4 ms·

A place to live is a market based thing. There's no real difference between what RealPage is doing with housing, and what the CME Group is doing with crops. The

by Aunche 4y ago

A place to live is a market based thing. There's no real difference between what RealPage is doing with housing, and what the CME Group is doing with crops. They both facilitate price discovery. The CME also is helping farmers maximize their profits. The difference is that farmers are allowed to grow as much crops as they want (perhaps a little too much in drought-prone areas), so food prices grow much more reasonably than rents. Meanwhile, developers aren't allowed to build enough housing to meet demand, so of course rents and home prices will skyrocket.

notch656a 4y ago
If you spend some time in South America you quickly find that most everyone can afford some type of housing, it's just a matter of how shitty it is going to end up. The vast majority of the US has set some building codes that basically say "be rich enough to build to this code or be homeless." One can debate the merits of whether the streets are safer than a sub-code house. If you go somewhere like Asuncion, Paraguay you'll find people living in a shack who would end up homeless in the US. IMO notably missing in zoning and building codes is they tend to consider the harmful effects of substandard zoning / code. But they seldom consider the harmful effects of the tradeoffs made to get it up to code/zone, including less money for healthcare, education, healthy foods, investing in your children, etc. Often it boils down to "fuck you, got mine, I won't risk some elevated risk of spread of fire to help keep you from freezing to death."
- deleted 4y ago
  [deleted]
landemva 4y ago
CME provides a place to trade futures products, which producers use to hedge risk. That is not like the apartment rent collusion.
- Aunche 4y ago
  The CME facilitates price discovery with derivatives. RealPage facilitates price discovery with data science. 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.
  - landemva 4y ago
    Futures products allow producers to offload some of their risk. CME provides a regulated transparent place to trade those products. While I was a small-time landlord in the past, I am not now. It is difficult (financing, zoning, permits) to put up a new apartment building, so there is no extra $8100 for me. If landlords meet weekly at the diner to set unit pricing it would be anti-trust collusion. The landlords paying uncle Bob to do the same thing is an extra step and it is still collusion.
    - Aunche 4y ago
      >The landlords paying uncle Bob to do the same thing is an extra step and it is still collusion. Did you read my example? My point is that this not what they're doing. You pay Realpage a fee based on the total square footage of units you want to be priced. In exchange, they estimate the market rent of your apartment to the best of their ability. They have no incentive to do otherwise.

by Aunche 4y ago

notch656a 4y ago

If you spend some time in South America you quickly find that most everyone can afford some type of housing, it's just a matter of how shitty it is going to end up. The vast majority of the US has set some building codes that basically say "be rich enough to build to this code or be homeless." One can debate the merits of whether the streets are safer than a sub-code house. If you go somewhere like Asuncion, Paraguay you'll find people living in a shack who would end up homeless in the US. IMO notably missing in zoning and building codes is they tend to consider the harmful effects of substandard zoning / code. But they seldom consider the harmful effects of the tradeoffs made to get it up to code/zone, including less money for healthcare, education, healthy foods, investing in your children, etc. Often it boils down to "fuck you, got mine, I won't risk some elevated risk of spread of fire to help keep you from freezing to death."

deleted 4y ago
[deleted]

landemva 4y ago

CME provides a place to trade futures products, which producers use to hedge risk. That is not like the apartment rent collusion.

Aunche 4y ago
The CME facilitates price discovery with derivatives. RealPage facilitates price discovery with data science. 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.
- landemva 4y ago
  Futures products allow producers to offload some of their risk. CME provides a regulated transparent place to trade those products. While I was a small-time landlord in the past, I am not now. It is difficult (financing, zoning, permits) to put up a new apartment building, so there is no extra $8100 for me. If landlords meet weekly at the diner to set unit pricing it would be anti-trust collusion. The landlords paying uncle Bob to do the same thing is an extra step and it is still collusion.
  - Aunche 4y ago
    >The landlords paying uncle Bob to do the same thing is an extra step and it is still collusion. Did you read my example? My point is that this not what they're doing. You pay Realpage a fee based on the total square footage of units you want to be priced. In exchange, they estimate the market rent of your apartment to the best of their ability. They have no incentive to do otherwise.