7 ms·

Eh. Is it collusion to look at the prices for similar properties on craigslist/zillow and then set your rate accordingly? Is it collusion to pay someone to do

• ajmurmann 3y ago
  [flagged]
  • wizerdrobe 3y ago
    Gas stations buy routine shipments of fuel with fluctuations based on the broader market. Renting out real estate is quite a bit different, you buy it the once and lock in customers… nothing stops me from going across the street for my next 12 gallon purchase. Seems a stretch to compare the two here…
    • ajmurmann 3y ago
      > Gas stations buy routine shipments of fuel with fluctuations based on the broader market. Not sure how this impacts sales prices. I know gas station owners first hand who pre-everything-being-online were asking for reports of gas prices in neighboring towns to adjust their prices. >buy it the once and lock in customers… nothing stops me from going across the street for my next 12 gallon purchase. How often do rental prices get adjusted and how often do tenants move? The frequencies anecdotally seem not that disconnected. The only reason we are arguing about any of this is because housing supply is super short because of broken zoning and permitting. Build more and take market power away from suppliers!
  • zeusk 3y ago
    [flagged]
    • Plasmoid 3y ago
      Ad-hominem attacks aren't really allowed here at HN
    • colpabar 3y ago
      I love the hypotheticals here. person a: we should hold ultra wealthy landlords who own hundreds of units accountable when they do bad things that make the real estate market worse for everyone else person b: well what about my hypothetical grandma? she rents out a unit that is the second floor of her house. she doesn't know how to use the internet and so she is completely outside of the scope of topic at hand, but are you seriously saying that she should be punished just for adjusting prices for inflation? besides, if rent is so high, why can't these people just buy houses?
      • ajmurmann 3y ago
        > we should hold ultra wealthy landlords who own hundreds of units accountable when they do bad things that make the real estate market worse for everyone else Are these "landlords" ultra wealthy or are these property management firms that manage other people's property (like the grandma's from scenario b) or are they real estate investment firms that operate with other people's (maybe even your 401k's) money?
  • bigtex88 3y ago
    Awful, awful comparison. The market for rental units in a city is not even in the same sphere as the market for oil, WHICH IS WORLDWIDE.
    • ajmurmann 3y ago
      Your gas station sells across borders?
  • pixl97 3y ago
    Back to your point. If I as a gas station subscribe to a service that says Sell gas at X price, and if price drops below X don't sell gas at all then I do hope you realize all hell would quickly break loose.
    • mattmcknight 3y ago
      It's not so much don't sell gas as "don't lower your price below x". If enough gas stations comply, you won't have an option less than x. But it would seem to make the returns from not complying higher, as you would get all of the business. The problem with housing is that the sellers' supply is limited, those that don't go along with the minimum pricing scheme quickly go to 100% occupancy.
      • pixl97 3y ago
        No, I mean if you did exactly what I stated with gas prices you would be punished under existing gouging laws in most states.
  • neaden 3y ago
    To be clear, it is illegal for Gas Station owners to collude and set prices and there have been multiple law suits about this. https://thehill.com/policy/energy-environment/570037-ftc-to-probe-for-any-collusive-practices-on-gas-prices/ https://thehill.com/policy/energy-environment/570037-ftc-to-...
• TheJoeMan 3y ago
  No, because a true market maker will decrease the price if needed to complete the transaction. In this real estate pricing collusion, the software encouraged landlords to keep their units empty rather than reduce price as needed to achieve capacity. This only works if everyone else does the same aka. collusion.
  • onlyrealcuzzo 3y ago
    > In this real estate pricing collusion, the software encouraged landlords to keep their units empty rather than reduce price as needed to achieve capacity. Did it? Or did ZIRP? People aren't going to sit around losing money if central banks aren't guaranteeing your asset price (on leverage) is going up about 4x your interest rate.
  • judge2020 3y ago
    Occupancy is important, but price per square is more important. What will make the most money in the long run? Having a unit sit vacant an extra 2 months at a higher price might be more profitable than "completing the transaction" at a low point in the market.
    • jpalawaga 3y ago
      that is a very easy price to calculate, and if you've done the calculation, you've noticed that landlords are not being realistic about things. at this point, a lot of them are not adjusting rent down because it will reflect on their property value, which is an additional hidden variable in the equation. It should not be profitable to keep property empty. It is a drain on society.
      • CapstanRoller 3y ago
        >It is a drain on society. This does not factor into any calculation about housing prices, unfortunately, and will likely never be factored in until there's a literal revolution (highly unlikely). Just like pollution, the homeless are either ignored or bulldozed out of sight and out of mind.
• WoahNoun 3y ago
  The difference is the software/forums encouraged the landlords to all leave more units empty then they normally would to raise prices.
  • hnburnsy 3y ago
    In todays housing shortage enviornment I would think that this is really going hurt them with the jury.
  • kaibee 3y ago
    > The difference is the software/forums encouraged the landlords to all leave more units empty then they normally would to raise prices. Well, in a working market, you'd have more supply get built up by developers and those landlords would lose pricing power. Or it could still fail in the other direction, people would find the area too expensive and find jobs elsewhere. I think my take here is if the landlords each had, competent, ruthless capitalist employees, they would end up setting the price just as high as RealPage, because RealPage doesn't actually have any kind of mechanism to enforce compliance with the cartel structure.
    • TheCleric 3y ago
      > because RealPage doesn't actually have any kind of mechanism to enforce compliance with the cartel structure. Actually as others have noted, they do. Don't use their prices at least 80% of the time, and you get kicked off.
• denverllc 3y ago
  They weren’t merely using price information to suggest rent. They were forcing landlords to accept the proposed rent 90% of the time or greater (and providing a lower rent required approval from the firm). That’s the collusion — preventing landlords from lowering prices from competitive forces.
  • Aunche 3y ago
    > They were forcing landlords to accept the proposed rent 90% of the time or greater If this were true, it should be easy to find the terms of the contract the spelled this out. They didn't. What they found instead what an out of context quote that vaguely sounds like that, but is more likely expressing that if you want to profit from our recommendations, you actually need to follow them.
• aidenn0 3y ago
  > Essentially isn't the company at this point just acting as a market maker, by figuring out the market clearing price where as many units as possible are filled at the highest price? No, because the software was recommending leaving units unfilled. Rather than being like doing market research on craigslist, using this site is more like everybody hiring the same consultant to set their prices and vacancy rates, which does feel a bit like laundering the collusion.
• EGreg 3y ago
  Meh. The answer is Yes. And this phenomenon goes FAR beyond real estate recently. I wrote about it here: https://magarshak.com/blog/?p=385 https://magarshak.com/blog/?p=385
• jancsika 3y ago
  I'll take a shot and someone with domain expertise can opine on my low-effort take. In kaibee's first paragraph, there's a missing question: Is it collusion to pay someone to set rates accordingly by using information and decision-making processes you yourself could not have gotten on your own? I think this is the key. E.g., looking at Zillow could tell a given landlord that they need to charge more rent for a given unit. But looking at Zillow couldn't tell that same landlord to, say, keep that unit vacant for months in the hopes there is a multi-landlord unit-vacancy plan to increase prices across a city. And IIRC, these kinds of decisions have been made by a lot of landlords in a lot of these markets. In fact, if I'm a landlord, I'm not going to take that risk unless I've got a good reason to believe that a) the software I'm relying on is used by the vast majority of other landlords, and b) the software is advising and strongly incentivizing everyone else to do the same thing. (And possibly that there are penalties if the other landlords don't make that move.)
  • cptaj 3y ago
    I think the problem here is that marketplaces need to be neutral and regulated as public utilities. The same thing happens with amazon stealing vendor business, and arbitrarily banning people without legal recourse. When you set the market, you can't be allowed to dictate who participates. Its the same core problem. These private marketplaces grow to the point where everyone depends on them and then shenanigans ensue
  • renewiltord 3y ago
    I agree. I think the crucial functionality is the common knowledge of common knowledge that no one else will renege on the deal. That’s effectively cartelization.
  • WalterBright 3y ago
    Part of this may be driven by the laws that prevent landlords from evicting tenants or raising rates.
    • lotsofpulp 3y ago
      The US court system is really dropping the ball here. Simple evictions for nonpayment should take a week and almost no legal costs. Instead, I am looking at 6+ months of lawyer and court costs in some of the states. And this is at hotels. Our solution? Force all hotel guests to checkout before reaching the statutory number of nights that afford them tenant protections. Which is massively inconveniencing responsible people, all because the government wants to protect scammers.
• michaelmrose 3y ago
  The natural result of a free market for an essential good with inelastic demand and a finite supply is collusion in result if not in fact making owning the limited supply increasingly profitable pulling more money into the system until eventually a handful of major players control most of the space while lobbying to make competing options increasingly hard to build. Eventually it becomes profitable and logical to consolidate players until you are either renting from Rent INC or Homes4U if you rent an apartment. Single family homes see a related raise in price as supply outpaces demand leading the top 10% in wealth including both well off young/middle ages people and old folks investing wealth earned over a lifetime to invest in rental homes competing with people who have income but little wealth driving the cost further out of reach for people who aren't already home owners. Because this benefits half the country we ignore the fact that its sucking the life out of the other half and celebrate the increase in household wealth for middle class folks. Meanwhile another group of vampires is waiting to suck the life out of these mom and pop landlords as they get old and overpay for medical services. Because grandpa lives to 95 instead of 90 there is no generational transfer of wealth other than to the financial services industry which acquired grandpas rental house cheap when he ran out of money at 75 and his house even cheaper at 90 in a reverse mortgage so he could stay in his house for a few more years. 40 years later housing medicine and education have broken the middle class even though the first increasingly builds tiny shitty apartments which fall apart, the second increasingly relies on nurse practitioners and other less than doctors, and the latter pays adjunct professors like burger flippers. Somehow even when those industries absolutely dominate normal folks paychecks not much of the money even seems to stick to the hands of the folks actually doing the work. To say that prices are the result of a free market is both true and meaningless. Unmanaged free markets aren't really good for anything.
• happytiger 3y ago
  Research vs racketeering. The distinction is that it is illegal and that is the entire distinction. So it matters what society deems acceptable behavior for businesses. The line is arbitrary, but well defined in case law.
• foxyv 3y ago
  By colluding to set prices to a certain level they are implementing a monopoly pricing scheme. Otherwise competitors would set their prices lower to sell the most housing. As it is, housing is going vacant, but profits are higher because of increased price.