles wrote:
| No, apartments are very popular with Americans. The few
| that are allowed to be built are very expensive.
| ketzo wrote:
| A significant fraction of Americans would object
| _explicitly_ on that point, yeah. Wouldn 't matter if the
| apartments had solid gold toilets.
|
| Neoconservatism is a hell of a drug.
|
| Wouldn't matter for the areas that could actually _use_
| more housing (dense urban ares), but there is an
| extremely strong anti-government streak in the U.S.
| pydry wrote:
| The whole point of the HDB system was to streamline and
| standardize the creation of decent quality housing. It worked
| spectacularly at creating abundant supply. Compared to the
| 1950s the supply has taken off like a rocket.
|
| The "problem" was that population growth kept up with supply
| - initially through an extremely high birth rate and then,
| when that collapsed, through extremely high immigration
| rates.
|
| Given the high population growth and low availability of land
| the growth in housing stock has been pretty amazing. Both the
| quality and the quantity certainly blows the US and Europe
| out of the water.
| shuckles wrote:
| I don't think Singapore has run out of (re-)developable
| land. It has lots of low rise homes that have very low land
| value tax assessments. In any case, I agree their current
| situation is better than ours, but my point that the HDB
| model cannot solve housing costs without abundant supply
| stands.
| firstplacelast wrote:
| There are tons of things America could do for the rental and
| home-ownership market, but we won't because people will scream
| that it's unfair and it will hurt the upper class and existing
| home owners.
|
| The government could force and pay for construction of massive
| numbers of condos/townhouses in/around large cities (say
| 20-40million). Sell them to first time home-owners for
| extremely cheap (say 200k) with all types of restrictions on it
| being owner occupied and only allowing the owner to recoup a
| certain % of appreciation after X numbers of years if sold (say
| 3% each year lived in).
|
| I'm sure that's problematic and a team of people smarter than
| me could come up with a much better system, but there are very
| tenable solutions with the ability to change laws/policies and
| a massive pocket-book.
|
| The US used to give away large parcels of land to people just
| to move out west. So it's not like there's not precedence for
| helping citizens with real estate.
|
| Nothing significant will be done in our lifetimes though, oh
| well.
| rootusrootus wrote:
| > I'm sure that's problematic and a team of people smarter
| than me could come up with a much better system
|
| Agree, and disagree. Distortions of the market rarely go as
| planned, so trying a massive intervention is likely to have a
| whole bunch of negative side effects. And I don't believe
| smarter people are more likely to be successful with their
| own attempts.
|
| Keep it simple. Build more. Drop the zoning restrictions,
| reimagine the purpose of urban growth boundaries. Supply and
| demand actually does work.
| HDThoreaun wrote:
| Japan style zoning and LVT completely solves the problem.
| Maybe throw in a vacancy tax in some areas to keep the
| progressives happy and environmental standards deregulation
| for conservatives.
| tonymet wrote:
| Policymakers are not giving enough attention to the impact of
| phony pricing signals like this. See also Zillow Score / Redfin
| price. You can inflate prices if you have a broad effect .
|
| A good example is a study of payday loans that tend to move
| upward due to price signals set by local lawsn
| more_corn wrote:
| Perhaps we should refer to it as "landlord price collusion
| software" Call a spade a spade.
| sublinear wrote:
| The line between "best practices" and "cartel" is very thin.
| matchbok wrote:
| This is the natural result of policies that make it difficult to
| build new housing. Landlords only have immense power in areas
| where demand outstrips supply.
| maxsilver wrote:
| This is not true. Landlords have immense power everywhere, even
| in markets where supply far outstrips demand. (Much of the non-
| coastal US are places where supply far outstrips demand for
| many years, and landlords are _still_ immensely powerful here)
|
| You still have to break up price fixing cartels like this. You
| can't just lean back and pretend _" moar supply"_ will
| magically fix anything.
| matchbok wrote:
| As a landlord, I can tell you this is false. A good tenant
| for cheap rent is worth much more than a few extra bucks.
| Have you owned rental housing before? Didn't think so.
|
| The cute comments ("moar supply") signify your ignorance on
| the various aspect of the housing market at large. And that
| is an unproductive comment that demonstrates your overall
| lack of understanding of the issue at hand.
|
| This "cartel" is a symptom, not a cause. Nobody is price
| fixing sedans, are they? I wonder why. Oh, supply of hundreds
| of options and price points? Hmmmm....
| rglover wrote:
| Just had a tangentially related conversation about a similar-ish
| process that restaurant managers/chains use to figure out
| viability of new locations. They just blindly use software to
| tell them if the community size/traffic flow will generate
| revenue relative to costs.
|
| Seeing this article, too, along with a dozen other personal
| anecdotes (and seeing the early stages of blind-trust in AI), I'm
| realizing we're moving toward a point where over-trust in "what
| the computer says" is going to have material effects on
| civilization.
|
| Ironically, the "Terminator Scenario," won't be what destroys us.
| Instead, it will be people's brains turning to mush due to over-
| reliance on AI/algos/etc. We'll simply hit a point where few if
| any people exist who understand the analog side of what the
| software is automating.
| neilv wrote:
| The style of this article isn't quite something that I'd want to
| forward to my state AG's office.
|
| It'd be easier to forward reporting by the WaPo or NYT that makes
| a credible case for price-fixing.
| wpietri wrote:
| So what would the opposite of this look like? What software could
| we make for renters that would increase their market power?
| DoctorOW wrote:
| Realpage isn't the only software in that space. A software
| which finds the lowest possible rents and keeps Realpage as a
| last resort would be useful. It'd be difficult to monetize.
| nvr219 wrote:
| Develop software to help manage a tenants' union and software
| to help them find lawyers to help with collective bargaining.
| TheBigSalad wrote:
| craigslist
| halfnormalform wrote:
| A network of illegal subletting.
| maxbond wrote:
| I don't really think that's how software works. When software
| meshes with society, it greases the skids on existing power
| structures, with a few notable exceptions. So software is
| really good at enabling landlords to be more extractive,
| because landlords were already holding all the cards in the
| first place. You could write software that helps people, say,
| form a tenant's union, or lobby their legislators to create
| more protections, but it's the union or the government - other
| power structures - that are enhancing the power of tenants by
| directly opposing the power of this cartel.
|
| There's literally nothing that software could do to enhance
| their _market_ power. The most you could do is help them to
| communicate about who the worst actors are, to try and level
| out the information asymmetry. But everyone still needs housing
| and there 's still only so many units - someone is going to end
| up a tenant of the extractive landlords, whether we all know
| they're extractive or not. It's not like tenants of slumlords
| don't understand that that is their situation, it's poverty
| keeping them there, not a lack of market data.
| wpietri wrote:
| > When software meshes with society, it greases the skids on
| existing power structures,
|
| Ah, so that's why YouTube content is mostly from the
| television companies that were powerful around the year 2000.
| And also why long distance telephone calls are the same price
| and most of the revenue is being captured by AT&T. And
| e-commerce, of course, is dominated by the same companies
| that ruled the malls in the 1990s.
| maxbond wrote:
| I did say there were exceptions. How about how traditional
| media can easily take all the money from your YouTube video
| if you have a 30s clip of copyrighted music, or end your
| YouTube career entirely with spurious copyright claims? How
| about surveillance technology enabling repressive regimes?
| Or how AirBNB enabled landlords to effectively charge
| higher rents by moving to short term rentals, and to run
| hotels while shirking regulations?
|
| Most of the examples you've listed are just changing hats
| (and others aren't power structures - long distance rates
| are not a power structure). Amazon wasn't around in the age
| of malls? Okay, sure, but is "malls/department stores, but
| really big, and online" really a different arrangement than
| before, or the same thing with more centralization? I view
| that as a consolidation of power among broadly the same
| group of people (American corporations & investors).
|
| This is a special case of, "technology solutions don't
| solve social problems." Technology improves and gets
| cheaper, no contest. That doesn't mean I can write software
| that will change my relationship to society anymore than I
| can write software that makes my computer levitate.
|
| If you're interested in proving me wrong, it seems to me
| that the counterargument wouldn't be an example of
| technological change, but a theoretical framework that
| would enable you to analyze a social problem or power
| structure and come up with a piece of software that would
| radically alter the outcome, with results better than
| chance. Obviously it wouldn't be reasonable for me to
| demand a fully developed theoretical framework from you in
| a casual conversation, so I'm happy to concede I may be
| mistaken if presented with a convincing seed or intuition
| that framework could be crystalized from.
|
| Alternatively, I'd absolutely concede I was wrong if
| presented with a convincing hypothetical piece of software
| that would radically change the relationship between
| tenants and landlords.
|
| You don't have to do any of that of course, I'm not trying
| to move goalposts, I'm trying to point out where my
| argument might be vulnerable in the interest of good faith,
| and because I'd love to be wrong about this.
| koromak wrote:
| I'm not sure theres an angle of attack here. People need to
| live somewhere, they don't get to argue the terms.
| wpietri wrote:
| Leases can definitely be negotiable, even as an individual.
| I've done it! But I'm wondering what could be done if, like
| RealPage, we enable collaboration.
| toast0 wrote:
| Most people have options... A single person can rent a whole
| house, a 2 bedroom apartment, a 1 bedroom, a studio, or just
| a room out of a larger unit (or part of a shared room). And
| choose from a range of locations.
| maxbond wrote:
| A wealthy single person can muse between renting an entire
| house or subletting a single room, sure. For most people
| these options are worlds apart, and they wouldn't entertain
| both of them at once.
| trollerator23 wrote:
| This is a friggin' cartel and somebody should be doing jail time
| shaaaaawn wrote:
| This post hits close to home and could not be more accurate
| satire of the pains of property management. I spent a number of
| years building a competitor to RealPage's Resident Portal,
| ActiveBuilding (shoutout https://henrihome.com).
|
| RealPage and Yardi dominate the industry with some of the worst
| software imaginable. The price fixing and competitiveness in the
| industry is a feature not a bug.
|
| ActiveBuilding basically built thefacebook.com for residents
| where the sticky feature was online rent payment. They of course
| got bought by RealPage which continued to operate it as is for a
| long time with few improvements, but landlords were tied to the
| ecosystem and didn't really care about the resident experience as
| long as they could pay rent online and submit maintenance
| requests. Also who the F decided that they don't need spaces in
| Product names over there?! ActiveBuilding RealPage.
|
| Rant over
| gaoshan wrote:
| When rent gets like this (very high and controlled by a cartel as
| appears to be the case here) then there needs to be a remedy and
| the free market isn't going to be it. If the subject were some
| luxury good that was being impacted it would be of much less
| concern but this is housing. It's a fundamental human necessity
| and it's being manipulated.
|
| The ideal here should be to cause the least harm. To everyone
| involved. Landlords should not be ruined but even more important
| should be the right of people to reasonable housing costs. Again,
| this is not a luxury... it's a basic human requirement and since
| it appears to be getting out of hand there needs to be a remedy.
| The only group powerful enough to provide that remedy, in our
| system, is the government.
| crooked-v wrote:
| The remedy would be taking every city over a certain
| population, slam dunking local restrictive zoning and
| permitting straight into the trash, and replacing it with
| permissive "shall issue" zoning at the state or national level,
| in the style of Japan [1].
|
| There's no great mystery here. There just aren't enough housing
| units in the places people actually want to live, and local
| cities are keeping it that way.
|
| [1]: http://urbankchoze.blogspot.com/2014/04/japanese-
| zoning.html
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