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This is mostly a distraction from the underlying issue. The algorithm helps sellers to maximize prices given the supply & demand so, yes, this probably is respo

This is mostly a distraction from the underlying issue. The algorithm helps sellers to maximize prices given the supply & demand so, yes, this probably is responsible for a few percentage points of increase in price, in the same way that price comparison websites are responsible for a small decrease in the price of car rentals. But the underlying problem here is the supply & demand! Rentals are competitive, an algorithm can't force people to pay more than an comparable rental property is charging. It's the lack of housing supply in areas like SF is responsible for rents being a multiple of what they could be. Developers want to build apartments, but are prevented from doing so by local regulations. So we need to change those regulations or, as is increasingly happening in the last couple of California's legislative sessions, take control away from local authorities (e.g. SF Board of Supervisors).

midislack 4y ago
We could also just not live in San Francisco. That's a better option for many.
- tjr225 4y ago
  And yet people love it and want to call it home, and are willing to make sacrifices to do so. I know I have here in the Seattle area. Mind ya own business!
  - nkrisc 4y ago
    I think what they’re really saying is that maybe not every person who wants to live in SF, for example, can. There’s some upper limit on how many people can live there and if more people want to live there than can prices will go up. So maybe not everyone who wants to live there gets to.
    - bombcar 4y ago
      In the past this would cause other places to become “more San Francisco-like” (arguably Seattle itself has changed since the 80s and perhaps in this direction). Why that doesn’t occur could be interesting for discussion.
      - nkrisc 4y ago
        I’m not very familiar with SF and the Bay Area, but from what I have read about it my impression is that real estate in communities surrounding San Francisco and the Bay Area in general have absolutely been affected by the real estate situation in SF and become more San Francisco-like in terms of housing prices. Again, not from out that familiar with the area so maybe I’m off the mark here.
        bombcar 4y ago
        They have - what I'm referring to is the older "city migrations" where if Chicago was "too big/expensive" then Detroit would come into its own. So instead of SF continuing to expand to engulf all of California, other cities in other areas would begin to grow. Somewhat this has happened - Redmond near Seattle, etc, but we haven't really had any "ground up" new cities that I can recall, they're all offshoots/suburbs of existing ones.
  - refurb 4y ago
    Then I guess they’ll pay that privilege then?
  - midislack 4y ago
    Enjoy but don't pretend YOUR social problems are MINE. You chose to take them on.
    - deleted 4y ago
      [deleted]
geofft 4y ago
I very much agree with you that the lack of supply is a major problem, but the article is making a case here that what the algorithm is doing is tantamount to price-fixing / collusion. Even in markets where supply is much easier to come by than housing and does not have the entrenched political dysfunction restricting supply - such as RAM chips and canned tuna - price-fixing is a problem. There's an analogy in the article to airplane seat pricing. The solution there was to tell the airlines they couldn't collude with each other, not to say "The real problem is the lack of flight supply."
- maximilianroos 4y ago
  Yes, I think that's a fair point. But I don't see any actual evidence that collusion is happening. Collusion is difficult to pull off! It requires each owner to restrict their supply so that all owners benefit through higher prices. The incentive for an individual owner is to "defect" by renting out their whole supply. Collusion generally requires participants to be able to monitor and enforce each other's behavior. To the extent that owners are increasing prices slightly to benefit themselves, that's not collusion, that's just the market clearing.
shahbaby 4y ago
You say that the underlying problem is a limited supply but why stop there? Why is there a limited supply? How long will looser regulations help until we're back to the same problem? Perhaps we should dig deeper. Why have we organized our society in a way that encourages and almost enforces high population density? The fact is that our current way of living is unsustainable. The housing situation is just one symptom of that.
- NegativeLatency 4y ago
  Carbon emissions from a city resident are much lower than those from a suburb or rural resident. Unless your proposed plan is like living off grid or something, making it easy for people to move to cities seems logical.
  - Silverback_VII 4y ago
    This is something I do not get. In my opinion renting a flat should be a more efficient form of living than owning a house and yet economically(&long-term) renting is often the worse option.
    - bombcar 4y ago
      If you fully account for everything, renting doesn’t always lose - it’s just we’ve had absurd appreciation for so long. Once you account for maintenance items owning becomes decently more expensive than a simple “mortgage + utilities + insurance + taxes” calculation shows. A $10k furnace every 25 years adds something like $40 a month and that’s only one of the many wear items there are. There are other non-tangible benefits to ownership, of course.
      - ghaff 4y ago
        There's (mostly) a distinction between single family homes and condos (though high-end condos can have significant costs even if shared as well in addition to condo fees). But, yes, something on the order of hundreds of dollars per month should probably be budgeted to keep a single family house in steady state over a significant period of time.
joshfraser 4y ago
I mostly agree, but they're actively pushing rental property owners to let units sit empty for extended periods of time while they wait for higher prices. There are a shocking number of high end apartments in cities like SF and NYC that are sitting empty while everyone else is struggling to find an affordable place to live.
- Spooky23 4y ago
  This is where I think inflation and higher rates will be good for the US. The ridiculously low cost of holding assets are making it too cheap to hold and do nothing. Tax policy is a big part of this, but won’t change for many years.
  - lupire 4y ago
    Inflation doesn't help. Higher rates lower inflation, making housing more affordable for wage earners.
    - formerkrogemp 4y ago
      Higher rates reduce affordability in the short term because housing prices aren't falling correspondingly.
- bombcar 4y ago
  This has been common in the commercial sector for decades - and in the commercially managed residential sector (think large apartment complexes). All this is doing is bringing it to smaller apartments and single family rentals. I still feel that if you correctly account for costs and back out appreciation, being a single family home landlord ain’t worth it.
- londons_explore 4y ago
  They sit empty because an empty apartment is still going up in value. If you rent it out, there will be wear and tear (ie. after 5 years it'll need a full refurb), and you run the risk of having tenants stuck in your property if laws change and suddenly you aren't allowed to evict them. Often the capital appreciation is so much greater in value than the rental income (after management, maintenance, etc) that it isn't worth risking the capital income for a tiny bit of rental income.
PragmaticPulp 4y ago
> But the underlying problem here is the supply & demand! This is the answer to most pop-Econ articles. It’s amazing how hard people want to believe that something else is to blame or that traditional economics doesn’t apply for some reason. Algorithms are a popular outrage-bait right now, so I’m not too surprised to see “the algorithm” blamed for high rents now, too.
- BlargMcLarg 4y ago
  Because supply and demand itself is ridiculously broad. I don't even see people claim it isn't S&D given so many say anything from "build more housing" to "slackers go earn more money / save more", but saying supply & demand is the underlying problem is about as useful as saying the needle is in the haystack.
- klyrs 4y ago
  The problem isn't "the algorithm," the article is exceedingly clear that the problem is "the company" and "the captured market" but mostly collusion by proxy. But in this case, it's also the algorithm -- the article has multiple quotes where "empathy" is seen as a problem and that getting humans out of the loop is a boon to profit. The algorithm itself isn't the problem, it's the bloody-minded profit-seeking where capitalists leverage trust in the algorithm to extract maximum rents by leaving properties vacant in the midst of a housing crunch.
  - ajhurliman 4y ago
    Leaving properties vacant is an absolute killer to revenue. I’m reading a lot of people in this discussion cite that property managers are comfortable with vacant units because of all the extra money they’re making off of raising the rents, but you’d need to raise them an incredible amount to justify even a single month of vacancy. Normally 5% is reasonable, but if that number slides it really kills profits. I guess what I’m saying is that the incentives are aligned here: property managers want to see units occupied, and so does everyone else. Will they lower prices until 100% occupancy? No, there needs to be some unoccupied units or there would be no liquidity in the market (if there are no houses to rent and you want to move to a city, how could you move?).
Silverback_VII 4y ago
>given the supply & demand Not if the company keeps apartments empty as mentioned in the article. With such an arrangement between landlords you can increase rent not matter the supply&demand.
- jpollock 4y ago
  There are high costs to an empty apartment. The bank doesn't stop demanding payment if the apartment is empty. Same with property taxes, heating, insurance, groundskeeping, etc. You can even find that the maintenance costs increase as problems that would have been seen and fixed (particularly leaks) are missed.
  - halfjoking 4y ago
    I don’t think that’s incentive enough. There could be an Elysium scenario where the super-rich will pay anything to live in a high-demand area, so the prices go so high almost all properties end up empty. That doesn’t seem beneficial to society, the environment or anyone. If there were strong vacancy taxes the situation would change. Vancouver has a 3% empty homes tax. Let’s keep raising a tax like that until managing empty properties becomes untenable. If we want people to have more affordable homes to buy we should incentivize people living in them over managing them for optimal profit.
mleonhard 4y ago
2011-2015 SF jobs increased 23% and housing increased 3% [0]. During this time, my own rent increased about 10% per year. California legislature is passing some housing good laws, but the state's attorney is not enforcing them. The non-profit CaRLA is doing the enforcement and having success [1]. Their wins in court have set precedent and unblocked a lot of building permits. [0] https://news.ycombinator.com/item?id=19679440 https://news.ycombinator.com/item?id=19679440 [1] https://carlaef.org https://carlaef.org
threatofrain 4y ago
I believe SF would need way more central planning and not less if we want more housing supply. The transportation issue in SF is crazy at the moment and parking is expensive in both time and money. A city needs to upgrade multiple infrastructural elements simultaneously if it wants to make a successful leap into higher densities. In a democratic culture this means getting enough parties on board to accept a big jump in taxes for huge civic works projects like subways. To make all of this coherent this will take a massive and sustained political momentum which can exercise eminent domain in a very big way.
- AlchemistCamp 4y ago
  SF tax revenues increased greatly (double, IIRC) over the past decade. How much more revenue do you believe the city needs?
- opportune 4y ago
  We don’t need more parking. It’s a waste of space and very expensive compared to more public transportation. By all means allow people to build parking if they want to, but there’s no need for parking minimums. I don’t see how more central planning could help. Our central planners love to block housing unless it meets 100 different conflicting requirements they make up on the spot. Just let people build!
  - rdtwo 4y ago
    We can’t have public transit because we gave up on public safety during covid. Lots of public transit is now unsafe or much less safe than before
r12343a_19 4y ago
YellowZeeZee 4y ago
The supply&demand issue does not turn what this company is doing into a "distraction", quite the opposite. Their "algorithm" has an outsize influence on the prices precisely because of the underlying housing crisis. I put algorithm in quotes, because it's clearly just a facade in front of good ol' fashioned price collusion. As the example in the article points out, replace the word "algorithm" with "a guy named Bob" and suddenly it doesn't sound so innocent to say: The companies controlling 90% of apartments in a neighborhood give all their data to Bob, and then Bob tells each one what to price their apartments. It's price collusion by proxy, pure and simple. We shouldn't just ignore it because it's not the biggest cause of the price increases. Yes, we absolutely need to tackle the housing supply problem, but at the same time we need to stop companies like this from exploiting the crisis and driving prices up even further.
- lupire 4y ago
  Ending the crisis by creating housing supply is the way to stop exploiting the crisis. If you stop "this one company" you'll just have someone else making profits and still have people homeless.
  - noasaservice 4y ago
    Not if the RICO act was used against them, and all rental properties are transferred to the renter in payment for fraud, conspiracy, interstate fraud, etc Do you honestly think any other property owner would touch companies like this if this one popped like that?
    - Vvector 4y ago
      I understand your frustrations. But nothing here is anywhere close to a RICO violation. https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corrupt_Organizations_Act https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corru...
      - unyttigfjelltol 4y ago
Bukhmanizer 4y ago
The “it’s all just supply and demand” argument is overly simplistic and strikes me as coming from people who have taken first-year Econ, if that, and literally nothing else. Does supply and demand affect housing prices? Yes, and the fact that supply has been constrained is affecting prices. Is it the only factor? Probably not. Even basic economics classes will teach that there are several ways that supply and demand breaks down. For one, if there are imbalanced implications for both the supply and demand parties. For a landlord, rent is a purely economic transaction. Not taking a tenant means losing money. For a renter, not having a place to live is far more damaging. You lose shelter, safety, social standing, etc. The article touches on leaving an apartment empty for a couple months to find a tenant that will pay what you’re asking. But would anyone really go homeless for a couple months to save on rent? Not only that, but peoples lives revolves around where they live, and it’s not easy for a lot of people just to pick up and move to a different market. Another way supply and demand might break down is if there is price collusion between parties on the supply side. This is relevant especially in this case because if there is a single party setting prices (eg the algorithm) and there is a constrained enough market, then you can in fact force people more than what typical supply and demand would imply.
- nickpp 4y ago
  Have you ever looked at how long it takes to get a building permit in one of those high-rent areas? Years, if you get it. And millions of dollars in plans, approvals and preparations. God forbid if you must involve some union people. We’ve outlawed construction. Any other factor besides this is far far behind.
  - Bukhmanizer 4y ago
    > Any other factor besides this is far far behind. Ok based on what? Like I think there are supply problems, but there are plenty of examples where the demand isn’t increasing much or is even decreasing but housing is still getting more expensive.
  - P5fRxh5kUvp2th 4y ago
    Since you obviously have, would you care to provide sources for those of us who haven't?
rdtwo 4y ago
Umm the algorithm allows you to bypass collusion laws by having everyone run the same algorithm. It’s the newest in legal innovation using algorithms to do illegal shit then blame it on the algorithm
P5fRxh5kUvp2th 4y ago
If a large % of rentals in an area are using this algorithm, then it becomes a feedback loop fully controlled by this algorithm. I get so tired of watching people declare things with an air of authority that are absolutely not true if you apply a modicum of thought to it.
ori_b 4y ago
Ah. I see How much housing should be built before you decide to go homeless instead of paying what colluding landlords decide they can extract from you? The issue here is the collusion in place of competition.
_carbyau_ 4y ago
Sure, supply and demand. I largely agree with the many angles here but I don't see it as a single "build it and they will come" issue. I don't think it is there yet but are their rules about how much of the market can be owned by a single entity? I know of a farmer who sold his farm and invested into housing. He had a big party when he got to 100. That was 20 years ago. Are there more of these "super investors" in the market? After all, money is infinite, but land in the world is limited.
type-r 4y ago
I think this is a limited view. OPEC/OPEC+ controls about half of worldwide oil production and yet we can see how big of an impact production cuts that they make have on the price of oil. What we're seeing here is the same thing -- the ability for landlords to artificially reduce supply and force prices up. Just because there's software in the middle doesn't mean it's not a cartel.
hoseja 4y ago
Why is it only developers who build...

midislack 4y ago

We could also just not live in San Francisco. That's a better option for many.

tjr225 4y ago
And yet people love it and want to call it home, and are willing to make sacrifices to do so. I know I have here in the Seattle area. Mind ya own business!
- nkrisc 4y ago
  I think what they’re really saying is that maybe not every person who wants to live in SF, for example, can. There’s some upper limit on how many people can live there and if more people want to live there than can prices will go up. So maybe not everyone who wants to live there gets to.
  - bombcar 4y ago
    In the past this would cause other places to become “more San Francisco-like” (arguably Seattle itself has changed since the 80s and perhaps in this direction). Why that doesn’t occur could be interesting for discussion.
    - nkrisc 4y ago
      I’m not very familiar with SF and the Bay Area, but from what I have read about it my impression is that real estate in communities surrounding San Francisco and the Bay Area in general have absolutely been affected by the real estate situation in SF and become more San Francisco-like in terms of housing prices. Again, not from out that familiar with the area so maybe I’m off the mark here.
      - bombcar 4y ago
        They have - what I'm referring to is the older "city migrations" where if Chicago was "too big/expensive" then Detroit would come into its own. So instead of SF continuing to expand to engulf all of California, other cities in other areas would begin to grow. Somewhat this has happened - Redmond near Seattle, etc, but we haven't really had any "ground up" new cities that I can recall, they're all offshoots/suburbs of existing ones.
- refurb 4y ago
  Then I guess they’ll pay that privilege then?
- midislack 4y ago
  Enjoy but don't pretend YOUR social problems are MINE. You chose to take them on.
  - deleted 4y ago
    [deleted]

geofft 4y ago

I very much agree with you that the lack of supply is a major problem, but the article is making a case here that what the algorithm is doing is tantamount to price-fixing / collusion. Even in markets where supply is much easier to come by than housing and does not have the entrenched political dysfunction restricting supply - such as RAM chips and canned tuna - price-fixing is a problem. There's an analogy in the article to airplane seat pricing. The solution there was to tell the airlines they couldn't collude with each other, not to say "The real problem is the lack of flight supply."

maximilianroos 4y ago
Yes, I think that's a fair point. But I don't see any actual evidence that collusion is happening. Collusion is difficult to pull off! It requires each owner to restrict their supply so that all owners benefit through higher prices. The incentive for an individual owner is to "defect" by renting out their whole supply. Collusion generally requires participants to be able to monitor and enforce each other's behavior. To the extent that owners are increasing prices slightly to benefit themselves, that's not collusion, that's just the market clearing.

shahbaby 4y ago

You say that the underlying problem is a limited supply but why stop there? Why is there a limited supply? How long will looser regulations help until we're back to the same problem? Perhaps we should dig deeper. Why have we organized our society in a way that encourages and almost enforces high population density? The fact is that our current way of living is unsustainable. The housing situation is just one symptom of that.

NegativeLatency 4y ago
Carbon emissions from a city resident are much lower than those from a suburb or rural resident. Unless your proposed plan is like living off grid or something, making it easy for people to move to cities seems logical.
- Silverback_VII 4y ago
  This is something I do not get. In my opinion renting a flat should be a more efficient form of living than owning a house and yet economically(&long-term) renting is often the worse option.
  - bombcar 4y ago
    If you fully account for everything, renting doesn’t always lose - it’s just we’ve had absurd appreciation for so long. Once you account for maintenance items owning becomes decently more expensive than a simple “mortgage + utilities + insurance + taxes” calculation shows. A $10k furnace every 25 years adds something like $40 a month and that’s only one of the many wear items there are. There are other non-tangible benefits to ownership, of course.
    - ghaff 4y ago
      There's (mostly) a distinction between single family homes and condos (though high-end condos can have significant costs even if shared as well in addition to condo fees). But, yes, something on the order of hundreds of dollars per month should probably be budgeted to keep a single family house in steady state over a significant period of time.

joshfraser 4y ago

I mostly agree, but they're actively pushing rental property owners to let units sit empty for extended periods of time while they wait for higher prices. There are a shocking number of high end apartments in cities like SF and NYC that are sitting empty while everyone else is struggling to find an affordable place to live.

Spooky23 4y ago
This is where I think inflation and higher rates will be good for the US. The ridiculously low cost of holding assets are making it too cheap to hold and do nothing. Tax policy is a big part of this, but won’t change for many years.
- lupire 4y ago
  Inflation doesn't help. Higher rates lower inflation, making housing more affordable for wage earners.
  - formerkrogemp 4y ago
    Higher rates reduce affordability in the short term because housing prices aren't falling correspondingly.
bombcar 4y ago
This has been common in the commercial sector for decades - and in the commercially managed residential sector (think large apartment complexes). All this is doing is bringing it to smaller apartments and single family rentals. I still feel that if you correctly account for costs and back out appreciation, being a single family home landlord ain’t worth it.
londons_explore 4y ago
They sit empty because an empty apartment is still going up in value. If you rent it out, there will be wear and tear (ie. after 5 years it'll need a full refurb), and you run the risk of having tenants stuck in your property if laws change and suddenly you aren't allowed to evict them. Often the capital appreciation is so much greater in value than the rental income (after management, maintenance, etc) that it isn't worth risking the capital income for a tiny bit of rental income.

PragmaticPulp 4y ago

> But the underlying problem here is the supply & demand! This is the answer to most pop-Econ articles. It’s amazing how hard people want to believe that something else is to blame or that traditional economics doesn’t apply for some reason. Algorithms are a popular outrage-bait right now, so I’m not too surprised to see “the algorithm” blamed for high rents now, too.

BlargMcLarg 4y ago
Because supply and demand itself is ridiculously broad. I don't even see people claim it isn't S&D given so many say anything from "build more housing" to "slackers go earn more money / save more", but saying supply & demand is the underlying problem is about as useful as saying the needle is in the haystack.
klyrs 4y ago
The problem isn't "the algorithm," the article is exceedingly clear that the problem is "the company" and "the captured market" but mostly collusion by proxy. But in this case, it's also the algorithm -- the article has multiple quotes where "empathy" is seen as a problem and that getting humans out of the loop is a boon to profit. The algorithm itself isn't the problem, it's the bloody-minded profit-seeking where capitalists leverage trust in the algorithm to extract maximum rents by leaving properties vacant in the midst of a housing crunch.
- ajhurliman 4y ago
  Leaving properties vacant is an absolute killer to revenue. I’m reading a lot of people in this discussion cite that property managers are comfortable with vacant units because of all the extra money they’re making off of raising the rents, but you’d need to raise them an incredible amount to justify even a single month of vacancy. Normally 5% is reasonable, but if that number slides it really kills profits. I guess what I’m saying is that the incentives are aligned here: property managers want to see units occupied, and so does everyone else. Will they lower prices until 100% occupancy? No, there needs to be some unoccupied units or there would be no liquidity in the market (if there are no houses to rent and you want to move to a city, how could you move?).

Silverback_VII 4y ago

>given the supply & demand Not if the company keeps apartments empty as mentioned in the article. With such an arrangement between landlords you can increase rent not matter the supply&demand.

jpollock 4y ago
There are high costs to an empty apartment. The bank doesn't stop demanding payment if the apartment is empty. Same with property taxes, heating, insurance, groundskeeping, etc. You can even find that the maintenance costs increase as problems that would have been seen and fixed (particularly leaks) are missed.
- halfjoking 4y ago
  I don’t think that’s incentive enough. There could be an Elysium scenario where the super-rich will pay anything to live in a high-demand area, so the prices go so high almost all properties end up empty. That doesn’t seem beneficial to society, the environment or anyone. If there were strong vacancy taxes the situation would change. Vancouver has a 3% empty homes tax. Let’s keep raising a tax like that until managing empty properties becomes untenable. If we want people to have more affordable homes to buy we should incentivize people living in them over managing them for optimal profit.

mleonhard 4y ago

2011-2015 SF jobs increased 23% and housing increased 3% [0]. During this time, my own rent increased about 10% per year. California legislature is passing some housing good laws, but the state's attorney is not enforcing them. The non-profit CaRLA is doing the enforcement and having success [1]. Their wins in court have set precedent and unblocked a lot of building permits. [0] https://news.ycombinator.com/item?id=19679440 https://news.ycombinator.com/item?id=19679440 [1] https://carlaef.org https://carlaef.org

threatofrain 4y ago

I believe SF would need way more central planning and not less if we want more housing supply. The transportation issue in SF is crazy at the moment and parking is expensive in both time and money. A city needs to upgrade multiple infrastructural elements simultaneously if it wants to make a successful leap into higher densities. In a democratic culture this means getting enough parties on board to accept a big jump in taxes for huge civic works projects like subways. To make all of this coherent this will take a massive and sustained political momentum which can exercise eminent domain in a very big way.

AlchemistCamp 4y ago
SF tax revenues increased greatly (double, IIRC) over the past decade. How much more revenue do you believe the city needs?
opportune 4y ago
We don’t need more parking. It’s a waste of space and very expensive compared to more public transportation. By all means allow people to build parking if they want to, but there’s no need for parking minimums. I don’t see how more central planning could help. Our central planners love to block housing unless it meets 100 different conflicting requirements they make up on the spot. Just let people build!
- rdtwo 4y ago
  We can’t have public transit because we gave up on public safety during covid. Lots of public transit is now unsafe or much less safe than before

r12343a_19 4y ago

YellowZeeZee 4y ago

The supply&demand issue does not turn what this company is doing into a "distraction", quite the opposite. Their "algorithm" has an outsize influence on the prices precisely because of the underlying housing crisis. I put algorithm in quotes, because it's clearly just a facade in front of good ol' fashioned price collusion. As the example in the article points out, replace the word "algorithm" with "a guy named Bob" and suddenly it doesn't sound so innocent to say: The companies controlling 90% of apartments in a neighborhood give all their data to Bob, and then Bob tells each one what to price their apartments. It's price collusion by proxy, pure and simple. We shouldn't just ignore it because it's not the biggest cause of the price increases. Yes, we absolutely need to tackle the housing supply problem, but at the same time we need to stop companies like this from exploiting the crisis and driving prices up even further.

lupire 4y ago
Ending the crisis by creating housing supply is the way to stop exploiting the crisis. If you stop "this one company" you'll just have someone else making profits and still have people homeless.
- noasaservice 4y ago
  Not if the RICO act was used against them, and all rental properties are transferred to the renter in payment for fraud, conspiracy, interstate fraud, etc Do you honestly think any other property owner would touch companies like this if this one popped like that?
  - Vvector 4y ago
    I understand your frustrations. But nothing here is anywhere close to a RICO violation. https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corrupt_Organizations_Act https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corru...
    - unyttigfjelltol 4y ago

Bukhmanizer 4y ago

The “it’s all just supply and demand” argument is overly simplistic and strikes me as coming from people who have taken first-year Econ, if that, and literally nothing else. Does supply and demand affect housing prices? Yes, and the fact that supply has been constrained is affecting prices. Is it the only factor? Probably not. Even basic economics classes will teach that there are several ways that supply and demand breaks down. For one, if there are imbalanced implications for both the supply and demand parties. For a landlord, rent is a purely economic transaction. Not taking a tenant means losing money. For a renter, not having a place to live is far more damaging. You lose shelter, safety, social standing, etc. The article touches on leaving an apartment empty for a couple months to find a tenant that will pay what you’re asking. But would anyone really go homeless for a couple months to save on rent? Not only that, but peoples lives revolves around where they live, and it’s not easy for a lot of people just to pick up and move to a different market. Another way supply and demand might break down is if there is price collusion between parties on the supply side. This is relevant especially in this case because if there is a single party setting prices (eg the algorithm) and there is a constrained enough market, then you can in fact force people more than what typical supply and demand would imply.

nickpp 4y ago
Have you ever looked at how long it takes to get a building permit in one of those high-rent areas? Years, if you get it. And millions of dollars in plans, approvals and preparations. God forbid if you must involve some union people. We’ve outlawed construction. Any other factor besides this is far far behind.
- Bukhmanizer 4y ago
  > Any other factor besides this is far far behind. Ok based on what? Like I think there are supply problems, but there are plenty of examples where the demand isn’t increasing much or is even decreasing but housing is still getting more expensive.
- P5fRxh5kUvp2th 4y ago
  Since you obviously have, would you care to provide sources for those of us who haven't?

rdtwo 4y ago

Umm the algorithm allows you to bypass collusion laws by having everyone run the same algorithm. It’s the newest in legal innovation using algorithms to do illegal shit then blame it on the algorithm

P5fRxh5kUvp2th 4y ago

If a large % of rentals in an area are using this algorithm, then it becomes a feedback loop fully controlled by this algorithm. I get so tired of watching people declare things with an air of authority that are absolutely not true if you apply a modicum of thought to it.

ori_b 4y ago

Ah. I see How much housing should be built before you decide to go homeless instead of paying what colluding landlords decide they can extract from you? The issue here is the collusion in place of competition.

_carbyau_ 4y ago

Sure, supply and demand. I largely agree with the many angles here but I don't see it as a single "build it and they will come" issue. I don't think it is there yet but are their rules about how much of the market can be owned by a single entity? I know of a farmer who sold his farm and invested into housing. He had a big party when he got to 100. That was 20 years ago. Are there more of these "super investors" in the market? After all, money is infinite, but land in the world is limited.

type-r 4y ago

I think this is a limited view. OPEC/OPEC+ controls about half of worldwide oil production and yet we can see how big of an impact production cuts that they make have on the price of oil. What we're seeing here is the same thing -- the ability for landlords to artificially reduce supply and force prices up. Just because there's software in the middle doesn't mean it's not a cartel.

hoseja 4y ago

Why is it only developers who build...