5 ms·

I was disappointed to see this was not about Blackrock and other private equity groups.

cyanydeez 4y ago
Buying out houses is a different issue than large scale price fixing
obnauticus 4y ago
These anti-competitive pricing models seem to be the primary motivation for a large scale landlord wanting to invest in the first place. So it sort-of is?
- epistasis 4y ago
  No, they want to invest because zoning is being used to suppress competition, not because of the software. This is openly stated in their investment prospectuses, it's not a secret.
  - dd36 4y ago
    Monopoly.
colechristensen 4y ago
I’m quite happy to see this having lived in apartments driven by automated pricing which is obviously a new kind of cartel.
- loeg 4y ago
  The innovation here isn't the automated pricing, but convincing all the landlords in an area to collude by sharing pricing and demand data with a central organizer. Humans could do the pricing and it would still be illegal collusion.
  - Aunche 4y ago
    If they are really facilitating collusion, then they would be selling a broken product. For example, for simplicity's sake, let's say that a city has a lot of landlords, but all their units are identical and they all follow the RealPage algorithm for price suggestions. Realpage suggests that they charge an exorbitant $10000 per unit, which leads to only 50% of all units being occupied, so your expected value of $5000 per unit. However, if you're a landlord, you'd be better off renting your units at $9000, leading to 90% occupancy. Your expected profit per unit is $8100, so you're actually much better off without the algorithm.
    - loeg 4y ago
      Your arbitrary figure of $9,000 -> $10,000 causing a 40% drop in occupancy is wholly invented. You could instead imagine a (still completely fictitious) figure that makes your argument look bad -- e.g., that the raise in rates causes a 0% drop in occupancy. Then the landlords/algorithm win by raising prices. One reason occupancy rates might remain relatively stable even in the face of rising prices is if consumers have relatively few better options, because e.g. all of your competitors collude to also raise their rates similarly.
      - Aunche 4y ago
        > that the raise in rates causes a 0% drop in occupancy. Housing demand isn't really that inelastic. People will move to less crowded cities if they become too expensive. Americans tend to have much more living space per capita than most of the world, so there is a lot of room to move in with roommates or family. > all of your competitors collude to also raise their rates similarly. Realpage doesn't control the prices for the majority of housing in the US, the majority of rental units in the US, or even the majority of multifamily rental units in the US. If they tried to facilitate collusion, their customers would simply lose money.
        ryan_lane 4y ago
        > People will move to less crowded cities if they become too expensive. The vast majority of people die within 10 miles of where they were born. People want to live near their families, and for the most part do not want to move to another city, and won't even if their rent is difficult to afford. > Realpage doesn't control the prices for the majority of housing in the US, the majority of rental units in the US, or even the majority of multifamily rental units in the US. They don't need to. They just need to control the prices for particular cities, because market prices are heavily tied to regions and not to the entire US. Detroit's housing market crashing didn't affect SF's rent.
- vkou 4y ago
  Is it really a cartel, or is it just landlords squeezing every penny that they can? With there being a lot of pennies to squeeze due to a double-whammy of supply shortages, and growth in wages for the upper 30% of society? If people didn't have spare money, rents wouldn't be growing (As nobody would be able to pay), and if vacancies were higher, landlords would have to accept lowball offers.
  - dools 4y ago
    Define spare money. Since housing isn’t optional, and the cost of being homeless is extremely high, people will cease practically all other consumption in order to pay rent
  - deleted 4y ago
    [deleted]
  - timy2shoes 4y ago
    RealPage is Cartel As A Servics (CAAS), by allowing landlords to collude through a 3rd party to raise rents.
    - vkou 4y ago
      How is it different from just eyeballing market price from looking at similar units, and renting yours out for +10-15% more? Is there some core part of US land policy that only works if landlords behave like low-information market participants? If these landlords were colluding with eachother to punish defectors that undercut them, that would be a cartel. If they are all reacting to a shortage by raising their prices, that just makes them... Market agents.
      - alistairSH 4y ago
        Unless I’m missing something, it isn’t any different, other than it makes the market more efficient (in that the price gets set “correctly” earlier - by the manual method, a landlord likely over-prices initially and waits for a tenant OR underprices initially and loses that income). It’s just in a broken market - there isn’t enough supply of housing, so prices are going up. And because everybody needs housing, it feels icky to many people (I’m one of them, but my solution would be relax zoning and allow more housing). Unless using this system requires participants to set a price, I’m not sure it meets the definition of price fixing. A landlord can still underprice to guarantee a tenant quickly. Or overprice in the hopes they catch a low-info, high-income tenant.
tptacek 4y ago
PE firms own only an infinitesimal fraction of all available housing.
- Forgeties79 4y ago
  You’re not wrong but it’s a little more complicated than that. https://www.marketplace.org/2022/03/02/how-private-equity-is-changing-the-rental-market/amp/ https://www.marketplace.org/2022/03/02/how-private-equity-is...
  - tptacek 4y ago
    Is it any more than just a little more complicated? None of this establishes how PE firms would gain any sort of pricing power.
treeman79 4y ago
A Black rock house company (invintation homes)lied repeatedly about weird smells in my house. whole family has permanent injuries from it.
- turtleyacht 4y ago
  Please tell us more.
  - treeman79 4y ago
    Natural gas + carbon monoxide, oddly didn’t have the rotten egg smell. When we previewed home all the windows were open. After signing paperwork we closed up windows. Hour later we noticed smell. 3 month of being told it was carpet. Floor, paint. They inspecting and saying everything is fine. Our deductive reasoning skills where nil fairly quick into this. Finally called gas company even. They started screaming for us to run From the road. Didn’t even get to the house before alarms went off. Kids went from gifted to special needs. I went from top programmer to taking hours to figure out laundry. Doctors wouldn’t say gas caused injuries. So lawyers didn’t care. About 70% Back to normal 4 years later.
    - turtleyacht 4y ago
      Thank-you. Glad to hear you got better. After reading this, a recent combo monitor helped ease my doubts.
- radicaldreamer 4y ago
  What were the smells and what are the injuries?
- bmorton 4y ago
  It's only smellz. It's ok.

Buying out houses is a different issue than large scale price fixing

These anti-competitive pricing models seem to be the primary motivation for a large scale landlord wanting to invest in the first place. So it sort-of is?

epistasis 4y ago
No, they want to invest because zoning is being used to suppress competition, not because of the software. This is openly stated in their investment prospectuses, it's not a secret.
- dd36 4y ago
  Monopoly.

colechristensen 4y ago

I’m quite happy to see this having lived in apartments driven by automated pricing which is obviously a new kind of cartel.

loeg 4y ago
The innovation here isn't the automated pricing, but convincing all the landlords in an area to collude by sharing pricing and demand data with a central organizer. Humans could do the pricing and it would still be illegal collusion.
- Aunche 4y ago
  If they are really facilitating collusion, then they would be selling a broken product. For example, for simplicity's sake, let's say that a city has a lot of landlords, but all their units are identical and they all follow the RealPage algorithm for price suggestions. Realpage suggests that they charge an exorbitant $10000 per unit, which leads to only 50% of all units being occupied, so your expected value of $5000 per unit. However, if you're a landlord, you'd be better off renting your units at $9000, leading to 90% occupancy. Your expected profit per unit is $8100, so you're actually much better off without the algorithm.
  - loeg 4y ago
    Your arbitrary figure of $9,000 -> $10,000 causing a 40% drop in occupancy is wholly invented. You could instead imagine a (still completely fictitious) figure that makes your argument look bad -- e.g., that the raise in rates causes a 0% drop in occupancy. Then the landlords/algorithm win by raising prices. One reason occupancy rates might remain relatively stable even in the face of rising prices is if consumers have relatively few better options, because e.g. all of your competitors collude to also raise their rates similarly.
    - Aunche 4y ago
      > that the raise in rates causes a 0% drop in occupancy. Housing demand isn't really that inelastic. People will move to less crowded cities if they become too expensive. Americans tend to have much more living space per capita than most of the world, so there is a lot of room to move in with roommates or family. > all of your competitors collude to also raise their rates similarly. Realpage doesn't control the prices for the majority of housing in the US, the majority of rental units in the US, or even the majority of multifamily rental units in the US. If they tried to facilitate collusion, their customers would simply lose money.
      - ryan_lane 4y ago
        > People will move to less crowded cities if they become too expensive. The vast majority of people die within 10 miles of where they were born. People want to live near their families, and for the most part do not want to move to another city, and won't even if their rent is difficult to afford. > Realpage doesn't control the prices for the majority of housing in the US, the majority of rental units in the US, or even the majority of multifamily rental units in the US. They don't need to. They just need to control the prices for particular cities, because market prices are heavily tied to regions and not to the entire US. Detroit's housing market crashing didn't affect SF's rent.
vkou 4y ago
Is it really a cartel, or is it just landlords squeezing every penny that they can? With there being a lot of pennies to squeeze due to a double-whammy of supply shortages, and growth in wages for the upper 30% of society? If people didn't have spare money, rents wouldn't be growing (As nobody would be able to pay), and if vacancies were higher, landlords would have to accept lowball offers.
- dools 4y ago
  Define spare money. Since housing isn’t optional, and the cost of being homeless is extremely high, people will cease practically all other consumption in order to pay rent
- deleted 4y ago
  [deleted]
- timy2shoes 4y ago
  RealPage is Cartel As A Servics (CAAS), by allowing landlords to collude through a 3rd party to raise rents.
  - vkou 4y ago
    How is it different from just eyeballing market price from looking at similar units, and renting yours out for +10-15% more? Is there some core part of US land policy that only works if landlords behave like low-information market participants? If these landlords were colluding with eachother to punish defectors that undercut them, that would be a cartel. If they are all reacting to a shortage by raising their prices, that just makes them... Market agents.
    - alistairSH 4y ago
      Unless I’m missing something, it isn’t any different, other than it makes the market more efficient (in that the price gets set “correctly” earlier - by the manual method, a landlord likely over-prices initially and waits for a tenant OR underprices initially and loses that income). It’s just in a broken market - there isn’t enough supply of housing, so prices are going up. And because everybody needs housing, it feels icky to many people (I’m one of them, but my solution would be relax zoning and allow more housing). Unless using this system requires participants to set a price, I’m not sure it meets the definition of price fixing. A landlord can still underprice to guarantee a tenant quickly. Or overprice in the hopes they catch a low-info, high-income tenant.

tptacek 4y ago

PE firms own only an infinitesimal fraction of all available housing.

Forgeties79 4y ago
You’re not wrong but it’s a little more complicated than that. https://www.marketplace.org/2022/03/02/how-private-equity-is-changing-the-rental-market/amp/ https://www.marketplace.org/2022/03/02/how-private-equity-is...
- tptacek 4y ago
  Is it any more than just a little more complicated? None of this establishes how PE firms would gain any sort of pricing power.

treeman79 4y ago

A Black rock house company (invintation homes)lied repeatedly about weird smells in my house. whole family has permanent injuries from it.

turtleyacht 4y ago
Please tell us more.
- treeman79 4y ago
  Natural gas + carbon monoxide, oddly didn’t have the rotten egg smell. When we previewed home all the windows were open. After signing paperwork we closed up windows. Hour later we noticed smell. 3 month of being told it was carpet. Floor, paint. They inspecting and saying everything is fine. Our deductive reasoning skills where nil fairly quick into this. Finally called gas company even. They started screaming for us to run From the road. Didn’t even get to the house before alarms went off. Kids went from gifted to special needs. I went from top programmer to taking hours to figure out laundry. Doctors wouldn’t say gas caused injuries. So lawyers didn’t care. About 70% Back to normal 4 years later.
  - turtleyacht 4y ago
    Thank-you. Glad to hear you got better. After reading this, a recent combo monitor helped ease my doubts.
radicaldreamer 4y ago
What were the smells and what are the injuries?
bmorton 4y ago
It's only smellz. It's ok.