3 ms·

I see it as a form of a stand-alone complex. There are multiple companies engaging in this behavior, independently, but resulting in what resembles a concerted

by yterdy 4y ago

I see it as a form of a stand-alone complex. There are multiple companies engaging in this behavior, independently, but resulting in what resembles a concerted effort. However, for renters (and their representatives in government), the concern isn't so much that it's an accident of spookily aligned intent/incentives as it is that 1) it's clearly pushing up rents (beyond affordability), and 2) the companies engaging in it are aware that something they are doing is helping to drive these increases.[1] I'll also note that a falling occupancy rate is not mutually exclusive with the alleged practice of property managers warehousing inventory to prop up pricing. I also wonder how much the common practice of offering "new renter specials", rather than simply lowering rents to meet demand, contributes to ever-increasing "market rates." 1:https://web.archive.org/web/20220127071929/https://www.entrata.com/docs/spec_sheets/entrataPricing.pdf https://web.archive.org/web/20220127071929/https://www.entra...

ericd 4y ago
The percentage of landlords using it is likely too small to have the ability to engage in price fixing. They drive prices up, but only because the market clearing price in a lot of cities is higher than where they're currently priced. Do you have a source for property managers warehousing housing inventory? It doesn't ring true, at all.
- yterdy 4y ago
  I did a check of my municipality. 80% of the apartment complexes in the area use 3rd-party software of the like in question for their property management. Their capture of the market is likely sufficient to drive prices, which is why at least one company (RealPage) is facing multiple lawsuits alleging price-fixing. As for warehousing, it is a known issue in NYC and likely used in other places. I wonder what your interest is in handwaving these issues which are well-known and being acted on. You seem knowledgable except where it would tend to hurt your argument that everything is as it should be. What say you on rent specials?
  - ericd 4y ago
    I don’t have any interest in it, it’s just not my understanding of the market. If I can help people avoid an inaccurate understanding of the world, I’ll try to help that, and if I’m the wrong one, then maybe I can learn and change my mind. I could certainly be wrong, it’s been a while since I worked on this stuff. When you say 80%, what are you using to find those/take that survey? I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings. This is also why you should never trust stats sourced from those sites, they don’t have a representative view of the market (a lot of news stories cite them uncritically when talking about rent trends). Warehousing, care to cite something so I can read about it? Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount. What are you wondering about it?
    - yterdy 4y ago
      >I don’t have any interest in it, it’s just not my understanding of the market. I'm just going to say that I don't think you're being completely honest, and leave it at that. >I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings. We are talking about professionally-managed properties, so this isn't a problem. I don't think basement apartments, ADUs, etc. are representative of most people's experience with renting 1-3 bedroom apartments, particularly in my area, and I would be very surprised to find that they had a significant effect on the rate set for units in the large buildings and complexes where most renters live. >Warehousing, care to cite something so I can read about it? I will not. It has been written about extensively. It is suspicious that you would want to avoid an "inaccurate understanding", but have yet to look it up yourself. I would expect someone truly and dispassionately interested to have heard of it prior to this conversation, as it is evidently a significant issue wrt the nature of the contemporary rental market. A simple search will return many articles about it. >Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount. So, for example, a unit is rented for effectively $1300/m, discounted off a $1500/m base rent. The next year, there is no discount, and the unit renews at 5%-10% over the base, not discounted rent - potentially a $300 difference monthly. You don't think that this potentially distorts prices in the market?

by yterdy 4y ago

ericd 4y ago

The percentage of landlords using it is likely too small to have the ability to engage in price fixing. They drive prices up, but only because the market clearing price in a lot of cities is higher than where they're currently priced. Do you have a source for property managers warehousing housing inventory? It doesn't ring true, at all.

yterdy 4y ago
I did a check of my municipality. 80% of the apartment complexes in the area use 3rd-party software of the like in question for their property management. Their capture of the market is likely sufficient to drive prices, which is why at least one company (RealPage) is facing multiple lawsuits alleging price-fixing. As for warehousing, it is a known issue in NYC and likely used in other places. I wonder what your interest is in handwaving these issues which are well-known and being acted on. You seem knowledgable except where it would tend to hurt your argument that everything is as it should be. What say you on rent specials?
- ericd 4y ago
  I don’t have any interest in it, it’s just not my understanding of the market. If I can help people avoid an inaccurate understanding of the world, I’ll try to help that, and if I’m the wrong one, then maybe I can learn and change my mind. I could certainly be wrong, it’s been a while since I worked on this stuff. When you say 80%, what are you using to find those/take that survey? I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings. This is also why you should never trust stats sourced from those sites, they don’t have a representative view of the market (a lot of news stories cite them uncritically when talking about rent trends). Warehousing, care to cite something so I can read about it? Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount. What are you wondering about it?
  - yterdy 4y ago
    >I don’t have any interest in it, it’s just not my understanding of the market. I'm just going to say that I don't think you're being completely honest, and leave it at that. >I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings. We are talking about professionally-managed properties, so this isn't a problem. I don't think basement apartments, ADUs, etc. are representative of most people's experience with renting 1-3 bedroom apartments, particularly in my area, and I would be very surprised to find that they had a significant effect on the rate set for units in the large buildings and complexes where most renters live. >Warehousing, care to cite something so I can read about it? I will not. It has been written about extensively. It is suspicious that you would want to avoid an "inaccurate understanding", but have yet to look it up yourself. I would expect someone truly and dispassionately interested to have heard of it prior to this conversation, as it is evidently a significant issue wrt the nature of the contemporary rental market. A simple search will return many articles about it. >Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount. So, for example, a unit is rented for effectively $1300/m, discounted off a $1500/m base rent. The next year, there is no discount, and the unit renews at 5%-10% over the base, not discounted rent - potentially a $300 difference monthly. You don't think that this potentially distorts prices in the market?