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> efficient way to discover true market rate and there is no damage by using it. The algorithms are optimizing price instead of vacancy. I don't think we can a
by rapind 3y ago
> efficient way to discover true market rate and there is no damage by using it.
The algorithms are optimizing price instead of vacancy. I don't think we can assume these are one and the same (price and vacancy) because there are ongoing cost differences between vacant and occupied property.
As an extremely unlikely scenario, what if the algorithm determines it's optimal to rent only 20% of your listings to scarcity whales at 4 times the price leaving 80% vacant due to maintenance costs and other factors? From a market perspective, that's absolutely fine, but from a society perspective it's pretty horrible.
- chii 3y ago> From a market perspective, that's absolutely fine, but from a society perspective it's pretty horrible. which is where vacancy penalty should be imposed by the gov't to prevent this undesired behaviour - if the constituents vote for such measures of course.
- zajio1am 3y agoThat is what i address in the second paragraph: if vacancy rate is higher than would be expected, then one could argue price discovery algorithms caused price fixing of above-market rate.