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unaltered housing markets have the same market signals of candy markets. If housing is "artificially expensive", others can build new housing and collect all of

unaltered housing markets have the same market signals of candy markets. If housing is "artificially expensive", others can build new housing and collect all of the customers. In this instance, find "Real Page" communities and build similar housing next to them and offer 5-10% less than Real Page and take all of the renters. The big problem in housing is the NIMBY and regulations surrounding it.

AlexandrB 4y ago
You would be right if housing location (mostly) didn't matter. But people generally want housing close to where they work and "location" is not a fungible input. To use an extreme example, if every landlord in Manhattan was using Real Page where would you build your competing housing? Manhattan is already pretty densely developed and housing in the other boroughs involves a much longer commute for someone working in Manhattan. Edit: Another point is that, unlike something like a web service, you can't collect all the customers. You could only steal as many customers as your buildings can hold. Meanwhile the landlords using Real Page are collecting higher rents and can squeeze you out of building additional property by bidding up the cost of the land you would have to build on.
carlosjobim 4y ago
Real estate is the only asset that is absolutely limited in quantity. With all other businesses you can compete if you are smart and resourceful, with real estate you have to first pay those who are sitting on the land. And they all demand a payout like winning the lottery to let go. In other businesses you have the very common occurrence that an old small/medium size business owner wants to sell his business and retire, but he's stuck because the actual value of his company is close to 0, and any new person is at best interested in the real estate or parts of the inventory. So the old person doesn't sell and the business continues to deteriorate until nothing is left. With real estate it is different, because there's always some old person sitting on it. You can't create it from nothing like you can any other asset.

AlexandrB 4y ago

You would be right if housing location (mostly) didn't matter. But people generally want housing close to where they work and "location" is not a fungible input. To use an extreme example, if every landlord in Manhattan was using Real Page where would you build your competing housing? Manhattan is already pretty densely developed and housing in the other boroughs involves a much longer commute for someone working in Manhattan. Edit: Another point is that, unlike something like a web service, you can't collect all the customers. You could only steal as many customers as your buildings can hold. Meanwhile the landlords using Real Page are collecting higher rents and can squeeze you out of building additional property by bidding up the cost of the land you would have to build on.

carlosjobim 4y ago

Real estate is the only asset that is absolutely limited in quantity. With all other businesses you can compete if you are smart and resourceful, with real estate you have to first pay those who are sitting on the land. And they all demand a payout like winning the lottery to let go. In other businesses you have the very common occurrence that an old small/medium size business owner wants to sell his business and retire, but he's stuck because the actual value of his company is close to 0, and any new person is at best interested in the real estate or parts of the inventory. So the old person doesn't sell and the business continues to deteriorate until nothing is left. With real estate it is different, because there's always some old person sitting on it. You can't create it from nothing like you can any other asset.