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DOJ will examine whether RealPage helped landlords coordinate rent increases
- anonym29 4y agoHmmmm... I wonder whether they will find any conclusive evidence that the platform which promises to help landlords extract every penny possible from their properties, using data from surrounding properties, that was being used by practically every major apartment complex, was possibly being used to raise rents... and whether this highly complex product with their proprietary algorithm could've had a feedback loop on it's own raised prices. Such a difficult case to figure out... /s
- SSchick 4y agoCollusion / price fixing as a service. I'm sure a decent chunk of HN's population has lived or lives in properties that are or were using RealPage. Rant/Anecdote ahead: We have recently decided to rent from a house from a private landlord after equity (a RealPage customer), "offered" us a 15% rent hike which they considered "reasonable" after massively cutting staff, service, security & amenities during covid. Practically every other building in the area (downtown Redmond, WA) has increased prices in unison so there is basically 0 competition. These companies have turned areas they operate into upscale meat grinders that lure you with a "welcome" price only to systematically hike up your rent way beyond inflation. To slowly push you out if your salary doesn't grow faster to equal to their hikes. Many of our friends have similar experiences. Imo corporate landlords need to be heavily regulated and need to be broken up.
- bombcar 4y agoCorporate landlords math out things and only do it as long as it’s profitable. Private single-family landlords are often content renting as long as they get more than the mortgage. And if you’re a good tenant they often don’t bother checking comps at all until they have to rent it again.
- dnissley 4y agoI've found they're also far more likely to be absentee, and far more likely to discriminate on the basis of whoever happened to burn them in the past. They're also more volatile -- many are new to landlording and if it's not working out and they get a good offer they'll just sell meaning you've got to move.
- bombcar 4y agoYeah, there are definite downsides. Most small landlords make less than appreciation when it’s all said and done - and if appreciation dries up many will sell out.
- blululu 4y agoFor a large operation it is complicated. The profit maximizing strategy starts to become more entwined with interest rates and taking out loans with properties as collateral. The price of your rent can be higher than the market rates on housing because housing is more or less a byproduct of a financial services scheme.
- nradov 4y agoHuh? Large landlords are unable to raise rents significantly above the local market rate, unless they have an effective local monopoly or collude with other landlords. Rent prices are not byproducts of a financial services scheme. When landlords ask for rent much higher than the market rate, tenants eventually just move out.
- lotsofpulp 4y agoUnless all rent prices are made public in real time, buyers (and small sellers) do not have sufficient information to determine what market price is.
- nradov 4y agoHuh? Buyers (renters) have real-time information on asking rents through sites like Craigslist and Apartments.com. Have you not seen those sites?
- HDThoreaun 4y agoIt’s really just supply and demand. There aren’t enough homes and landlords know it. If there are 2 families for every home you’re gonna have a bad time, no way around it. Only solution is building more.
- lotsofpulp 4y agoIn the case of housing, the tight timeframes for buyers and the low opportunity costs for sellers do not allow for a “fair” playing field. If sellers collude, they can hold out for a few months or even a year without a problem. But buyers are rarely in that position. Technically, it is a supply and demand issue, but the feedback loop takes so long that it needs some other force to keep it humming long term without sellers pushing society to the brink of disaster.
- SSchick 4y agoThe building we moved out of started doing referrals again, about 15% (according to a person I talked to at the leasing office) of their apartments are currently empty and they are still hiking prices, this isn't supply & demand, this is price systematic price gauging.
- HDThoreaun 4y agoAnecdotes are fun, and I’m sure many landlords are doing this, but the data does not generally show it. Nyc is sitting at 4% vacancy, only 1% above all time lows.
- yterdy 4y agoThat's an anecdote (regarding a single market that's known to be an outlier). Meanwhile, my experience squares with GP's. Rents don't have to follow S+D because downturn concessions can be covered by "specials" that effectively lower out-of-pocket costs for renters temporarily while keeping the market rate the same. Essentially, all discounts that would have been reflected in a lower market rate in the past are now internalized on a property manager's balance sheet.
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- sethd 4y ago> I'm sure a decent chunk of NH's population has lived or lives in properties that are or were using RealPage. It took me a sec to realize you were referring to Hacker News and not New Hampshire. :)
- loeg 4y ago> These companies have turned areas they operate into upscale meat grinders that lure you with a "welcome" price only to systematically hike up your rent way beyond inflation. This was the operating model of large landlords before RealPage, too. I happen to believe RealPage likely facilitates illegal collusion, but it's not like large commercial landlords were saints before.
- ilyt 4y agoRight, but you got fucked over by private landlord, that just happened to use some service to coordinate it The service might be the tool used to perpetrate the problem but regulating corporations won't help much here, if they are gone landlords will find a different way to coordinate
- aaomidi 4y agoYou’re not wrong. We should get rid of landlords and replace them with housing cooperatives.
- cscurmudgeon 4y ago> We should get rid of landlords How? Please elaborate. In places that did this, usually a new set of more evil landlords took over after mass killing: https://en.wikipedia.org/wiki/Land_Reform_Movement_(China) https://en.wikipedia.org/wiki/Land_Reform_Movement_(China) "Landlords had their land confiscated and they were subjected mass killing by the CCP and former tenants,[2][3] with the estimated death toll ranging from hundreds of thousands to millions.[4][5][6]" This should probably be required reading for everyone before they comment on housing: "Housing Breaks People’s Brains" https://www.theatlantic.com/ideas/archive/2022/11/us-housing-supply-shortage-crisis-2022/672240/ https://www.theatlantic.com/ideas/archive/2022/11/us-housing... The problem is a simple lack of supply not evil landlords. Not convinced? https://www.pewresearch.org/fact-tank/2021/08/02/as-national-eviction-ban-expires-a-look-at-who-rents-and-who-owns-in-the-u-s/ https://www.pewresearch.org/fact-tank/2021/08/02/as-national... > In fact, fewer than one-fifth of rental properties are owned by for-profit businesses of any kind. Most rental properties – about seven-in-ten – are owned by individuals, who typically own just one or two properties, according to 2018 census data. And landlords have complained about being unable to meet their obligations, such as mortgage payments, property taxes and repair bills, because of a falloff in rent payments. Edit: And of course, a comment with references is riddled with downvotes with no responses :), so predictable , while the original with an emotional "get rid of a class of people" stays positive.
- andrepd 4y ago
- jeffbee 4y agoRegulation might work but it’s complicated and expensive. The best thing you can do against landlords is abundant housing supply. Collusion isn’t going to work in practice in the face of 20% local vacancy rates.
- Brystephor 4y ago> These companies have turned areas they operate into upscale meat grinders that lure you with a "welcome" price only to systematically hike up your rent way beyond inflation. In my experience with downtown Seattle, the high end luxury apartments this rings true. I had an apartment that I was renting for ~$4k a month and gave me like 1 month free. The building then decided when it was time to renew our lease, I should pay an additional $400 a month. I moved out of that apartment and then they relisted that apartment for $3700/month with a 1 month free offer. My next apartment was $2300/month. Same thing, 1 month free. Come lease renewal time (1 year later), they said the new rent would be $400 or $500 higher (a 17% or 21% increase). Recently they've decided to give an "exploding offer" where the new rent would only be $2500/month with 8 weeks free if signed by X date. TLDR: 10%+ rent increases are the norm for my building. I've never actually paid the full listed amount for rent though when you take the concession into consideration.
- jseliger 4y agoWe should deregulate the housing-construction market to increase competition and decrease prices: https://www.aeaweb.org/articles?id=10.1257/mac.20170388 https://www.aeaweb.org/articles?id=10.1257/mac.20170388 This is fundamentally a problem with housing restrictions.
- fallingknife 4y agoUnfortunately, the government knows they don't have to do this because the public is dumb enough just to blame the landlords, because that's who their checks go to.
- loeg 4y agoWe can do both!
- switch007 4y ago> Imo corporate landlords need to be heavily regulated and need to be broken up. A big issue at least here in the UK and Ireland is that many politicians are landlords. How do we fix that…
- ensignavenger 4y agoSo your landlord priced the unit too high, you are moving to a competitor... sounds like the market working as expected to me?
- SirSavary 4y agoNo where in the comment did OP say they were moving. They also stated explicitly that competitors were virtually non-existent: > Practically every other building in the area (downtown Redmond, WA) has increased prices in unison so there is basically 0 competition.
- conductr 4y agoCorporate landlords have large portfolios and more likely experienced the new “risk” that the government allowed people to not pay rent for almost 2 years IIRC. It’s hard to objectively try to analyze the situation and ignore that whole snafu.
- spfzero 4y agoOr, people need to calibrate their desires for housing to their ability to pay for it. When landlords have bought property that becomes more valuable, they made an investment that paid off. This is what happens everywhere all the time. People speculate, some win, some lose. You've probably done it yourself, maybe by speculating on where to apply for employment. It's hard to win that way since millions of people can copy that thesis. There is only so much real estate however. At each rent increase, you could re-evaluate whether the investment is working out for you and adjust accordingly. You could also lobby your employer to move somewhere more affordable. I understand that is not a simple or easy thing to do, and you have my empathy. I just want to give you some insight a bit above "yeah, fuck those guys, you got screwed" which is not all that helpful to you.
- brookst 4y agoI mean the whole RealPage pitch to landlords is that it will help you extract more rent by raising prices to keep up with everyone else who’s using RealPage.
- puffoflogic 4y agoThis is a literal conspiracy theory, but since it plays to the right set of biases I guess it's cool on HN.
- Step888 4y agohttps://www.realpage.com/lp/harness-data-to-drive-results/ https://www.realpage.com/lp/harness-data-to-drive-results/
- johnhenry 4y agoThis fits the strict definition of "conspiracy theory" -- a theory that a group of people are working together in secret (or "conspiring") to achieve a specific goal. You're attempting to apply a connotation -- that the theory is unfounded -- that is usually associated with the term, but not definitive. This is particularly troubling in the face of the evidence presented.
- voidwtf 4y agoI believe that, in modern English parlance, the idea that the theory is unfounded is the primary meaning. I doubt the strict definition was ever considered here.
- voidwtf 4y agoAny further explanation how it’s conspiracy theory? Those of us that rent, or have rented, have direct experience with rent hikes far exceeding cost-of-living increases and/or inflation. I am in a much better situation now, but previously rented a location that went from 740/mo to 1100/mo over the course of two years. This was pre-pandemic in 2012 - 2014 and coincided with similar rent increases across the city.
- puffoflogic 4y agoIt is a theory alleging a conspiracy. What part of that needs further explanation?
- ecommerceguy 4y agoAnd yet crickets out of anyone from the DOJ regarding the massive fraud that is happening everyday in crypto. I have no faith whatsoever in law enforcement anymore. Its all politics and thumbs on scales.
- farseer 4y agoRent is unavoidable and essential to a dignified life. Crypto is for people with some spare cash who want to buy a thousand lottery tickets. The priorities of DOJ are correct. They are there to save you from the greed of others, not from your own.
- mjburgess 4y agoPart of the problem with crypto is "elite capture", ie., the political class seem to have jumped behind it as with, eg., AI, quantum computing, self-driving cars etc. --- without realising that it's a pyramid-style hype phenomenon rather than a "innovation-style" one. To defend them, it's really really hard to tell -- many technical people are economically incompetent and have been "captured"; and political people are far from either economically or technically competent. However, of course, there's also a significant amount of money funnelled from this scam into political pockets. I'd say it's 80% the former, 20% the latter. In any case, if the gov were to come down against crypto, they'd wipe the entire industry out. That would be a high-risk move from the political elite class on any ordinary technology, let alone one they've been captured to support.
- est31 4y agoSBF was the second biggest individual donor to Biden's election campaign, and he donated 8 times as much in the 2022 midterms to democrats. Newspapers close to democrats have made very positive pieces about him and his scam. Now after the collapse, the government is still after him. He will probably meet the fate of most upper class blue collar criminals, with low security prison for a low single digit number of years. The political class protects you if you bribe them, and you can get really rich thanks to such cooperations. They will defend your shady real estate deal, your NIMBY-ism, your neo feudal constitutional amendments from 1978, or pro-corporate legislation. But this has limits, e.g. when you appear in newspapers as someone who has scammed tens of thousands. I do think however that a thing such as "good" (in the sense of quality, not in the sense of impact on the world) elite capture exists, even for crypto currencies. Ultimately we might end up with one or two private crypto currencies that have managed to bribe the elites of the gun owning apparatus well, and then that apparatus will use the guns to eliminate the crypto currencies that didn't manage to do such elite capture. We might end up with privatized, state sanctioned currencies, just as large parts of the banking system are private, or how certain parts of the elite got first row access to massive Fed loans while the masses had nothing. In the end, elite captured crypto currencies will just be the people with guns deciding to use a different mechanism to distribute the goods the guns are protecting, instead of being the innovation the pro-crypto people have been dreaming about that deprecates the need for people with guns.
- d23 4y agoIs it just me or are there a lot more stories about the DOJ and FTC cracking down on abuse by actual big players lately?
- tiahura 4y agoJust you. The stories, like this one, are about the the DOJ launching an investigation. Wake me when they win the trial and survive appeal, or even get meaningful concessions in a consent decree.
- dang 4y agoRecent and related: Lawsuit filed against rent-setting software RealPage - https://news.ycombinator.com/item?id=33317414 https://news.ycombinator.com/item?id=33317414 - Oct 2022 (50 comments) Rent going up? One company’s algorithm could be why - https://news.ycombinator.com/item?id=33224502 https://news.ycombinator.com/item?id=33224502 - Oct 2022 (279 comments)
- davidw 4y agoI don't believe that company is a 'force for good', but I don't think they would be able to corner the market in the face of actually abundant housing, either. It's like we keep looking for the bogeyman that's driving up prices so we don't have to face up to the real problem: our cities' policies that prevent homes from being built, and our neighbors who support them. If you'd like to join an organized effort to fight for housing, these are good groups: * https://yimbyaction.org/2021/ https://yimbyaction.org/2021/ * https://welcomingneighbors.us/ https://welcomingneighbors.us/
- andrepd 4y agoThere are housing price crises literally all over the world, even in places where restrictive city policies are not an issue. I'm sure supply constraints make it worse, but the underlying problem is financial in nature: because of making housing a financial asset.
- davidw 4y agoThe housing crisis is far worse in places where artificial constraints make it so. In general, the financial side of things drives the constraints, rather than the other way around. If I view my house as an investment, it's in my interest to see a constrained supply so that the value of my house goes up, up, up.
- erik_seaberg 4y agoWhere is there a housing crisis with no restrictions on construction, and how much construction has been happening there relative to population growth? Compared to the Bay Area, there are many, many places with vacancies at 80% (Weed, CA) to 99% (Detroit) lower prices. The problem is that everyone wants to live in a few good employment markets with local housing shortages imposed by zoning.
- Spivak 4y agoPeople want to live where industry is? Woah there. If you call that a problem then there will never be a solution for the rest of forever. Any sane housing policy has to take this into account not pretend it’s the laborer’s fault. If you want people to move to different places then you have to get some businesses to start or move there until you get natural momentum.
- kactus 4y agoI used to use RealPage OneSite when I worked in facility maintenance. As recently as 2018, it was an old clunky webapp that only worked in Internet Explorer. At the time, I was like, why has no one disrupted them yet? but I later realized building boring, complex software like this is hard, and convincing an org with hundreds of satellite offices to switch is even harder.
- InFlightThrow 4y agoIsn't this exactly how wages are set in tech? Google, Amazon, Meta, etc. all report their payroll data to a centralized third party who then reports back to them what they should be paying their employees. Sure, companies can choose to nudge those numbers up or down, but it's exactly the same thing landlords are doing here. We need to make colluding to keep rent high and wages low illegal.
- luckylion 4y agoWages in IT are high for the same reason that rents in these neighborhoods are high: demand is far greater than supply. It feels great being on the supply-side and getting crazy money, but it feels bad to be on the demand-side and having to pay crazy money. And everyone will say that one of these is perfectly fine and the other is outrageous.
- socialismisok 4y agoNo, I think the point being made is that it's bad to set wages this way. If every company is colluding, then wages are being kept artificially low. (Even in tech, where engineers are in demand.) Neither of these is fine.
- luckylion 4y agoThe salaries are high because of supply and demand. Big tech companies collude to "keep them low" because they are high. Nobody here has a problem with their salary being high, they feel it's totally fine because it benefits them. It's only when they experience the other side that they're outraged and want regulation. Which is totally natural and fine, and I'm not saying it shouldn't be allowed or whatever. But we should still be aware that that's what it is.
- InFlightThrow 4y agoWages are lower than they should be. Wages would be higher if employers were not colluding. Collusion is hurting both high demand engineers and renters.
- michael1999 4y agoPeople of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
- segmondy 4y agoWhat if RealPage is not an American company? What will DOJ do? Tell them not to serve American customers? Tell American customers not to use it?
- roflyear 4y agoWhy is this even needed? It is easy to look at the market and also to just look at CPI numbers and boost your rent.
- refurb 4y agoI’m not sure how this is different (other than scale) of a landlord just pulling up a rental app, finding similar places as theirs and pricing similarly? I mean, it’s not like other rent rates weren’t visible to landlords before this website same along.
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