4 ms·

It depends. If everything is owned by the same management or equity firm, then no.

ch4s3 3y ago
The idea that a single firm or even a stable cartel could effectively control prices in a market as large as Boston is just naive.
- PartiallyTyped 3y ago
  They can just run a cartel [1]. I don’t understand why anyone thinks things like housing can have any competition when housing is not a commodity but a necessity and the margins are rather thin with little to no space for efficiency and innovation, and private equity can just buy apartments and houses. > In one neighborhood in Seattle, ProPublica found, 70% of apartments were overseen by just 10 property managers, every single one of which used pricing software sold by RealPage. [1] https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r...
  - steveBK123 3y ago
    Property managers <> owners. RE investment is very hands on, and people hiring property managers to deal with it on their behalf. The idea that the top 10 own 70% of the market is not a shock. You could probably do this "top 10 own 70% of __ market" for literally anything.
    - thfuran 3y ago
      I think you skipped the last clause of the sentence you're referencing (and forgot to look at the source). The real point is that one software vendor effectively controls all the pricing.
    - PartiallyTyped 3y ago
      Notice that you omitted the important part: > every single one of which used pricing software sold by RealPage. Which makes this effectively a cartel.
- LightBug1 3y ago
  De facto cartels ... what do you think is going on now around the world, let alone speculatively in Boston.
  - ethanbond 3y ago
    Not cartels. Rising productivity means everyone knows they can raise rents. No coordination necessary.
  - prepend 3y ago
    Not that.
- tomrod 3y ago
  But if everyone uses the same software for rent or the same model to price housing...
steveBK123 3y ago
Sure less owners is bad for competition, but more supply itself creates competition in a sense. Let's say theres 100 apartments in the entire town, and they are all owned by the same company. Next let's say they build 50 more apartments and theres now 1000 apartments still all owned by the same company. Given the number of apartments has increased, renters now have more power to negotiate as the owners have more units they need to fill. This is why Tesla for example is dropping prices as they produce more cars and they have inventory vs when they had 6-12 month backlog & scalpers were flipping used vehicles for more than new in 2021-2022. When supply is severely constrained, you end up with bidding wars for the finite goods.
- HWR_14 3y ago
  > as the owners have more units they need to fill. Or they can leave the units empty. There's no reason all units must be filled.
- maximinus_thrax 3y ago
  > Let's say theres 100 apartments in the entire town, and they are all owned by the same company. Next let's say they build 50 more apartments and theres now 1000 apartments still all owned by the same company. Given the number of apartments has increased, renters now have more power to negotiate as the owners have more units they need to fill. Unfortunately, that's not what is happening on the ground. In my town, they've built hundreds of units over the past years and rent has gone up. The building facing mine was newly built and I went there to see if I can score some deal and they did not budge at all. Half the building was kept empty for about a year, until the new generations of tech workers moved to the area to occupy them. It's a numbers game but not the way you think. It's often more lucrative to lose money in the short term but still keep rent expensive for the future. This is why owners are being sued right now for price fixing by using Realpage. See https://mynorthwest.com/3719431/property-owners-accused-of-price-fixing-rent-in-seattle/ https://mynorthwest.com/3719431/property-owners-accused-of-p...
  - steveBK123 3y ago
    I think a lot of people mistake cause & effect. What if the housing is being built because they expect rent to go up? If supply went up say 5% and rent went up 10%, what do people think would have happened in the 0% supply increase mirror universe? People can't just make you spend money. US has been underbuilding housing, especially in blue coastal cities, for generations. The last 25 years has seen a big move back to these cities where everything is getting bid up. And then the surrounding burbs, commuter built, secondary cities, etc follow suit.
dghughes 3y ago
A REIT is the worst. One in my town is demanding a 20% rent increase. And also asking for tax breaks. Half the tenants will have to move and their tax money is going to the company forcing them out. The people in the building are in well paying jobs like IT professions not low income or elderly (but they are also facing the same thing).

The idea that a single firm or even a stable cartel could effectively control prices in a market as large as Boston is just naive.

PartiallyTyped 3y ago
They can just run a cartel [1]. I don’t understand why anyone thinks things like housing can have any competition when housing is not a commodity but a necessity and the margins are rather thin with little to no space for efficiency and innovation, and private equity can just buy apartments and houses. > In one neighborhood in Seattle, ProPublica found, 70% of apartments were overseen by just 10 property managers, every single one of which used pricing software sold by RealPage. [1] https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r...
- steveBK123 3y ago
  Property managers <> owners. RE investment is very hands on, and people hiring property managers to deal with it on their behalf. The idea that the top 10 own 70% of the market is not a shock. You could probably do this "top 10 own 70% of __ market" for literally anything.
  - thfuran 3y ago
    I think you skipped the last clause of the sentence you're referencing (and forgot to look at the source). The real point is that one software vendor effectively controls all the pricing.
  - PartiallyTyped 3y ago
    Notice that you omitted the important part: > every single one of which used pricing software sold by RealPage. Which makes this effectively a cartel.
LightBug1 3y ago
De facto cartels ... what do you think is going on now around the world, let alone speculatively in Boston.
- ethanbond 3y ago
  Not cartels. Rising productivity means everyone knows they can raise rents. No coordination necessary.
- prepend 3y ago
  Not that.
tomrod 3y ago
But if everyone uses the same software for rent or the same model to price housing...

steveBK123 3y ago

Sure less owners is bad for competition, but more supply itself creates competition in a sense. Let's say theres 100 apartments in the entire town, and they are all owned by the same company. Next let's say they build 50 more apartments and theres now 1000 apartments still all owned by the same company. Given the number of apartments has increased, renters now have more power to negotiate as the owners have more units they need to fill. This is why Tesla for example is dropping prices as they produce more cars and they have inventory vs when they had 6-12 month backlog & scalpers were flipping used vehicles for more than new in 2021-2022. When supply is severely constrained, you end up with bidding wars for the finite goods.

HWR_14 3y ago
> as the owners have more units they need to fill. Or they can leave the units empty. There's no reason all units must be filled.
maximinus_thrax 3y ago
> Let's say theres 100 apartments in the entire town, and they are all owned by the same company. Next let's say they build 50 more apartments and theres now 1000 apartments still all owned by the same company. Given the number of apartments has increased, renters now have more power to negotiate as the owners have more units they need to fill. Unfortunately, that's not what is happening on the ground. In my town, they've built hundreds of units over the past years and rent has gone up. The building facing mine was newly built and I went there to see if I can score some deal and they did not budge at all. Half the building was kept empty for about a year, until the new generations of tech workers moved to the area to occupy them. It's a numbers game but not the way you think. It's often more lucrative to lose money in the short term but still keep rent expensive for the future. This is why owners are being sued right now for price fixing by using Realpage. See https://mynorthwest.com/3719431/property-owners-accused-of-price-fixing-rent-in-seattle/ https://mynorthwest.com/3719431/property-owners-accused-of-p...
- steveBK123 3y ago
  I think a lot of people mistake cause & effect. What if the housing is being built because they expect rent to go up? If supply went up say 5% and rent went up 10%, what do people think would have happened in the 0% supply increase mirror universe? People can't just make you spend money. US has been underbuilding housing, especially in blue coastal cities, for generations. The last 25 years has seen a big move back to these cities where everything is getting bid up. And then the surrounding burbs, commuter built, secondary cities, etc follow suit.

dghughes 3y ago

A REIT is the worst. One in my town is demanding a 20% rent increase. And also asking for tax breaks. Half the tenants will have to move and their tax money is going to the company forcing them out. The people in the building are in well paying jobs like IT professions not low income or elderly (but they are also facing the same thing).