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I see supply/demand discussed here every day. For this crowd, it's as visible as can get. Here is (IME) one of the more common blind spots when discussing hous

by skulk 3y ago

I see supply/demand discussed here every day. For this crowd, it's as visible as can get. Here is (IME) one of the more common blind spots when discussing housing prices (specifically rents): price fixing by corporate-run algorithmic cartels: https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r...

pydry 3y ago
Supply and demand doesnt work for land like it does for everything else. The more you tax, say, cars, the fewer youll get and vice versa. The more land is taxed, the more becomes available and vice versa. Land isnt taxed and the main proxy for land tax (property taxes) are at historic lows.
- cudgy 3y ago
  Property taxes are low? Where is this the case? Most communities base property taxes on millage (percentage) of property values which have been going sky high.
artsytrashcan 3y ago
And PP only profiled one company. It's almost certainly being perpetrated by others. The company my own property manager uses once boasted in their promotional literature that using their software boosted prices 15% when compared to controls. Investors are using this software because it allows them to artificially inflate "market rate" rents in concert with competitors, and disconnected from actual demand, full stop.
darksaints 3y ago
It’s really hard to claim price fixing when occupancy rates have been 98% or higher for decades, as is the case of nearly all coastal cities in the US. And I have first hand experience with them dropping prices when demand drops (I literally had my renewal rent drop when there was a short downturn). They’re just a dynamic pricing algorithm, they have no power over supply and demand. And it’s kinda annoying to see this idea trotted out when we obviously have a supply problem.
- skulk 3y ago
  It's annoying to you to hear that the majority of rental units are effectively controlled by a soulless organization? From the article I linked: > One of the algorithm’s developers told ProPublica that leasing agents had “too much empathy” compared to computer generated pricing. The article also has multiple anecdotes that run counter to your own. Just because you saw rents drop in response to demand decline doesn't mean this is what happens in practice most of the time. > For tenants, the system upends the practice of negotiating with apartment building staff. RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money. > Hutchinson, who is an analyst for the police department, wondered if a computer algorithm was behind building staff’s inflexibility. “It was pretty obvious they should have been dropping prices,” she said. “They were digging their heels in.” Please remember: this isn't some economics game like the price of cars or eggs. Housing is something you need TO LIVE and for which there is NO SUBSTITUTE. Increasing supply will only go so far, as long as your society allows it to be controlled by entities that see is it as a profit maximization game, you will see horrific outcomes.
  - darksaints 3y ago
    Prices were rising dramatically for 50 years before this company even existed. Because supply was restricted. Airlines have been using dynamic pricing for 50 years, and prices are lower now than they were 50 years ago. Because supply was not restricted. That is all that matters. Get vacancy rates above 10% and maybe then we’ll talk about dynamic pricing boogiemen.

by skulk 3y ago

pydry 3y ago

Supply and demand doesnt work for land like it does for everything else. The more you tax, say, cars, the fewer youll get and vice versa. The more land is taxed, the more becomes available and vice versa. Land isnt taxed and the main proxy for land tax (property taxes) are at historic lows.

cudgy 3y ago
Property taxes are low? Where is this the case? Most communities base property taxes on millage (percentage) of property values which have been going sky high.

artsytrashcan 3y ago

And PP only profiled one company. It's almost certainly being perpetrated by others. The company my own property manager uses once boasted in their promotional literature that using their software boosted prices 15% when compared to controls. Investors are using this software because it allows them to artificially inflate "market rate" rents in concert with competitors, and disconnected from actual demand, full stop.

darksaints 3y ago

It’s really hard to claim price fixing when occupancy rates have been 98% or higher for decades, as is the case of nearly all coastal cities in the US. And I have first hand experience with them dropping prices when demand drops (I literally had my renewal rent drop when there was a short downturn). They’re just a dynamic pricing algorithm, they have no power over supply and demand. And it’s kinda annoying to see this idea trotted out when we obviously have a supply problem.

skulk 3y ago
It's annoying to you to hear that the majority of rental units are effectively controlled by a soulless organization? From the article I linked: > One of the algorithm’s developers told ProPublica that leasing agents had “too much empathy” compared to computer generated pricing. The article also has multiple anecdotes that run counter to your own. Just because you saw rents drop in response to demand decline doesn't mean this is what happens in practice most of the time. > For tenants, the system upends the practice of negotiating with apartment building staff. RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money. > Hutchinson, who is an analyst for the police department, wondered if a computer algorithm was behind building staff’s inflexibility. “It was pretty obvious they should have been dropping prices,” she said. “They were digging their heels in.” Please remember: this isn't some economics game like the price of cars or eggs. Housing is something you need TO LIVE and for which there is NO SUBSTITUTE. Increasing supply will only go so far, as long as your society allows it to be controlled by entities that see is it as a profit maximization game, you will see horrific outcomes.
- darksaints 3y ago
  Prices were rising dramatically for 50 years before this company even existed. Because supply was restricted. Airlines have been using dynamic pricing for 50 years, and prices are lower now than they were 50 years ago. Because supply was not restricted. That is all that matters. Get vacancy rates above 10% and maybe then we’ll talk about dynamic pricing boogiemen.