6 ms·

Big landlords are colluding to raise rents, D.C. lawsuit alleges

164 points by janandonly 3y ago

oofta-boofta 3y ago
[dead]
game_the0ry 3y ago
I am very interested to know how this works under the hood. I am assuming that landlords are "warehouse-ing" empty units, and then jacking up the price for the remaining units so high that it makes up for the existing vacancy. Basically, this algorithm is turning participating landlords into an effective monopoly. Super grey area, but I think that should be illegal. That would explain why NYC remained persistently high even after pandemic.
- projektfu 3y ago
  I don't think it requires warehousing. Any underpriced (non-cartel) units are going to be held onto by the current renter because the available market is too expensive to move. But the renters being forced to the market by rent increases aren't finding cheaper places so they're paying higher rents. Presumably any new construction is going to be in the cartel.
- klipt 3y ago
  Yeah I think the idea is that without the algorithm, a landlord is more likely to game theoretically "defect" and advertise lower rent to fill a vacancy, but the algorithm discourages that in favor of cooperation/collusion.
- LeafItAlone 3y ago
  > "warehouse-ing" empty units Yes. I live in a building managed by one of the named defendants. I regularly check the available units page to see what is available (because I want to move into a bigger unit, but only specific ones). I've seen some units on the page for a long time, then get taken off, then put back on again a few weeks later. My building explicitly does not do any short term rentals, including corporate (I don't know about military, but none of them are furnished, so I doubt it). Some units in particular I have tracked to be available for over a year, with practically only price increases. They (and all other available units) do drop by 10s of dollars/month on a somewhat cyclical basis, which seems like it coincides with availability boundaries so that apartments don't all become rented and available all at the same time.
wolverine876 3y ago
Does anyone here know or develop RealPage Revenue Management software and want to comment on it? Edit: In business, I try to do something productive for others and earn a return on that. Our business culture seems to have taken our worst instincts and made them religion: Squeeze every drop of blood out of everyone. What is RealPage producing for our society?
- anon373839 3y ago
  > I try to do something productive for others and earn a return on that. This is how to achieve satisfaction with your work. Unless you’re sociopathic, knowing that your work takes advantage of others causes cognitive dissonance.
  - gonzo41 3y ago
    There's plenty of FB developers floating about here. That platform has had a pretty big impact on place like Myanmar. and everyone seems to just ignore that fact.
    - danuker 3y ago
      Maybe they're not ignoring it. They're just not attracting attention to the fact that they're pushing down the price of supremacy on human attention.
    - enjo 3y ago
      I mean it’s had an enormously negative effect on the planet in general. Democracy in the states is on the brink mostly because of Facebook and Twitter.
- toast0 3y ago
  Anyone working there should keep themselves out of comment sections while they and/or their customers are embroiled in lawsuits, so I'd imagine you won't get a response from them. Devil's advocate: if you believe high density living is important/required to reduce society's environmental footprint, someone needs to build it, and someone needs to operate it. Helping people who operate high density residential charge more for it, makes it more desirable to operate, and therefore increases demand for construction of high density living spaces. Thus, helping society move towards higher density living and saving the environment.
8jkdsa8h4ebjvxz 3y ago
sad world
alephnerd 3y ago
This is smart that there is an attempt in the DC Superior Court as well. There are a couple other lawsuits against Realpage with a similar premise as we speak at the United States District Court for the District of Columbia, United States District Court for the Middle District of Tennessee, and the United States District Court for the Southern District of California. I think the federal district lawsuits were all merged and moved to United States District Court for the Middle District of Tennessee a couple days ago, so a number of state level litigations will be a good backup. Essentially, it looks like there is a coordinated attempt to define algorithmic antitrust at the Supreme Court level. If the DC Superior Court and the Federal Court have a conflicting interpretation, this needs to be reconciled and seems like the type of case that would end up in the Supreme Court. This has massive implications for AdTech, FinTech, and multiple other industries, probably way more impactful than the Google FTC suit. Edit: My Interpretation from my comment below If a subset of companies use the exact same algorithm for price discovery, is there a form of price-fixing? This is the key question being argued. If the courts rule against Realpage, then any form of algorithmic price discovery en-masse could be found to be anti-competitive. This might mean you can't use TheTradeDesk and Google Adsense en-masse for example. Basically, as of today, a lot of price discovery is now automated by a majority of companies using a handful of vendors for this. Lawyers of HN (looking at your raynier) please hold me accountable for my explanation.
- danielfoster 3y ago
  It will be interesting to see how this argued. I personally am not sure such a complex evaluation of the algorithm is needed. If everyone agrees to tell Frank what they charge with the understanding Frank will use this data to tell you what to charge, that’s collusion.
  - alephnerd 3y ago
    You don't need to evaluate the algorithm. If a subset of companies use the exact same algorithm for price discovery, is there a form of price-fixing? This is the key question being argued. If the courts rule against Realpage, then any form of algorithmic price discovery en-masse could be found to be anti-competitive. This might mean you can't use TheTradeDesk and Google Adsense en-masse for example. Basically, as of today, a lot of price discovery is now automated by a majority of companies using a handful of vendors for this.
wolverine876 3y ago
RealPage is an aggressive, powerful organization, the lawsuit alledges: > RealPage's software has set the rent at more than 30% of apartments in multifamily buildings in D.C. and 60% of units in large multifamily buildings, per the lawsuit. The percentages are even higher for the broader D.C. metro area. > The software company actively "polices" landlords to ensure that they comply with the rent cost it generates, the lawsuit alleges. Failure to impose the RealPage rents could lead to landlords being expelled from the organization, according to the suit. And nationwide: > There were 49.5 million rental units in the U.S. as of 2022, according to data from the U.S. Department of Housing and Urban Development. > RealPage in 2020 said its software served 19.7 million rental units of all types in the U.S. — more than a third of all rental units nationwide.
sklargh 3y ago
This reminds me a lot of the Airline Tariff Publishing Company case in the 90s. Airlines used an industry marketplace to price fix and were successfully enjoined from doing so. I would not be surprised if in many industries similar behavior hides behind an algorithmic veneer. Judgement here: https://www.justice.gov/atr/final-judgment-us-v-airline-tariff-publishing-company-et-al https://www.justice.gov/atr/final-judgment-us-v-airline-tari...
- alephnerd 3y ago
  > would not be surprised if in many industries similar behavior hides behind an algorithmic veneer. This is the Billion Dollar Question about the Realpage suit, and why I kind of dislike Lina Khan. She could have directly attacked this question which is much more fundamental, instead of the business incorporation question she described in her seminal Amazon paper. Algorithmic price-fixing is a much more fundamental question than bigtech populism with extra steps. It would also give the hammer needed to hold companies like Amazon or Google accountable if they were anticompetitive.
  - enjo 3y ago
    She could but courts aren’t going to hear it. They almost always make decisions on the narrowest criteria and this case (and others like it) are about old fashioned collusion. The fact that participation in Real Page requires you to use their pricing is the thing that will decide this case. The algorithm won’t really be at issue at all.
local_crmdgeon 3y ago
Game theory makes this very unlikely, but we'll see if they have a strong case.
- CPLX 3y ago
  What do you mean "makes this very unlikely" they're literally doing it, there's mountains of evidence that it's actually happening. They haven't really been trying to hide it the only real argument is if you somehow get a pass on a charge of colluding if a software platform is involved.
  - constantly 3y ago
    Two economists walking, spotted a $100 bill on the ground, and did not pick it up under the reasoning that if there were really $100 on the ground, someone else would have picked it up already.
- acdha 3y ago
  That’s a strong claim: can you expand your reasoning and provide some data? They provide a lot in the case so I’d expect some specific examples of why you don’t agree with their claims.
qwertyuiop_ 3y ago
It’s just not DC. Boston and Metro west of Boston, Burlington, Waltham Framingham, Natick are flooded with properties owned by Greystar, Equity Residential and Avalon. The rents rise to the cents in sync. If there are a tort lawyers out there this is great opportunity if you put in some time. They are inflated atleast 100-150% of a reasonable market rate.
- wolverine876 3y ago
  From the OP: > There were 49.5 million rental units in the U.S. as of 2022, according to data from the U.S. Department of Housing and Urban Development. > RealPage in 2020 said its software served 19.7 million rental units of all types in the U.S. — more than a third of all rental units nationwide.
bcrl 3y ago
The Behind the Bastards podcast on this issue was quite enlightening. I do wonder if the podcast was part of the reason why this lawsuit happened. You can find part 1 over here: https://podcasts.apple.com/us/podcast/part-one-why-is-the-rent-so-damn-high/id1373812661?i=1000585476273 https://podcasts.apple.com/us/podcast/part-one-why-is-the-re...
deleted 3y ago
[deleted]
Psychoshy_bc1q 3y ago
Rentseekers are the worst type of people.

164 points by janandonly 3y ago

[dead]

I am very interested to know how this works under the hood. I am assuming that landlords are "warehouse-ing" empty units, and then jacking up the price for the remaining units so high that it makes up for the existing vacancy. Basically, this algorithm is turning participating landlords into an effective monopoly. Super grey area, but I think that should be illegal. That would explain why NYC remained persistently high even after pandemic.

projektfu 3y ago
I don't think it requires warehousing. Any underpriced (non-cartel) units are going to be held onto by the current renter because the available market is too expensive to move. But the renters being forced to the market by rent increases aren't finding cheaper places so they're paying higher rents. Presumably any new construction is going to be in the cartel.
klipt 3y ago
Yeah I think the idea is that without the algorithm, a landlord is more likely to game theoretically "defect" and advertise lower rent to fill a vacancy, but the algorithm discourages that in favor of cooperation/collusion.
LeafItAlone 3y ago
> "warehouse-ing" empty units Yes. I live in a building managed by one of the named defendants. I regularly check the available units page to see what is available (because I want to move into a bigger unit, but only specific ones). I've seen some units on the page for a long time, then get taken off, then put back on again a few weeks later. My building explicitly does not do any short term rentals, including corporate (I don't know about military, but none of them are furnished, so I doubt it). Some units in particular I have tracked to be available for over a year, with practically only price increases. They (and all other available units) do drop by 10s of dollars/month on a somewhat cyclical basis, which seems like it coincides with availability boundaries so that apartments don't all become rented and available all at the same time.

wolverine876 3y ago

Does anyone here know or develop RealPage Revenue Management software and want to comment on it? Edit: In business, I try to do something productive for others and earn a return on that. Our business culture seems to have taken our worst instincts and made them religion: Squeeze every drop of blood out of everyone. What is RealPage producing for our society?

anon373839 3y ago
> I try to do something productive for others and earn a return on that. This is how to achieve satisfaction with your work. Unless you’re sociopathic, knowing that your work takes advantage of others causes cognitive dissonance.
- gonzo41 3y ago
  There's plenty of FB developers floating about here. That platform has had a pretty big impact on place like Myanmar. and everyone seems to just ignore that fact.
  - danuker 3y ago
    Maybe they're not ignoring it. They're just not attracting attention to the fact that they're pushing down the price of supremacy on human attention.
  - enjo 3y ago
    I mean it’s had an enormously negative effect on the planet in general. Democracy in the states is on the brink mostly because of Facebook and Twitter.
toast0 3y ago
Anyone working there should keep themselves out of comment sections while they and/or their customers are embroiled in lawsuits, so I'd imagine you won't get a response from them. Devil's advocate: if you believe high density living is important/required to reduce society's environmental footprint, someone needs to build it, and someone needs to operate it. Helping people who operate high density residential charge more for it, makes it more desirable to operate, and therefore increases demand for construction of high density living spaces. Thus, helping society move towards higher density living and saving the environment.

8jkdsa8h4ebjvxz 3y ago

sad world

alephnerd 3y ago

This is smart that there is an attempt in the DC Superior Court as well. There are a couple other lawsuits against Realpage with a similar premise as we speak at the United States District Court for the District of Columbia, United States District Court for the Middle District of Tennessee, and the United States District Court for the Southern District of California. I think the federal district lawsuits were all merged and moved to United States District Court for the Middle District of Tennessee a couple days ago, so a number of state level litigations will be a good backup. Essentially, it looks like there is a coordinated attempt to define algorithmic antitrust at the Supreme Court level. If the DC Superior Court and the Federal Court have a conflicting interpretation, this needs to be reconciled and seems like the type of case that would end up in the Supreme Court. This has massive implications for AdTech, FinTech, and multiple other industries, probably way more impactful than the Google FTC suit. Edit: My Interpretation from my comment below If a subset of companies use the exact same algorithm for price discovery, is there a form of price-fixing? This is the key question being argued. If the courts rule against Realpage, then any form of algorithmic price discovery en-masse could be found to be anti-competitive. This might mean you can't use TheTradeDesk and Google Adsense en-masse for example. Basically, as of today, a lot of price discovery is now automated by a majority of companies using a handful of vendors for this. Lawyers of HN (looking at your raynier) please hold me accountable for my explanation.

danielfoster 3y ago
It will be interesting to see how this argued. I personally am not sure such a complex evaluation of the algorithm is needed. If everyone agrees to tell Frank what they charge with the understanding Frank will use this data to tell you what to charge, that’s collusion.
- alephnerd 3y ago
  You don't need to evaluate the algorithm. If a subset of companies use the exact same algorithm for price discovery, is there a form of price-fixing? This is the key question being argued. If the courts rule against Realpage, then any form of algorithmic price discovery en-masse could be found to be anti-competitive. This might mean you can't use TheTradeDesk and Google Adsense en-masse for example. Basically, as of today, a lot of price discovery is now automated by a majority of companies using a handful of vendors for this.

wolverine876 3y ago

RealPage is an aggressive, powerful organization, the lawsuit alledges: > RealPage's software has set the rent at more than 30% of apartments in multifamily buildings in D.C. and 60% of units in large multifamily buildings, per the lawsuit. The percentages are even higher for the broader D.C. metro area. > The software company actively "polices" landlords to ensure that they comply with the rent cost it generates, the lawsuit alleges. Failure to impose the RealPage rents could lead to landlords being expelled from the organization, according to the suit. And nationwide: > There were 49.5 million rental units in the U.S. as of 2022, according to data from the U.S. Department of Housing and Urban Development. > RealPage in 2020 said its software served 19.7 million rental units of all types in the U.S. — more than a third of all rental units nationwide.

sklargh 3y ago

This reminds me a lot of the Airline Tariff Publishing Company case in the 90s. Airlines used an industry marketplace to price fix and were successfully enjoined from doing so. I would not be surprised if in many industries similar behavior hides behind an algorithmic veneer. Judgement here: https://www.justice.gov/atr/final-judgment-us-v-airline-tariff-publishing-company-et-al https://www.justice.gov/atr/final-judgment-us-v-airline-tari...

alephnerd 3y ago
> would not be surprised if in many industries similar behavior hides behind an algorithmic veneer. This is the Billion Dollar Question about the Realpage suit, and why I kind of dislike Lina Khan. She could have directly attacked this question which is much more fundamental, instead of the business incorporation question she described in her seminal Amazon paper. Algorithmic price-fixing is a much more fundamental question than bigtech populism with extra steps. It would also give the hammer needed to hold companies like Amazon or Google accountable if they were anticompetitive.
- enjo 3y ago
  She could but courts aren’t going to hear it. They almost always make decisions on the narrowest criteria and this case (and others like it) are about old fashioned collusion. The fact that participation in Real Page requires you to use their pricing is the thing that will decide this case. The algorithm won’t really be at issue at all.

local_crmdgeon 3y ago

Game theory makes this very unlikely, but we'll see if they have a strong case.

CPLX 3y ago
What do you mean "makes this very unlikely" they're literally doing it, there's mountains of evidence that it's actually happening. They haven't really been trying to hide it the only real argument is if you somehow get a pass on a charge of colluding if a software platform is involved.
- constantly 3y ago
  Two economists walking, spotted a $100 bill on the ground, and did not pick it up under the reasoning that if there were really $100 on the ground, someone else would have picked it up already.
acdha 3y ago
That’s a strong claim: can you expand your reasoning and provide some data? They provide a lot in the case so I’d expect some specific examples of why you don’t agree with their claims.

qwertyuiop_ 3y ago

It’s just not DC. Boston and Metro west of Boston, Burlington, Waltham Framingham, Natick are flooded with properties owned by Greystar, Equity Residential and Avalon. The rents rise to the cents in sync. If there are a tort lawyers out there this is great opportunity if you put in some time. They are inflated atleast 100-150% of a reasonable market rate.

wolverine876 3y ago
From the OP: > There were 49.5 million rental units in the U.S. as of 2022, according to data from the U.S. Department of Housing and Urban Development. > RealPage in 2020 said its software served 19.7 million rental units of all types in the U.S. — more than a third of all rental units nationwide.

bcrl 3y ago

The Behind the Bastards podcast on this issue was quite enlightening. I do wonder if the podcast was part of the reason why this lawsuit happened. You can find part 1 over here: https://podcasts.apple.com/us/podcast/part-one-why-is-the-rent-so-damn-high/id1373812661?i=1000585476273 https://podcasts.apple.com/us/podcast/part-one-why-is-the-re...

deleted 3y ago

[deleted]

Psychoshy_bc1q 3y ago

Rentseekers are the worst type of people.