10 ms·

Justice Dept Says Collusion Suit Against Apartment Owners Should Move Forward

289 points by tempsy 3y ago

IronWolve 3y ago
Raising prices is legal, but each rental company has to be independent. The rental companies broke the law by using a 3rd party company to collude to raise prices.
- Deprecate9151 3y ago
  The lawsuit accuses RealPages of not just being used for the collusion, but actually orchestrating the collusion. It claims RealPages went to the point of attempting to coordinate lease start/end timing across landlords to prevent oversupply, and having daily pricing calls with their customers where they pressure them not to deviate from the algorithmic suggested price. That's in addition to using non-public rental and pricing data from its customers to calculate the algorithmic price in the first place.
  - sklargh 3y ago
    Yeah this is the crux.
mtrees_io 3y ago
[flagged]
jonahbenton 3y ago
Curious to see how this plays out. Large property owners in the US are the primordial lobby. Law exists for the purpose of defending private property. Private property exists for the purpose of making money. The government exists to operate the law and defend these purposes. These dynamics are the origin story of the revolution. How far DoJ is allowed to go in biting the hand that allowed it to be created will be interesting. Of course this sort of collusive behavior long predates software, it is called "the invisible hand" of the market. So precisely what guardrails around this behavior will be established?
- mistrial9 3y ago
  Mary and Joseph were without a place to sleep .. rent is a lot older than that version of things.
  - meepmorp 3y ago
    that's more not being able to find a hotel room than not being able to afford rent, though
    - theGeatZhopa 3y ago
      So, hotel is a lot older than rent. But, what has been there first? Without rent no hotel room and without hotel no need for rent.. hm. I have to think about it.
- zeusk 3y ago
  > How far DoJ is allowed to go in biting the hand that allowed it to be created will be interesting. Interesting how in your own head you are. Maybe DoJ needs to show the government and law are for all - not just "landlords".
  - jonahbenton 3y ago
    A little tongue in cheek. But only a little. In the reality most of us share, real estate is extremely powerful. Many tech people don't understand this.
    - objektif 3y ago
      So just let them break the law?
- xapata 3y ago
  "Primordial" and "US" don't really go together. The USA is only ~250 years old.
sklargh 3y ago
Resembles a modern form of a 1994 case in which the Justice Department successfully went after airlines for using a marketplace to collude. I’d actually argue some of RealPage’s requirements and design choices may have been created to help evade some of the similarities to the case by taking agency away from management. https://www.justice.gov/archive/atr/public/press_releases/1994/211786.htm https://www.justice.gov/archive/atr/public/press_releases/19...
- soperj 3y ago
  If i remember correctly, it was some of the same people who are involved in both cases.
  - elzbardico 3y ago
    Well, the State should probably have give them more stern punishment the first time, because it is clear that they learned that the crime pays.
- lozenge 3y ago
  "RealPage has undertaken this conduct with full and complete knowledge of its illegality. One of RealPage’s pricing software’s main architects, Jeffery Roper, is acutely familiar with the anticompetitive nature of coordinated algorithmic pricing within an industry. Before pioneering RealPage’s software, Roper was Alaska Airlines’ Director of Revenue Management when it and other airlines began using common software to share nonpublic planned routes and prices with each other, with the aim of heading off price wars. The Department of Justice’s Antitrust Division (“DOJ”) reached settlements or consent decrees for price fixing violations with eight airlines, including Alaska Airlines. Roper—who had his computer and documents seized by federal agents—relayed about that experience that, “We all got called up before the Department of Justice in the early 1980s because we were colluding.” He adds that at the time, “We had no idea” that conduct was unlawful. Having now brought analogous coordinated algorithmic pricing to multifamily residential real estate leasing after the DOJ’s airline settlements, however, Roper can no longer claim ignorance of the unlawful nature of this conduct" Case 3:22-cv-01611-WQH-MDD Document 1 Filed 10/18/22 PageID.17 Page 17 of 26
huitzitziltzin 3y ago
So, I view this case as likely unsettled under current US antitrust law. The underlying behavior seems really objectionable and should be illegal. The question is whether it is actually illegal under the law. If a bunch of firms use the same software to set prices but do so independently and without any attempt to coordinate with each other… that’s a pretty decent defense? (Can they argue that they had no knowledge of their competitors’ use of the software? There may of course be internal emails saying “we know X is also using it.” Suppose there aren’t AND the software vendor promised exclusivity to all of them independently. Would we want this to be illegal? What if all of the firms offer similar products and set prices by estimating the same demand curve?? This becomes a little far fetched of course.) I don’t view this as obviously “per se illegal” territory. I would love to be wrong bc yeah it’s really objectionable, but I don’t think the case is a slam dunk. So called “algorithmic collusion” of which this is likely an example is an unsettled area of theory
- ethanbond 3y ago
  They did coordinate: the software had a policy that you had to take their recommendation at least n% of the time (I think 80?) Edit: Per discussion below, it was merely strongly encouraged and effectively followed (in practice) to take the recommendation at least 80% of the time... in order to raise prices together...
  - bombcar 3y ago
    This might end up being the lynchpin - the software sounds like a textbook cartel.
    - mcmoor 3y ago
      This fact either make it 100% a cartel or is actually false and keep being repeated on HN for some reason.
  - s1artibartfast 3y ago
    I don't think that is true from reading the complaint - there wasnt any mandatory requirement, but guidelines on how to use the algorithm.
deleted 3y ago
[deleted]
RayVR 3y ago
My own experience with this: I don't know whether it was RealPage being used, but when I was leaving my apartment outside of D.C., I wanted to extend my lease by 3 months, into December. A very normal occurrence. I went to the leasing office and asked to extend. We sat down and they typed some info into the computer. They said I could get the lease extension for 50% more than my current rate per month. This seemed ludicrous so I asked why it was so expensive. They calmly explained about the new software they were using which set the rates for all new leases, which they were not authorized to override. They said the increased cost was due to the very large new building which went up a couple blocks away. Not owned by the same company. The building had been completed around December the year before. Many tenants were expected to be leaving around that time when their 1-year lease was up. I couldn't believe this could be legal and asked the agent how this was legal to collude with another building. He said it sure seemed odd but all of the buildings in this city had just started using this software. This was just some guy working in a leasing office but he claimed it was because the boom in high-rise apartments in the city had created too much competition and the owners had all agreed to use this software to fix that. Eventually, after some back-and-forth, I learned that changing my lease end date by a couple days reduced the rent increase from 50% to 5%. So I ended up with a 3 month and 6 day extension.
- Sebguer 3y ago
  I got a renewal notice a few months ago, and they wanted to raise my already pretty high rent by like 15%. It was higher than what they charge for brand new apartments, not even counting leasing incentives. I made a counter-offer and got told 'we don't negotiate'. The propublica article (https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r...) talks about how exactly this lack of negotiation / removing the human element lets them drive up rents across the board. It's insane, and toxic.
  - thelastgallon 3y ago
    Experienced the same system in the Bay Area. Rent increases by 300 - 500, but the new lease is lower. You can try signing a lease on a new apartment and deal with the logistics of moving, having some period of extension/overlapping rent payment, which is a huge hassle and may not even save you money.
iaw 3y ago
Does this mean that if a company uses a third-party to help it determine wages it's colluding?
- deleted 3y ago
  [deleted]
- MobiusHorizons 3y ago
  I can certainly see ways a third party company could help allow companies to engage in anticompetitive behavior. IANAL, but I expect proof of anticompetitive behavior resulting in harm to workers would need to be demonstrated. For instance if the third party software used previous pay data from a different employer (not disclosed by the applicant) to keep a salary below market rate.
- eek2121 3y ago
  Depends on the specific scenario.
- Exoristos 3y ago
  It means if a company were to use a third party to collude on wages, it's colluding.
- s3p 3y ago
  No. The third party is the one colluding in your example, assuming the facts there are the same here: one software vendor, all the companies in a city are using it, software is driving wages in a direction profitable for companies and worse for employees of said company.
cpncrunch 3y ago
Paywalled, and not possible to view on archive.is.
autoexec 3y ago
If they are found guilty will renters be getting massive checks from the rental companies that have been ripping them off? Will rental prices drop by huge percentages? If those things don't happen where exactly is the justice?
- user3939382 3y ago
  The justice is the part where the lawyers trying the case get to buy new homes in Martha's Vineyard.
- genocidicbunny 3y ago
  I know it's a fantasy, but in my ideal scenario, anyone that was involved with the creation, perpetuation or use of the software should be forced to disgorge all revenues accrued while the software was in use, including full refunds to tenants that were affected by use of that software. Also, personal liability for the leaders/managers of the company, so they can't just dissolve and slink off to do this shit again.
zer0x4d 3y ago
My own experience: I live in LA and know that almost every 100 unit+ building within a few blocks uses RealPage. I know it because I had to apply to them through it. The software has completely ruined the market here and every leasing agent pretty much says "I have no control over this, if you see a lower price apply to lock it in but other than that the algorithm sets all the pricing. I can't modify it." It is very obvious that all these buildings are colluding with each other to price their leases. It's pretty much a simple positive feedback loop of increases. Since everyone is raising their prices, the consumer has no choice but to pay the high price. Even smaller buildings who don't use this software, look at the prices set by it and use it to set their own pricing. I think the conduct is egregious and clearly illegal. If this was one building using it, it wouldn't be. But when almost every building uses it, it clearly creates a monopolistic market
- objektif 3y ago
  Exact same experience here. And we are hurting.
58028641 3y ago
Criminal penalties for the landlords and at least triple refunds issued to affected tenants. Also build so many new apartments that the prices fall since landlords are forced to compete to find tenants.
- rcpt 3y ago
  Land Value Tax until all parcels are free
exabrial 3y ago
Please sue the ever living crap out of the company and let's make sure Apartment Owners feel the heat for willingly participating. We're in a country wide housing crisis that has is having downstream effects into the environment, access to healthcare, GDP, jobs, and investment.
- objektif 3y ago
  This is one of few cases where I would support taking out the guillotines from the storage.
  - exabrial 3y ago
    meh. Violence only in response to violence. However, profiteering after making sure people do not have a choice calls for 100% of your profits removed.
heroprotagonist 3y ago
Here's the other popular and illegal apartment building inflation practice that doesn't require software: * Make very stiff penalties for accepting anything besides a 12 month lease, EXCEPT when the renewal date falls outside of a designated 2 month period. * Set this 2 month period to coincide or overlap with the same renewal period every other major player in your housing market uses. * For any lease renewing outside that 2 month period, change up the optimum price point you offered to be a slightly shorter or longer lease period. This will shift tenants into the desired renewal period within a few years and you'll benefit even if they switch buildings in the long run, as long as most other buildings are doing this too. * Add very strong penalties for lease-breaking, including such tactics as charging as much as 135% of the monthly rate for every month remaining on the lease. Unless they re-rent the building, and then the fee is 135% - whatever they get for rent for that period (hint: want a cheap apartment for your employees? Use the lease breaker apartment and charge them the difference!) * Add the same 135% increase for the post-lease month-to-month period to force any renewals to make their decision quickly during that renewal period. Get enough major players to do the same in the same area, and you have: * Artificially increased demand during that designated 2 month period when everyone in the area renews. * Artificially constricted supply during the same period, as renters won't release their current place until they've found a new one. * Ensured that any newcomers to the area will get locked into the same renewal cycle within a few years at the most. Even if they leave your complex, as long as you've shifted their renewal cycle you will benefit in the long term. There's one less apartment available for rent and one more apartment seeker looking for a place during the same period that most others are looking. This is one of the major causes of housing inflation. Also, homelessness as people get priced out of the housing market. A lot of other things go into the reasons we're seeing 5-10%+/year rent increases when the population only increases 0.5%. Way too many of them come down to exploitative wealth extraction by multistate or multinational corporations. This wealth does NOT flow back into your community.
- heroprotagonist 3y ago
  We can generate a rough distribution estimate of this behavior pretty quickly.. If you start at an EVEN distribution of renewal dates right now (it's unlikely but for argument): After 1 year: 33% renewing in the same 2-month period After 2 years: 50% After 3 years: 66% After 4 years: 83% After 5 years: 99% The actual distribution is going to be less than that 99% due to a lot of other factors. Such as only 80% of the leases following this same practice, and move-in/move-out pressure in an area. But the impact of this behavior will still be seen. This practice is price fixing. quick code: import pandas as pd import numpy as np # Initial distribution: 1000 leases evenly distributed across 12 months initial_leases = 1000 // 12 months = ["Jan", "Feb", "Mar", "Apr", "May", "Jun", "Jul", "Aug", "Sep", "Oct", "Nov", "Dec"] # Initialize a DataFrame to track the distribution over 6 years distribution = pd.DataFrame(0, index=np.arange(6), columns=months) distribution.loc[0] = initial_leases # Set initial distribution # Function to update the distribution for a given year def update_distribution(year): for month in months: if month in ["May", "Jun"]: # 12-month renewal distribution.loc[year, month] = distribution.loc[year - 1, month] else: # 10-month renewal # Calculate new expiration month (10 months later) new_month_index = (months.index(month) + 10) % 12 new_month = months[new_month_index] distribution.loc[year, new_month] += distribution.loc[year - 1, month] # Update the distribution for each year for year in range(1, 6): update_distribution(year) # Displaying the distribution distribution.T # Transpose for a better view
wolverine876 3y ago
A major stumbling block might be (IANAL), what viable cases are there? * The software company won't have nearly enough money to be a viable defendant. * Each victim won't have lost enough to sue by themself, unless the violation allows a large multiple of damages. Their harm is (guessing) 15% of rent or a year. Even a $2.5K/month apartment doesn't add up to enough to pay a lawyer. Can a class action combine such a wide variety of plaintiffs and wide variety of defendants? Could it be nationwide or state by state?
- nerdponx 3y ago
  > The software company won't have nearly enough money to be a viable defendant. Corporate death penalty seems warranted, both to end the behavior and to send a stern warning to anyone else who might try it again. Victims (read: millions of renters) will never be made whole, but at least you stop more people from being victimized.
mycologos 3y ago
I know, I know, it's possible to condemn and work against multiple problems at once, but it's just weird to me that there's so much more antitrust energy expended on free internet search that is very easy to not use than what looks like a pretty obvious price-fixing cartel that directly harms consumers.
Nifty3929 3y ago
Time to build (or allow others to build) some competitive housing to drive the price down.
arb-spreads 3y ago
Not really sure why people complain so excessively about dynamic pricing software. Whether for flights, concerts, or apartments - sellers will naturally seek to maximize profits. Software helps with this. Housing and apartments are in many senses artificially expensive. Existing laws and regulations make it very difficult to build, appreciating the value of land and buildings. If people want lower rents - making it far easier to build is one of the best solutions.

289 points by tempsy 3y ago

Raising prices is legal, but each rental company has to be independent. The rental companies broke the law by using a 3rd party company to collude to raise prices.

Deprecate9151 3y ago
The lawsuit accuses RealPages of not just being used for the collusion, but actually orchestrating the collusion. It claims RealPages went to the point of attempting to coordinate lease start/end timing across landlords to prevent oversupply, and having daily pricing calls with their customers where they pressure them not to deviate from the algorithmic suggested price. That's in addition to using non-public rental and pricing data from its customers to calculate the algorithmic price in the first place.
- sklargh 3y ago
  Yeah this is the crux.

mtrees_io 3y ago

[flagged]

jonahbenton 3y ago

Curious to see how this plays out. Large property owners in the US are the primordial lobby. Law exists for the purpose of defending private property. Private property exists for the purpose of making money. The government exists to operate the law and defend these purposes. These dynamics are the origin story of the revolution. How far DoJ is allowed to go in biting the hand that allowed it to be created will be interesting. Of course this sort of collusive behavior long predates software, it is called "the invisible hand" of the market. So precisely what guardrails around this behavior will be established?

mistrial9 3y ago
Mary and Joseph were without a place to sleep .. rent is a lot older than that version of things.
- meepmorp 3y ago
  that's more not being able to find a hotel room than not being able to afford rent, though
  - theGeatZhopa 3y ago
    So, hotel is a lot older than rent. But, what has been there first? Without rent no hotel room and without hotel no need for rent.. hm. I have to think about it.
zeusk 3y ago
> How far DoJ is allowed to go in biting the hand that allowed it to be created will be interesting. Interesting how in your own head you are. Maybe DoJ needs to show the government and law are for all - not just "landlords".
- jonahbenton 3y ago
  A little tongue in cheek. But only a little. In the reality most of us share, real estate is extremely powerful. Many tech people don't understand this.
  - objektif 3y ago
    So just let them break the law?
xapata 3y ago
"Primordial" and "US" don't really go together. The USA is only ~250 years old.

sklargh 3y ago

Resembles a modern form of a 1994 case in which the Justice Department successfully went after airlines for using a marketplace to collude. I’d actually argue some of RealPage’s requirements and design choices may have been created to help evade some of the similarities to the case by taking agency away from management. https://www.justice.gov/archive/atr/public/press_releases/1994/211786.htm https://www.justice.gov/archive/atr/public/press_releases/19...

soperj 3y ago
If i remember correctly, it was some of the same people who are involved in both cases.
- elzbardico 3y ago
  Well, the State should probably have give them more stern punishment the first time, because it is clear that they learned that the crime pays.
lozenge 3y ago
"RealPage has undertaken this conduct with full and complete knowledge of its illegality. One of RealPage’s pricing software’s main architects, Jeffery Roper, is acutely familiar with the anticompetitive nature of coordinated algorithmic pricing within an industry. Before pioneering RealPage’s software, Roper was Alaska Airlines’ Director of Revenue Management when it and other airlines began using common software to share nonpublic planned routes and prices with each other, with the aim of heading off price wars. The Department of Justice’s Antitrust Division (“DOJ”) reached settlements or consent decrees for price fixing violations with eight airlines, including Alaska Airlines. Roper—who had his computer and documents seized by federal agents—relayed about that experience that, “We all got called up before the Department of Justice in the early 1980s because we were colluding.” He adds that at the time, “We had no idea” that conduct was unlawful. Having now brought analogous coordinated algorithmic pricing to multifamily residential real estate leasing after the DOJ’s airline settlements, however, Roper can no longer claim ignorance of the unlawful nature of this conduct" Case 3:22-cv-01611-WQH-MDD Document 1 Filed 10/18/22 PageID.17 Page 17 of 26

huitzitziltzin 3y ago

So, I view this case as likely unsettled under current US antitrust law. The underlying behavior seems really objectionable and should be illegal. The question is whether it is actually illegal under the law. If a bunch of firms use the same software to set prices but do so independently and without any attempt to coordinate with each other… that’s a pretty decent defense? (Can they argue that they had no knowledge of their competitors’ use of the software? There may of course be internal emails saying “we know X is also using it.” Suppose there aren’t AND the software vendor promised exclusivity to all of them independently. Would we want this to be illegal? What if all of the firms offer similar products and set prices by estimating the same demand curve?? This becomes a little far fetched of course.) I don’t view this as obviously “per se illegal” territory. I would love to be wrong bc yeah it’s really objectionable, but I don’t think the case is a slam dunk. So called “algorithmic collusion” of which this is likely an example is an unsettled area of theory

ethanbond 3y ago
They did coordinate: the software had a policy that you had to take their recommendation at least n% of the time (I think 80?) Edit: Per discussion below, it was merely strongly encouraged and effectively followed (in practice) to take the recommendation at least 80% of the time... in order to raise prices together...
- bombcar 3y ago
  This might end up being the lynchpin - the software sounds like a textbook cartel.
  - mcmoor 3y ago
    This fact either make it 100% a cartel or is actually false and keep being repeated on HN for some reason.
- s1artibartfast 3y ago
  I don't think that is true from reading the complaint - there wasnt any mandatory requirement, but guidelines on how to use the algorithm.

deleted 3y ago

[deleted]

RayVR 3y ago

My own experience with this: I don't know whether it was RealPage being used, but when I was leaving my apartment outside of D.C., I wanted to extend my lease by 3 months, into December. A very normal occurrence. I went to the leasing office and asked to extend. We sat down and they typed some info into the computer. They said I could get the lease extension for 50% more than my current rate per month. This seemed ludicrous so I asked why it was so expensive. They calmly explained about the new software they were using which set the rates for all new leases, which they were not authorized to override. They said the increased cost was due to the very large new building which went up a couple blocks away. Not owned by the same company. The building had been completed around December the year before. Many tenants were expected to be leaving around that time when their 1-year lease was up. I couldn't believe this could be legal and asked the agent how this was legal to collude with another building. He said it sure seemed odd but all of the buildings in this city had just started using this software. This was just some guy working in a leasing office but he claimed it was because the boom in high-rise apartments in the city had created too much competition and the owners had all agreed to use this software to fix that. Eventually, after some back-and-forth, I learned that changing my lease end date by a couple days reduced the rent increase from 50% to 5%. So I ended up with a 3 month and 6 day extension.

Sebguer 3y ago
I got a renewal notice a few months ago, and they wanted to raise my already pretty high rent by like 15%. It was higher than what they charge for brand new apartments, not even counting leasing incentives. I made a counter-offer and got told 'we don't negotiate'. The propublica article (https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r...) talks about how exactly this lack of negotiation / removing the human element lets them drive up rents across the board. It's insane, and toxic.
- thelastgallon 3y ago
  Experienced the same system in the Bay Area. Rent increases by 300 - 500, but the new lease is lower. You can try signing a lease on a new apartment and deal with the logistics of moving, having some period of extension/overlapping rent payment, which is a huge hassle and may not even save you money.

iaw 3y ago

Does this mean that if a company uses a third-party to help it determine wages it's colluding?

deleted 3y ago
[deleted]
MobiusHorizons 3y ago
I can certainly see ways a third party company could help allow companies to engage in anticompetitive behavior. IANAL, but I expect proof of anticompetitive behavior resulting in harm to workers would need to be demonstrated. For instance if the third party software used previous pay data from a different employer (not disclosed by the applicant) to keep a salary below market rate.
eek2121 3y ago
Depends on the specific scenario.
Exoristos 3y ago
It means if a company were to use a third party to collude on wages, it's colluding.
s3p 3y ago
No. The third party is the one colluding in your example, assuming the facts there are the same here: one software vendor, all the companies in a city are using it, software is driving wages in a direction profitable for companies and worse for employees of said company.

cpncrunch 3y ago

Paywalled, and not possible to view on archive.is.

autoexec 3y ago

If they are found guilty will renters be getting massive checks from the rental companies that have been ripping them off? Will rental prices drop by huge percentages? If those things don't happen where exactly is the justice?

user3939382 3y ago
The justice is the part where the lawyers trying the case get to buy new homes in Martha's Vineyard.
genocidicbunny 3y ago
I know it's a fantasy, but in my ideal scenario, anyone that was involved with the creation, perpetuation or use of the software should be forced to disgorge all revenues accrued while the software was in use, including full refunds to tenants that were affected by use of that software. Also, personal liability for the leaders/managers of the company, so they can't just dissolve and slink off to do this shit again.

zer0x4d 3y ago

My own experience: I live in LA and know that almost every 100 unit+ building within a few blocks uses RealPage. I know it because I had to apply to them through it. The software has completely ruined the market here and every leasing agent pretty much says "I have no control over this, if you see a lower price apply to lock it in but other than that the algorithm sets all the pricing. I can't modify it." It is very obvious that all these buildings are colluding with each other to price their leases. It's pretty much a simple positive feedback loop of increases. Since everyone is raising their prices, the consumer has no choice but to pay the high price. Even smaller buildings who don't use this software, look at the prices set by it and use it to set their own pricing. I think the conduct is egregious and clearly illegal. If this was one building using it, it wouldn't be. But when almost every building uses it, it clearly creates a monopolistic market

objektif 3y ago
Exact same experience here. And we are hurting.

58028641 3y ago

Criminal penalties for the landlords and at least triple refunds issued to affected tenants. Also build so many new apartments that the prices fall since landlords are forced to compete to find tenants.

rcpt 3y ago
Land Value Tax until all parcels are free

exabrial 3y ago

Please sue the ever living crap out of the company and let's make sure Apartment Owners feel the heat for willingly participating. We're in a country wide housing crisis that has is having downstream effects into the environment, access to healthcare, GDP, jobs, and investment.

objektif 3y ago
This is one of few cases where I would support taking out the guillotines from the storage.
- exabrial 3y ago
  meh. Violence only in response to violence. However, profiteering after making sure people do not have a choice calls for 100% of your profits removed.

heroprotagonist 3y ago

Here's the other popular and illegal apartment building inflation practice that doesn't require software: * Make very stiff penalties for accepting anything besides a 12 month lease, EXCEPT when the renewal date falls outside of a designated 2 month period. * Set this 2 month period to coincide or overlap with the same renewal period every other major player in your housing market uses. * For any lease renewing outside that 2 month period, change up the optimum price point you offered to be a slightly shorter or longer lease period. This will shift tenants into the desired renewal period within a few years and you'll benefit even if they switch buildings in the long run, as long as most other buildings are doing this too. * Add very strong penalties for lease-breaking, including such tactics as charging as much as 135% of the monthly rate for every month remaining on the lease. Unless they re-rent the building, and then the fee is 135% - whatever they get for rent for that period (hint: want a cheap apartment for your employees? Use the lease breaker apartment and charge them the difference!) * Add the same 135% increase for the post-lease month-to-month period to force any renewals to make their decision quickly during that renewal period. Get enough major players to do the same in the same area, and you have: * Artificially increased demand during that designated 2 month period when everyone in the area renews. * Artificially constricted supply during the same period, as renters won't release their current place until they've found a new one. * Ensured that any newcomers to the area will get locked into the same renewal cycle within a few years at the most. Even if they leave your complex, as long as you've shifted their renewal cycle you will benefit in the long term. There's one less apartment available for rent and one more apartment seeker looking for a place during the same period that most others are looking. This is one of the major causes of housing inflation. Also, homelessness as people get priced out of the housing market. A lot of other things go into the reasons we're seeing 5-10%+/year rent increases when the population only increases 0.5%. Way too many of them come down to exploitative wealth extraction by multistate or multinational corporations. This wealth does NOT flow back into your community.

heroprotagonist 3y ago
We can generate a rough distribution estimate of this behavior pretty quickly.. If you start at an EVEN distribution of renewal dates right now (it's unlikely but for argument): After 1 year: 33% renewing in the same 2-month period After 2 years: 50% After 3 years: 66% After 4 years: 83% After 5 years: 99% The actual distribution is going to be less than that 99% due to a lot of other factors. Such as only 80% of the leases following this same practice, and move-in/move-out pressure in an area. But the impact of this behavior will still be seen. This practice is price fixing. quick code: import pandas as pd import numpy as np # Initial distribution: 1000 leases evenly distributed across 12 months initial_leases = 1000 // 12 months = ["Jan", "Feb", "Mar", "Apr", "May", "Jun", "Jul", "Aug", "Sep", "Oct", "Nov", "Dec"] # Initialize a DataFrame to track the distribution over 6 years distribution = pd.DataFrame(0, index=np.arange(6), columns=months) distribution.loc[0] = initial_leases # Set initial distribution # Function to update the distribution for a given year def update_distribution(year): for month in months: if month in ["May", "Jun"]: # 12-month renewal distribution.loc[year, month] = distribution.loc[year - 1, month] else: # 10-month renewal # Calculate new expiration month (10 months later) new_month_index = (months.index(month) + 10) % 12 new_month = months[new_month_index] distribution.loc[year, new_month] += distribution.loc[year - 1, month] # Update the distribution for each year for year in range(1, 6): update_distribution(year) # Displaying the distribution distribution.T # Transpose for a better view

wolverine876 3y ago

A major stumbling block might be (IANAL), what viable cases are there? * The software company won't have nearly enough money to be a viable defendant. * Each victim won't have lost enough to sue by themself, unless the violation allows a large multiple of damages. Their harm is (guessing) 15% of rent or a year. Even a $2.5K/month apartment doesn't add up to enough to pay a lawyer. Can a class action combine such a wide variety of plaintiffs and wide variety of defendants? Could it be nationwide or state by state?

nerdponx 3y ago
> The software company won't have nearly enough money to be a viable defendant. Corporate death penalty seems warranted, both to end the behavior and to send a stern warning to anyone else who might try it again. Victims (read: millions of renters) will never be made whole, but at least you stop more people from being victimized.

mycologos 3y ago

I know, I know, it's possible to condemn and work against multiple problems at once, but it's just weird to me that there's so much more antitrust energy expended on free internet search that is very easy to not use than what looks like a pretty obvious price-fixing cartel that directly harms consumers.

Nifty3929 3y ago

Time to build (or allow others to build) some competitive housing to drive the price down.

arb-spreads 3y ago

Not really sure why people complain so excessively about dynamic pricing software. Whether for flights, concerts, or apartments - sellers will naturally seek to maximize profits. Software helps with this. Housing and apartments are in many senses artificially expensive. Existing laws and regulations make it very difficult to build, appreciating the value of land and buildings. If people want lower rents - making it far easier to build is one of the best solutions.