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Collusion / 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/Anecd

Collusion / 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 ago
Corporate 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 ago
  I'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 ago
    Yeah, 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 ago
  For 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 ago
    Huh? 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 ago
      Unless 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 ago
        Huh? Buyers (renters) have real-time information on asking rents through sites like Craigslist and Apartments.com. Have you not seen those sites?
        lotsofpulp 4y ago
        Asking price is not the sale price. It is apparently valuable enough for landlords to provide to RealPage, and then in return get a pricing suggestion.
        jeffbee 4y ago
        In my city we have a rent registry. Tenants have perfect market information if they want it. This does not give them pricing power. Objectively, Berkeley has one of the worst housing crises in the nation. 3Bd/1ba 1000sqft apartments are advertised at $7200/mo. Rents have quadrupled in real dollars in 25 years. This is a result of government strangling the construction market and nothing to do with collusion or hidden pricing.
HDThoreaun 4y ago
It’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 ago
  In 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 ago
  The 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 ago
    Anecdotes 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 ago
      That'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.
- 4y ago
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 ago
Right, 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 ago
  You’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 ago
Regulation 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.
- andrepd 4y ago
  Perhaps it wouldn't, given a Georgist LVT.
  - carom 4y ago
    LVT benefits landlords because they are properly utilizing their land. They are operating much closer to its potential value than single family homes.
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 ago
We 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 ago
  Unfortunately, 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 ago
  We 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 ago
So your landlord priced the unit too high, you are moving to a competitor... sounds like the market working as expected to me?
- SirSavary 4y ago
  No 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 ago
Corporate 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 ago
Or, 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.

bombcar 4y ago

Corporate 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 ago
I'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 ago
  Yeah, 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 ago
For 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 ago
  Huh? 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 ago
    Unless 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 ago
      Huh? Buyers (renters) have real-time information on asking rents through sites like Craigslist and Apartments.com. Have you not seen those sites?
      - lotsofpulp 4y ago
        Asking price is not the sale price. It is apparently valuable enough for landlords to provide to RealPage, and then in return get a pricing suggestion.
        jeffbee 4y ago
        In my city we have a rent registry. Tenants have perfect market information if they want it. This does not give them pricing power. Objectively, Berkeley has one of the worst housing crises in the nation. 3Bd/1ba 1000sqft apartments are advertised at $7200/mo. Rents have quadrupled in real dollars in 25 years. This is a result of government strangling the construction market and nothing to do with collusion or hidden pricing.

HDThoreaun 4y ago

It’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 ago
In 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 ago
The 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 ago
  Anecdotes 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 ago
    That'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.
4y ago

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 ago

Right, 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 ago
You’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 ago

Regulation 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.

andrepd 4y ago
Perhaps it wouldn't, given a Georgist LVT.
- carom 4y ago
  LVT benefits landlords because they are properly utilizing their land. They are operating much closer to its potential value than single family homes.

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 ago

We 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 ago
Unfortunately, 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 ago
We 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 ago

So your landlord priced the unit too high, you are moving to a competitor... sounds like the market working as expected to me?

SirSavary 4y ago
No 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 ago

Corporate 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 ago

Or, 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.