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This is the smoking gun, imo. It doesn’t matter if it’s accomplished via software, AI, or anything else—a blatant attempt to coordinate and coerce landlords int

This is the smoking gun, imo. It doesn’t matter if it’s accomplished via software, AI, or anything else—a blatant attempt to coordinate and coerce landlords into a given pricing regime is the definition of price fixing. I suspect there’s a lot of other price coordination schemes going on under the surface of our society just like this. The pandemic gave them cover, but the coordinated effort to raise prices destroys the efficient market hypothesis as does the gargantuan nature (and influence) of single actors within industries. There is no future for capitalism without harsh enforcement and trust-busting on this front.

dheera 4y ago
> destroys the efficient market hypothesis > There is no future for capitalism My honest opinion -- We don't need an efficient market. We don't need extreme capitalism. We need housing for everyone. We need government to step in and cap housing prices, build more housing, and drive away the 80-year-old farts with 15 houses still trying to extract money from poor college students. Housing should be built to LIVE in, not as an investment.
- runnerup 4y ago
  I’d be fine with them just building more housing and taxing either land value or empty units.
  - dheera 4y ago
    Taxing empty units -- yes, 100% Taxing land value -- this unfortunately leads to them passing on the taxes to renters, and rental housing becomes ever more unaffordable
    - adgjlsfhk1 4y ago
      the advantage of taxing land value is that you can pass on less tax for higher density which means higher density housing gets higher returns for landlords incentivizing construction.
    - 0xcde4c3db 4y ago
      LVT is usually meant to be paired with abolition of parking minimums and single-family zoning, so that the impact of the tax can be spread out among more people.
    - medvezhenok 4y ago
      It's very hard for landlords to pass on LVT completely - they are locked in (location-wise), where as renters are mobile... Also, as other comments said, it incentivizes increased density.
    - Nevermark 4y ago
      If you tax land value, but not development value, that incentivizes greatest productive use of land, and penalizes unproductive use of land. It incentivizes multi-unit construction, as the more productive the land is, the less onerous the land taxes become. (Wheres currently, developing land normally increases the property tax.) Increasing units per land both provides more housing, and reduces the tax/renter pass through. It disincentivizes holding unproductive land as an investment, since unproductive land gets taxed as highly as productive land. Removing the dysfunctional use of land as a store of value asset, would greatly reduce land and rent prices. Removing the store of value aspect, would also better align landlords incentives with their renters. As their business model would now purely revolve around their paying customers, without the subsidy of land prices going up due to investment mania. And improving rental properties would be cheaper, without the tax increases that entails today. All these benefits probably accrue from good economic alignment, because a land tax, instead of total property value tax, reflects that it is land, not its development, which is the finite resource. Land is finite, yet we all absolutely need land, along with food, air, and water. (Finite in a soft way, given different land is more or less usable). We only "own" land in passing. So those holding it shouldn't be lightly excluding better uses of an absolutely necessary resource. Land taxes are also morally well aligned. It is land (not development) that is a joint inheritance to us all. Land owners share a bit of that inheritance value with all of us, while still being allowed to manage it according to self-interest, opportunity and competition. Finally, property tax is part land tax, part wealth (development value) tax. Only taxing land eliminates a wealth tax. Upgrading your home won't increase your taxes. The humanitarian and economic benefits of properly aligned land taxes would directly accrue to everyone in society from the bottom to the top. It would improve overall economic efficiency and equality. It would eliminate a lot of local and national political conflicts.
      - carlosjobim 4y ago
        This would be a disaster for the ruling class. If there was any risk of such a tax reform coming to pass, they would nuke the whole country long before any such thing could happen.
        axus 4y ago
    - kilotaras 4y ago
      > this unfortunately leads to them passing on the taxes to renters No, this is not how this works. Rent is set by demand and (very insufficient) supply. If landlord could increase rent by $X - they would have increased it already (software in TFA speeds up the process, but doesn't set market clearing price). A simple thought experiment would be something akin "98% tax on rental income". "Pass it to renter" would imply 50x increase in rent to preserve existing income. Bottom line: make it easier to build more housing. it doesn't have to be subsidized/affordable/below market rate[0]. Any addition of units has downward effect on rent across all range of prices. [0] > [In Helsinki] The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run. From "City-wide effects of new housing supply: Evidence from moving chains" https://ideas.repec.org/p/fer/wpaper/146.html https://ideas.repec.org/p/fer/wpaper/146.html
      - runnerup 4y ago
        > software in TFA speeds up the process, but doesn't set market clearing price This software can affect the market price beyond just accelerating the speed at which it reaches equilibrium. The software can help create an inefficient market where suppliers of housing are no longer competing against each other and instead all, together, take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units. Similar to OPEC when OPEC was overwhelmingly dominant (before shale oil/shale gas explosion in USA/Russia). In a competitive market without this software, each individual player would try harder to reach 0% vacancy because each marginal unit sold would be nearly pure profit, and this could drive prices lower than leaving any units empty.
        kilotaras 4y ago
        > software can help create an inefficient market where ... suppliers of housing take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units. Right, if one can get majority of the landlords to collude and government doesn't crack on collusion - this software would create such market. Until we're in such dire situation: software is expediting price discovery, discovered prices are high because we don't build enough, we don't build enough because there's ridiculous amount of red tape, and doing anything that doesn't lead to more housing being built is spending time and effort on wrong problem.
- rootusrootus 4y ago
  The gov't had a crappy track record when it comes to making the market behave as it wants. Especially when the reasons are moral and not universal. How about we just build a lot more housing and let the chips fall where they may. Shouldn't even need to tax empty housing, either, if we build enough then the market can fix the rest pretty easily. The whole reason we have a housing problem to begin with isn't capitalism, it's government restrictions on building. Urban grown boundaries, zoning, you name it.
- HardlyCurious 4y ago
  Capping housing prices will cause less houses to be built, which is the opposite of your stated goal. Look, if you want more housing we have to let developers build more housing. Many areas in the country put in restrictions like limiting the height of new buildings because it's 'nice' not to have the views of the sky by blocked by a new building. Well nice costs something, and in this case it's housing scarcity.
  - dheera 4y ago
    > Capping housing prices will cause less houses to be built Not if you have the government build housing. We need something like Singapore's Housing Development Board (HDB) which keeps reusing the same architectural designs and elements for simple, functional, repeatable housing that just works. Singapore also has private-built condos, for those who want luxury, but the HDB flats are perfectly functional, dignified, clean, and comfortable. About 80% of Singaporeans live in government-built housing. Homelessness is almost nonexistent.
- hbrn 4y ago
  The problem with housing for everyone is that location demand is not distributed equally. How exactly would you provide housing for everyone who wants to live in Manhattan?
  - crooked-v 4y ago
    Not everyone can fit into Manhattan, but the other boroughs could all easily fit ten times as many people as they currently do.
    - hbrn 4y ago
      I don't understand what you're saying. First of all, no one is going to benefit if 25% of US population moves to NYC. Second, if we build millions of houses and they stay vacant, we just wasted a ton of money. Third, if we just give away all those houses for free, we're going to destroy the real estate market, which will have a cascading effect and cause a huge crisis in all sectors (and if you think that only billionaires will be affected, think harder). Fourth, due to misaligned incentives, governments are known to be way less efficient than private companies. So our best option is to be smart: build only so many houses to meet the demand and so that the utility they provide is roughly equal to their cost, and let private companies build those houses. Now we only need two things: a tool to measure the utility of something, and some incentives for private companies. I guess we all know where this is going.
onlyrealcuzzo 4y ago
> a blatant attempt to coordinate and coerce landlords into a given pricing regime is the definition of price fixing. There's no need for coercion. The landlords themselves are greedy (I don't think any more so than any other investor class). Landlords being greedy isn't really a problem. They're going to try to get the highest rent. That's capitalism. It's supposed to work in a COMPETITIVE market. RealPage fixing prices breaks that. It's clearly causing consumer harm and anti-competitive.
crooked-v 4y ago
>housing >efficient market That's already been destroyed by 50 years of city-enforced redlining and NIMBYism.

dheera 4y ago

> destroys the efficient market hypothesis > There is no future for capitalism My honest opinion -- We don't need an efficient market. We don't need extreme capitalism. We need housing for everyone. We need government to step in and cap housing prices, build more housing, and drive away the 80-year-old farts with 15 houses still trying to extract money from poor college students. Housing should be built to LIVE in, not as an investment.

runnerup 4y ago
I’d be fine with them just building more housing and taxing either land value or empty units.
- dheera 4y ago
  Taxing empty units -- yes, 100% Taxing land value -- this unfortunately leads to them passing on the taxes to renters, and rental housing becomes ever more unaffordable
  - adgjlsfhk1 4y ago
    the advantage of taxing land value is that you can pass on less tax for higher density which means higher density housing gets higher returns for landlords incentivizing construction.
  - 0xcde4c3db 4y ago
    LVT is usually meant to be paired with abolition of parking minimums and single-family zoning, so that the impact of the tax can be spread out among more people.
  - medvezhenok 4y ago
    It's very hard for landlords to pass on LVT completely - they are locked in (location-wise), where as renters are mobile... Also, as other comments said, it incentivizes increased density.
  - Nevermark 4y ago
    If you tax land value, but not development value, that incentivizes greatest productive use of land, and penalizes unproductive use of land. It incentivizes multi-unit construction, as the more productive the land is, the less onerous the land taxes become. (Wheres currently, developing land normally increases the property tax.) Increasing units per land both provides more housing, and reduces the tax/renter pass through. It disincentivizes holding unproductive land as an investment, since unproductive land gets taxed as highly as productive land. Removing the dysfunctional use of land as a store of value asset, would greatly reduce land and rent prices. Removing the store of value aspect, would also better align landlords incentives with their renters. As their business model would now purely revolve around their paying customers, without the subsidy of land prices going up due to investment mania. And improving rental properties would be cheaper, without the tax increases that entails today. All these benefits probably accrue from good economic alignment, because a land tax, instead of total property value tax, reflects that it is land, not its development, which is the finite resource. Land is finite, yet we all absolutely need land, along with food, air, and water. (Finite in a soft way, given different land is more or less usable). We only "own" land in passing. So those holding it shouldn't be lightly excluding better uses of an absolutely necessary resource. Land taxes are also morally well aligned. It is land (not development) that is a joint inheritance to us all. Land owners share a bit of that inheritance value with all of us, while still being allowed to manage it according to self-interest, opportunity and competition. Finally, property tax is part land tax, part wealth (development value) tax. Only taxing land eliminates a wealth tax. Upgrading your home won't increase your taxes. The humanitarian and economic benefits of properly aligned land taxes would directly accrue to everyone in society from the bottom to the top. It would improve overall economic efficiency and equality. It would eliminate a lot of local and national political conflicts.
    - carlosjobim 4y ago
      This would be a disaster for the ruling class. If there was any risk of such a tax reform coming to pass, they would nuke the whole country long before any such thing could happen.
      - axus 4y ago
  - kilotaras 4y ago
    > this unfortunately leads to them passing on the taxes to renters No, this is not how this works. Rent is set by demand and (very insufficient) supply. If landlord could increase rent by $X - they would have increased it already (software in TFA speeds up the process, but doesn't set market clearing price). A simple thought experiment would be something akin "98% tax on rental income". "Pass it to renter" would imply 50x increase in rent to preserve existing income. Bottom line: make it easier to build more housing. it doesn't have to be subsidized/affordable/below market rate[0]. Any addition of units has downward effect on rent across all range of prices. [0] > [In Helsinki] The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run. From "City-wide effects of new housing supply: Evidence from moving chains" https://ideas.repec.org/p/fer/wpaper/146.html https://ideas.repec.org/p/fer/wpaper/146.html
    - runnerup 4y ago
      > software in TFA speeds up the process, but doesn't set market clearing price This software can affect the market price beyond just accelerating the speed at which it reaches equilibrium. The software can help create an inefficient market where suppliers of housing are no longer competing against each other and instead all, together, take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units. Similar to OPEC when OPEC was overwhelmingly dominant (before shale oil/shale gas explosion in USA/Russia). In a competitive market without this software, each individual player would try harder to reach 0% vacancy because each marginal unit sold would be nearly pure profit, and this could drive prices lower than leaving any units empty.
      - kilotaras 4y ago
        > software can help create an inefficient market where ... suppliers of housing take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units. Right, if one can get majority of the landlords to collude and government doesn't crack on collusion - this software would create such market. Until we're in such dire situation: software is expediting price discovery, discovered prices are high because we don't build enough, we don't build enough because there's ridiculous amount of red tape, and doing anything that doesn't lead to more housing being built is spending time and effort on wrong problem.
rootusrootus 4y ago
The gov't had a crappy track record when it comes to making the market behave as it wants. Especially when the reasons are moral and not universal. How about we just build a lot more housing and let the chips fall where they may. Shouldn't even need to tax empty housing, either, if we build enough then the market can fix the rest pretty easily. The whole reason we have a housing problem to begin with isn't capitalism, it's government restrictions on building. Urban grown boundaries, zoning, you name it.
HardlyCurious 4y ago
Capping housing prices will cause less houses to be built, which is the opposite of your stated goal. Look, if you want more housing we have to let developers build more housing. Many areas in the country put in restrictions like limiting the height of new buildings because it's 'nice' not to have the views of the sky by blocked by a new building. Well nice costs something, and in this case it's housing scarcity.
- dheera 4y ago
  > Capping housing prices will cause less houses to be built Not if you have the government build housing. We need something like Singapore's Housing Development Board (HDB) which keeps reusing the same architectural designs and elements for simple, functional, repeatable housing that just works. Singapore also has private-built condos, for those who want luxury, but the HDB flats are perfectly functional, dignified, clean, and comfortable. About 80% of Singaporeans live in government-built housing. Homelessness is almost nonexistent.
hbrn 4y ago
The problem with housing for everyone is that location demand is not distributed equally. How exactly would you provide housing for everyone who wants to live in Manhattan?
- crooked-v 4y ago
  Not everyone can fit into Manhattan, but the other boroughs could all easily fit ten times as many people as they currently do.
  - hbrn 4y ago
    I don't understand what you're saying. First of all, no one is going to benefit if 25% of US population moves to NYC. Second, if we build millions of houses and they stay vacant, we just wasted a ton of money. Third, if we just give away all those houses for free, we're going to destroy the real estate market, which will have a cascading effect and cause a huge crisis in all sectors (and if you think that only billionaires will be affected, think harder). Fourth, due to misaligned incentives, governments are known to be way less efficient than private companies. So our best option is to be smart: build only so many houses to meet the demand and so that the utility they provide is roughly equal to their cost, and let private companies build those houses. Now we only need two things: a tool to measure the utility of something, and some incentives for private companies. I guess we all know where this is going.

onlyrealcuzzo 4y ago

> a blatant attempt to coordinate and coerce landlords into a given pricing regime is the definition of price fixing. There's no need for coercion. The landlords themselves are greedy (I don't think any more so than any other investor class). Landlords being greedy isn't really a problem. They're going to try to get the highest rent. That's capitalism. It's supposed to work in a COMPETITIVE market. RealPage fixing prices breaks that. It's clearly causing consumer harm and anti-competitive.

crooked-v 4y ago

>housing >efficient market That's already been destroyed by 50 years of city-enforced redlining and NIMBYism.