5 ms·

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 suppl

by 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.
  - ceejayoz 4y ago
    > How is it different from just eyeballing market price from looking at similar units, and renting yours out for +10-15% more? OPEC works because they all move together. One of them raising or lowering production alone doesn't do much; all of them doing it at similar times does. Same with RealPage. By having nearly everyone use it, nearly everyone's pricing moves in a coordinated fashion, and they collectively reduce the chances of downward price pressure.
  - ryan_lane 4y ago
    > How is it different from just eyeballing market price from looking at similar units, and renting yours out for +10-15% more? Landlords don't always advertise, and they also negotiate rents. Knowing the actual market price isn't easy (and sometimes not possible), because that information isn't publicly available and certainly isn't real-time. RealPage is getting private market information from landlords, and using it to coordinate rent prices, including coordinating actions to remove supply from the market to artificially increase prices. This removes competition from an otherwise competitive market. This is collusion via a middleman.
ceejayoz 4y ago
Landlords banding together to use one tool to set all the prices sure sounds like a cartel.
- vkou 4y ago
  Does this cartel punish defectors? How can it prevent people who don't want to participate from undercutting it? It doesn't, and it can't. That's what makes it not a cartel. The problem is not collusion, the problem is supply shortage. All the sellers raising prices isn't illegal, or cartel-like. All the sellers punishing a seller that lowers prices would be - but it doesn't happen. Not with landlords, at least. I think our current land policy is pants-on-head stupid, but this isn't the problem with it.
  - ceejayoz 4y ago
    > Does this cartel punish defectors? How can it prevent people who don't want to participate from undercutting it? It doesn't, and it can't. That's what makes it not a cartel. Your definition means OPEC isn't a cartel. (That is... incorrect.)
- missedthecue 4y ago
  But they aren't banding together. That's like saying devs are banding together to publish apps on the Apple App Store. There is no mechanism for keeping other landlords from leaving the software, and there are multiple competing alternatives.
  - techsupporter 4y ago
    > there are multiple competing alternatives For landlords, yes. Not for tenants. That's the crux of the issue here. Tenants have no way of knowing what is happening or why and so the market becomes an anti-competitive cartel. This is doubly so in markets like Seattle, where a single-digit number of management companies cover large swathes of the market. It's akin to people defending binding arbitration clauses by saying "just choose another competitor." When all of the competitors in the market, especially in a must-have-it-or-else market like housing, are doing the same thing in the same way, there's no choice and no competition.
RRWagner 4y ago
>> growth in wages for the upper 30% of society... Which just means that the 1% can then extract as much of that 30% as possible returning the 29% right back tonwhere they effectively were before the growth (not to mention anyone that got a minimum wage increase)
gonzo41 4y ago
This is not true. I encourage you to listen to this two part pod cast about this issue. Robert Evans goes into depth about this. Part one https://www.iheart.com/podcast/105-behind-the-bastards-29236323/episode/part-one-why-is-the-rent-104321463/ https://www.iheart.com/podcast/105-behind-the-bastards-29236... Part Two https://www.iheart.com/podcast/105-behind-the-bastards-29236323/episode/part-two-sam-zell-the-elon-104424976/ https://www.iheart.com/podcast/105-behind-the-bastards-29236...
- psychlops 4y ago
  I literally couldn't make it through the noise to find signal. Is there a specific slot of time to start?
  - johncessna 4y ago
    It's pretty rough. At the 4-5 minute mark the schtick stops.
prpl 4y ago
Either way it's price coordination, which is illegal.
yieldcrv 4y ago
basically, having uniform rental and vacancy data is one thing, that's nice and new. having uniform rental data to make dynamic pricing based on supply and demand would be great! that's not what's happening here. the uniform data is being used to more opaquely bolster the price of the available units, and that's not good. its anti-competitive at it isn't supporting price discovery, even though it has the capability to do the opposite.
naijaboiler 4y ago
It is effectively a cartel

by vkou 4y ago

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.
- ceejayoz 4y ago
  > How is it different from just eyeballing market price from looking at similar units, and renting yours out for +10-15% more? OPEC works because they all move together. One of them raising or lowering production alone doesn't do much; all of them doing it at similar times does. Same with RealPage. By having nearly everyone use it, nearly everyone's pricing moves in a coordinated fashion, and they collectively reduce the chances of downward price pressure.
- ryan_lane 4y ago
  > How is it different from just eyeballing market price from looking at similar units, and renting yours out for +10-15% more? Landlords don't always advertise, and they also negotiate rents. Knowing the actual market price isn't easy (and sometimes not possible), because that information isn't publicly available and certainly isn't real-time. RealPage is getting private market information from landlords, and using it to coordinate rent prices, including coordinating actions to remove supply from the market to artificially increase prices. This removes competition from an otherwise competitive market. This is collusion via a middleman.

ceejayoz 4y ago

Landlords banding together to use one tool to set all the prices sure sounds like a cartel.

vkou 4y ago
Does this cartel punish defectors? How can it prevent people who don't want to participate from undercutting it? It doesn't, and it can't. That's what makes it not a cartel. The problem is not collusion, the problem is supply shortage. All the sellers raising prices isn't illegal, or cartel-like. All the sellers punishing a seller that lowers prices would be - but it doesn't happen. Not with landlords, at least. I think our current land policy is pants-on-head stupid, but this isn't the problem with it.
- ceejayoz 4y ago
  > Does this cartel punish defectors? How can it prevent people who don't want to participate from undercutting it? It doesn't, and it can't. That's what makes it not a cartel. Your definition means OPEC isn't a cartel. (That is... incorrect.)
missedthecue 4y ago
But they aren't banding together. That's like saying devs are banding together to publish apps on the Apple App Store. There is no mechanism for keeping other landlords from leaving the software, and there are multiple competing alternatives.
- techsupporter 4y ago
  > there are multiple competing alternatives For landlords, yes. Not for tenants. That's the crux of the issue here. Tenants have no way of knowing what is happening or why and so the market becomes an anti-competitive cartel. This is doubly so in markets like Seattle, where a single-digit number of management companies cover large swathes of the market. It's akin to people defending binding arbitration clauses by saying "just choose another competitor." When all of the competitors in the market, especially in a must-have-it-or-else market like housing, are doing the same thing in the same way, there's no choice and no competition.

RRWagner 4y ago

>> growth in wages for the upper 30% of society... Which just means that the 1% can then extract as much of that 30% as possible returning the 29% right back tonwhere they effectively were before the growth (not to mention anyone that got a minimum wage increase)

gonzo41 4y ago

This is not true. I encourage you to listen to this two part pod cast about this issue. Robert Evans goes into depth about this. Part one https://www.iheart.com/podcast/105-behind-the-bastards-29236323/episode/part-one-why-is-the-rent-104321463/ https://www.iheart.com/podcast/105-behind-the-bastards-29236... Part Two https://www.iheart.com/podcast/105-behind-the-bastards-29236323/episode/part-two-sam-zell-the-elon-104424976/ https://www.iheart.com/podcast/105-behind-the-bastards-29236...

psychlops 4y ago
I literally couldn't make it through the noise to find signal. Is there a specific slot of time to start?
- johncessna 4y ago
  It's pretty rough. At the 4-5 minute mark the schtick stops.

prpl 4y ago

Either way it's price coordination, which is illegal.

yieldcrv 4y ago

basically, having uniform rental and vacancy data is one thing, that's nice and new. having uniform rental data to make dynamic pricing based on supply and demand would be great! that's not what's happening here. the uniform data is being used to more opaquely bolster the price of the available units, and that's not good. its anti-competitive at it isn't supporting price discovery, even though it has the capability to do the opposite.

naijaboiler 4y ago

It is effectively a cartel