13 ms·

Rents are soaring. Is RealPage to blame?

IronWolve 3y ago
Yes, its just price fixing, bypassing laws by using 3rd party tools. And with no increase in supply and the increase of people needing housing, the prices can go only go higher. Infrastructure designed for populations 30-50 years ago, city planning didn't foresee the need for the public transportation and housing needs for these mega cities. And then the increase in local taxes to try to compensate for the mass costs, and hurting the current tax base, is a major issue. Top if off with the increasing inflation and interest rates which is also compounding the situation.
- jimbob45 3y ago
  Price fixing and no penalty for leaving units vacant.
  - natoliniak 3y ago
    question: how can a municipality determine if a unit is vacant?
- blakesterz 3y ago
  > And then the increase in local taxes to try to compensate for the mass costs I don't know if it's like this everywhere, but our local taxes have gone up by a big percentage over the past several years. They say they haven't raised our taxes, but since valuations go up, our taxes go up... by thousands of dollars.
  - IncreasePosts 3y ago
    If valuations are up across the board, and the revenue requirements remain fixed, then your mill levy should be lower and your tax burden should be the same as the past. It should be pretty clear that your municipality is collecting more taxes than they were previously from published reports. If they aren't, then that means your property valuation has gone up more than others in your region...that should be considered a good thing, even if you have a slightly higher tax burden because of it.
    - jeffbee 3y ago
      In what conceivable reality could housing costs go up across the board but municipal revenues remain flat? Municipal employees need a place to sleep, so housing costs lead directly to new revenue needs.
      - IncreasePosts 3y ago
        If municipal revenue doesn't remain flat, then you can't say taxes haven't gone up.
  - nradov 3y ago
    This was the main reason behind California's Proposition 13 in 1978. At the time, homeowners were seeing their taxes go up and up every year just based on valuation increases. Meanwhile their incomes weren't necessarily increasing at the same rate. Prop 13 has had some negative effects but the anger by voters at the time is entirely understandable.
    - asdff 3y ago
      The biggest issue with prop 13 is they also rolled it out for commercial properties not just your primary residential home. So much prime land is squandered as a result by things like 1950s era single story retail at best or just a surface lot that sees minimal overhead but a lot of upside for the absentee owner.
    - IncreasePosts 3y ago
      Deferring taxes until death or home sale seems like it would work better. Now, you just have a system where the newest members of a neighborhood pay way more for services than extant members of the neighborhood.
      - nradov 3y ago
        Deferring taxes does nothing to prevent wasteful over spending by local governments. For all of its faults, Prop 13 was effective in capping spending.
    - panick21_ 3y ago
      Well sure but its basically a system where you massivly, massivly benefit people already have property, and literally take a huge shit on everybody else. Its basically a "lets give property owners billion and billions in subsidies" and make everybody else pay.
  - tnel77 3y ago
    Exactly. Our tax rates were cut (very slightly) this year, but valuations are still up so the tax bill is up as well. The city acts like we should be super grateful.
  - WalterBright 3y ago
    Seattle keeps raising property taxes in order to reduce the housing shortage.
    - seanmcdirmid 3y ago
      My property taxes have gone down for the last few years, probably because King County has moved the equation to taxing land more than structures (and I live in a town home on a small piece of land).
- doctorpangloss 3y ago
  On the other hand, the main reason the landlords using RealPage were not raising rent, seemingly, when they could, was vibes.
- jasonjayr 3y ago
  And don't forget stagnant wages, forcing desperate sales to those with capital in the bank go acquire property, and then rent it back for even more money....
  - bequanna 3y ago
    > …forcing desperate sales Are you referring to single or multifamily property? Either way, demand is strong and prices are high. Sellers still have a lot of power in this market and I haven’t really seen examples of anyone selling a property being taken advantage of.
- throwaway44773 3y ago
  Not to mention that construction has seen little gains in productivity over the past few decades resulting in the Baumol effect in the industry. There's little reason that constructing new housing cannot be automated to the degree that car construction is automated, but a variety of regulatory hurdles and little foreign competition makes building construction prices rise steadily. We need a well-funded startup to pull an Uber and indiscriminately sidestep regulation to disrupt the real estate market.
  - lotsofpulp 3y ago
    > There's little reason that constructing new housing cannot be automated to the degree that car construction is automated What experience do you have that you would be able to make a lofty claim like this? Are the people working at DR Horton and Lennar and the like missing something obvious? I figure businesses that construct and sell tens of thousands of homes in a year are at the bleeding edge of figuring out how to most efficiently construct a house.
    - margalabargala 3y ago
      One can observe the increase in quality and variety of prefab and manufactured homes, which fully take advantage of new manufacturing efficiency advances, while also observing assorted regulations that make building such housing infeasible in many parts of the US. What's you're special experience that makes you so confident this is not the case? Seems like a pretty extraordinary claim.
      - lotsofpulp 3y ago
        >What's you're special experience that makes you so confident this is not the case? Seems like a pretty extraordinary claim. The comment I responded to was edited to include the component about regulations being the problem. Obviously, the parameters within which to construct a house includes regulations, so my experience that automating home construction is not cost efficient yet is the fact that the largest and most successful home builders do not use those techniques. Aka reality. Whether or not regulations are appropriate or not is a separate discussion, but in my experience, most are good other than the ones that forbid the type of housing being built (such as higher density), or excessive setbacks that waste land. Edit: never mind, the comment I replied to was not edited, I just didn’t read it thoroughly. My bad!
- lenerdenator 3y ago
  > And then the increase in local taxes to try to compensate for the mass costs, and hurting the current tax base, is a major issue. My favorite is when jurisdictions let people past a certain age freeze the property tax rate at a certain point. Of course, these were the same people who: 1) campaigned against any and all housing that would disrupt the "charm" of the area 2) insisted on a 3/2 single-family home on a significant fraction of an acre 3) insisted that said home be miles away from the city center, requiring lots of infrastructure while simultaneously reducing the population density that would pay for said infrastructure 4) did nothing to shore up the budgets at the local, state, and national level over the last 30 years
  - tzs 3y ago
    Are you under the impression that only people who fall into one of those four categories age?
    - lenerdenator 3y ago
      This is a list of things that a generation by-and-large did, not a list of categories.
- ponector 3y ago
  But actual data says opposite. Amount of housing is growing while household size shrinking. >>US-wide, homes built in the last 6 years are 74% larger than those built in the 1910s, an increase of a little over 1,000 square feet. The average new home in America, be it condo or house, now spreads over 2,430 square feet. It is also important to note that, parallel to the rise in living space, households have been getting smaller over the same period. In 2015, the average number of people in a household is 2.58, compared to 4.54 in 1910. This means that today the average individual living in a newly built home in the US enjoys 211% more living space than their grandparents did, 957 square feet in total
  - itishappy 3y ago
    Does this control for short-term rentals? I could totally see us building more 3 bedroom Airbnb flats while simultaneously moving families into smaller apartments.
  - HumblyTossed 3y ago
    Yeah, this is annoying. Even the 55 and older neighborhood that was built a few miles from me recently, the smallest is about 2K sqft. What the heck?? Surely the math must make sense to someone.
  - highcountess 3y ago
    There is an inundation of foreign nationals holding in various camps and temporary housing that are fueling inflation (gov’t money printing, aka fraud) and will drive price increases soon as they start being interleaved into society. The other side of the equation is also that the same inundation of foreign nationals into the system will drive down wages. We are all riding the dragon. We shall see how it unravels.
  - silverquiet 3y ago
    This has long been a suspicion of mine; I've wondered what the actual ratio of housing square footage per person in the US is. I see the wealthy building palatial 3rd homes that are occupied a few weeks a year and wonder if that's a big enough demographic to have any noticeable affect on the national market. Seems wasteful regardless.
- panick21_ 3y ago
  Totally wrong. Infrastructure was not designed for population 30-50 years ago. The opposite, to much bad infrastructure was built for to few people. There are lots of town the same amount of people but about 5x more infrastructure per person. Even the places with growth have massivly overbuilt infrastructure. And low value housing ever further out is just not helping because the housing + transport cost equation doesn't add up for people. Its simply bad infrastructure, badly planned with a totally disfunctional insentive structure. The infrastructre isnt actually supported by the local taxes and raising taxes can often even in the best case only cover maintenance at best. Look at the data from Stong Towns or Urban 3. If R1 zoneing (single family homes) is 80% of you land and each on is losing money from a tax perspective, its not suprising. You have medium sized cities that have to maintaine roads that can reach half way accross the country. Indianapolis has to maintaine a road that reaches from it to Alaska. Lots of good infrastructure like trains and walkable neiberhoods were systematically destroyed and replaced with less efficent infrastructure. Any county with a great inner city somewhere is profiting massivly and that city is paying for all the infrastructure around it. Even delapidated inner cities are better from a a tax efficency point of view then single family homes or a wallmarkt. The poor neiberhoods are overtaxed and the richer ones are undertaxed by a large margin. Even if you assume the poor get the full service they should have, and they often don't. But im sure the solution is to make the highway threw Austin wider ...
nerdjon 3y ago
(Side note, it seems weird that they are just now publishing this article when this was news 2 or 3 months ago?). That being said, I noticed this with the apartment I am renting now. I checked daily and noticed the price was changing on a daily basis, I highly doubt this was done by a human. I ended up emailing them saying something like, I noticed the price was going down could we rent it for a few hundred less than what it currently is (it was going down close to $100 a day or something like that) and they agreed. I assume at some point the price would start going up based on when they expect people to look. It is really weird to see prices fluctuate that much. I even start to wonder if they purposefully don't list available units to keep a perception of availability issues to encourage renting at higher price.
- xnx 3y ago
  Also news a year ago: https://news.ycombinator.com/item?id=34926683 https://news.ycombinator.com/item?id=34926683
  - nerdjon 3y ago
    I thought it had been a while, only felt somewhat confident in saying 2 to 3 months ago. This article doesn't really add anything and its from a major site, so that makes this even more confusing. I mean, not that we should not talk about it and we should continue to shine al light on it. But, idk something about that feels weird.
- WalterBright 3y ago
  Prices of stocks vary moment by moment, too. It's what happens when there is a large number of buyers & sellers in a marketplace.
  - nerdjon 3y ago
    Stocks makes sense with that being a core part of how that market is supposed to work in the first place. Rent prices changing daily really doesn't make a ton of sense, there isn't really a valid reason for it except for an algorithm trying to figure out how to make the most money. Under normal circumstances I would expect maybe a monthly adjustment, maybe weekly if it was for a single unit not for all units in a building. Something like, oh this unit isn't renting we need to get it filled so let's adjust the price. That wouldn't really be a daily thing normally.
10000truths 3y ago
Related discussion: https://news.ycombinator.com/item?id=39575803 https://news.ycombinator.com/item?id=39575803
ajkjk 3y ago
...among other things: years of not building enough housing, plus cost disease on the prices of housing construction, plus Airbnb eating into housing supply, plus most new development being in unwalkable subdevelopments or sterile 5-over-1s* so that the demand for anything walkable gets blown through the roof. I think that's the list? Edit: oops, how could I forget anti-development zoning and Nimbyist development codes that prevent private solutions? * I would love to know the actual name, or a good derogatory name, for that type of apartment; they're not all 5-over-1s after all. The real problem is the lifelessness, and that the ground-floor businesses, when they do exist, tend to be depressing and corporate, such that people don't want to pick them over older construction that is better integrated with neighborhoods.
- Hansenq 3y ago
  These are called double-loaded corridors, which are basically buildings required by North American fire codes to have two accessible interior stairwells for each unit. Unfortunately due to architectural constraints, this means that all new buildings built in the past few decades have interior "hotel-like" corridors and exterior flat, boxy frames. North America is the only country that requires this type of fire construction--most other countries allow one interior staircase and an exterior staircase out of a window (like a ladder). Without this requirement, you're able to build buildings that are shaped differently, have windows in multiple directions, better support 3/4/5 bedroom condos, and are cheaper. There's a movement to harmonize our fire codes with international standards; you can read more here: https://www.centerforbuilding.org/blog/we-we-cant-build-family-sized-apartments-in-north-america https://www.centerforbuilding.org/blog/we-we-cant-build-fami...
  - panick21_ 3y ago
    Lets built houses out of wood mixed with oil and then make regulation to make it firesafe.
    - ajkjk 3y ago
      ?
jeffbee 3y ago
It is not price fixing, it is price finding. There is nothing wrong with a market maker existing. There is good evidence that markets with higher penetration of this software respond more quickly to declining markets than do other markets with disorganized lessors who maintain the "pretend and extend" strategy to rent setting.
- brlewis 3y ago
  From the article, In fact, the lawsuits claim that RealPage shares "peer lists" with clients that tell them exactly who else is providing data to the company within a specific distance of their property. This sounds like reassurance to a landlord that peers will mimic the same price moves. If true, I would call that price fixing.
  - jeffbee 3y ago
    You are hereby reminded that litigants can claim anything they want in a brief. The bar for sanctioning a party over unfounded claims is extremely high. Another kind of marketplace that provides detailed information on the other bids and asks is ... every functioning marketplace you have ever heard of. Commodities, stocks, futures, farm produce, everything.
    - frogperson 3y ago
      In all of those markets, both buyers and sellers have access to the asks and bids. For your analogy to hold, I think the market data needs to be freely available. Does RealPage give this info freely to renters, or is it hidden behind a subscription or fee and meant for landlords only?
- kibwen 3y ago
  Demand for a roof over one's head is inelastic. Markets do not work for inelastic goods. These people can't just downsize; renting is the low end of housing, and the low end is being systematically crushed by the landed aristocracy, abetted by automated price collusion.
j_m_b 3y ago
They're soaring now, they'll be crashing next. Live by the algorithm, die by the algorithm.
- jeffbee 3y ago
  Are rents falling in Austin because they don't use RealPage?
- nerdjon 3y ago
  The problem is we have been saying there is going to be a crash for years. But I don't know if there will be until the supply problem is fixed in big cities. Big dense towers are only going to go up so quick and until then, what is going to cause a crash? People are obviously paying these prices or they would be sitting vacant. It isn't like I can just pick up and say, I am not paying rent. I have to live somewhere. (Yes, I do fully realize that technically I could pickup and say exactly that, but realistically it's not a choice many would want to make if they have the choice). I agree we need one, badly. But I just don't see it happening unfortunately.
- bell-cot 3y ago
  The rental market can stay irrational for longer than most people can go without a decent place to live.
NuSkooler 3y ago
I'm not sure why the bigger issue isn't being talked about more, but yes, algorithms and "AI" are deployed in fashions that optimize profit. That's it. Profit. It's only getting much, much worse.
- happytiger 3y ago
  This is correct. I am currently working on a system to do price and purchase monitoring and optimize people’s purchasing. One of the things that I keep having to work around is dynamic real-time personalized pricing systems as they are more prevalent than I realized. It seems almost inevitable that everyone will move to subscription / surge pricing models unfortunately. There are no structural incentives for retailers to keep prices lower. Perhaps bulk purchasing will change the game at some point, but it seems unlikely.
  - WalterBright 3y ago
    Surge pricing also means doldrums pricing. The knife cuts both ways.
  - RajT88 3y ago
    > personalized pricing systems as they are more prevalent than I realized. Can you share the worst offenders? I am sure everyone is curious to know. ETA: I wonder if this leads to an adversarial service, which lets you do "persona based straw buying" to get the lowest possible price.
- candiddevmike 3y ago
  If things keep going this way, we will all end up paying the maximum an AI or algorithm thinks you can/will pay based on all of the data about you, your region, your friends, etc. For everything, not just rent.
  - jeffbee 3y ago
    You forgot the big input: how many other lessors are offering properties. There isn't a dial that owners can turn to just raise rents in a 2-sided market.
WalterBright 3y ago
The Law of Supply & Demand is to blame.
goles 3y ago
https://archive.is/MAfYj https://archive.is/MAfYj
lenerdenator 3y ago
Software does what its users want it to do. In the case of rents, the users want it to maximize profit. The users want it to maximize profit because they've been told you can distill every facet of good and bad in a society to whether the line goes up.
- Fauntleroy 3y ago
  Society's singular focus on shareholder returns is strangling everything. It feels like no good can be done in this world unless it makes the holy line go up. It's maddening.
  - lotsoweiners 3y ago
    > It feels like no good can be done in this world Is this not subjective? My neighbor 3 houses down might have a very different idea of what “good in this world” means.
    - lenerdenator 3y ago
      Idk man, "not having an entire generation in debt" sounds like everyone could agree on it.
      - int_19h 3y ago
        Not necessarily, if many people from the previous generations are cashing in on investment in that debt.
blackeyeblitzar 3y ago
This happens with compensation as well. It doesn’t have to include software to be problematic - it can just be about exchanging data with each other. Many companies share their compensation data with third parties via “surveys”, and those compensation data companies in return share industry data back to participating companies. This private signaling reduces wage competition but it’s not talked about much because the practice is visible only to HR teams and executives. Part of why they get away with this is an “antitrust safety zone” provided by the DOJ, where if you use a third party survey company and follow a couple other rules, you can get away with anti competitive practices. See the following: https://www.shrm.org/topics-tools/news/hr-magazine/agenda-compensation-avoiding-antitrust-violations https://www.shrm.org/topics-tools/news/hr-magazine/agenda-co... The DOJ announced they were revisiting these safety zones in 2023, but it seems like they were only doing so in the context of the healthcare industry: https://www.wsgr.com/en/insights/doj-withdraws-support-for-healthcare-policy-statements-and-increases-information-exchange-scrutiny.html https://www.wsgr.com/en/insights/doj-withdraws-support-for-h... Probably all tech companies also suppress wages this way. Enforcement and fines for these practices need to be stepped up, and new regulations are needed.
davidw 3y ago
If this tool allows a market to be a bit collude-y, it may add a bit to rents, and it's worth suing them to see what comes out. But that software won't get you LA rents in Houston. The macro picture is still supply and demand and we have to intervene there if we want housing to be more affordable in the places people want to live. People are so desperate for some bogeyman to blame. Institutional investors! RealPage! Short Term Rentals! Fixing those things would not hurt, to be clear, but lack of supply is the underlying issue, and it's often driven by local NIMBYism. I went to a hearing to support the construction of 40 "units" (aka homes) in my city last week and got jeered at by a crowd of older, wealthy retirees who were SO ANGRY about those being built. That same sort of scene (often with no one to speak in favor) is replayed day in and day out all across the country. This isn't to say 'markets solve all problems' but legalizing a variety of housing is very much a step that your local city council can take. It's a worthwhile issue to be involved in, because housing is at the nexus of so many other things - the economy, the environment, people's ability to live where they fit in best and much more. These groups are good: * https://new.yimbyaction.org/ https://new.yimbyaction.org/ * https://welcomingneighbors.us/ https://welcomingneighbors.us/
- kthejoker2 3y ago
  From the article > Critics say the cooperation between RealPage and apartment managers has emboldened landlords to raise prices even if it means more units are left empty when tenants are forced to leave. Without RealPage, the plaintiffs argue, landlords would be hesitant to jack up rents; instead, they'd focus on keeping their buildings full. So it sounds like in some point this is depressing utilization of existing stock. And given that it is (literally) rent-seeking and no one else can build an apartment there that they would rent, it seems like it's exacerbating any supply issues we're experiencing.
  - davidw 3y ago
    Right, like I wrote, it's probably jacking rents up some. But empty units are empty units and too many of them means you need to lower prices or you are losing out on money because you don't make anything from empty homes. And whatever effects this has (I'm curious to see what comes out off the lawsuit), you're just not going to be able to say "wow, look at how much landlords in San Francisco are making.... gosh, I want to double my rents!" if you're in a place without a tightly constrained housing supply.
gedy 3y ago
Inflation and investors chasing returns. Whatever tools they use don't really matter, and is a distraction. Build (a lot) more market rate housing or even free gov't housing. Deal with inflation aggressively (even deflation) or raise all salaries and benefits to match.
notaustinpowers 3y ago
As someone who worked in real estate for 8 years with 4 years in single-family property management, it is absolutely RealPage and all of the various automated tools that are beginning to populate the real estate sector. When pricing rental properties, you look at comparables within an (often small) geographic area, making price adjustments for changes such as access to public transportation, proximity to business districts, "newness" of the comparables, amenities in the community, etc. RealPage's pricing program does not have the ability to take those into consideration. Instead, an outdated 2bd/1ba, 20yo community that's 10 minutes to a business district is being priced comparatively to a just opened 2bd/1ba <1yo community smack dab in the middle of that business district. All because that new community also uses RealPage. RealPage has also made it incredibly difficult to override their pricing suggestions. In many cases requiring the manager of the company themselves to contact RealPage, file an appeal, and wait for RealPage to approve the appeal. RealPage is generating these pricing numbers by looking at their own customers, not at the larger market, and has taken that pricing power away from medium to large property management companies (which in recent decades have begun to consolidate the market). This is what happens when technology companies enter an industry that has been largely stagnant for years with little to no regulation in how those 3rd party tech companies have to operate in a sector that, itself, is highly regulated. There's a reason I left that industry, from my experience it's rotten to the core and is built to only benefit shareholders with little disregard for consumers and renters. You think Facebook's enshittification is bad and dangerous to consumers?
dyim 3y ago
We got a great deal on our current apartment due to a combination of 1. user error & 2. one of these algorithms. Our place was originally listed at $7,550 [1], but the leasing co used pictures from a shittier unit within the same building! Naturally nobody was interested, so the pricing system automatically ratcheted the price down to $6,050, at which point we checked out the apartment & noticed the discrepancy between pictures and reality. As people figure out the balance between "AI" and "common sense," I bet there's going to be tons of mispriced crap out there in market. [1] (Numbers changed by ~5% so as to not doxx our apt #)
- TMWNN 3y ago
  >We got a great deal on our current apartment due to a combination of 1. user error & 2. one of these algorithms. I periodically look at available units at a complex I considered the last time I moved. A few months ago I saw a unit twice the size of my apartment for only slightly more (and less than other, smaller units in the complex), presumably because of a RealPage pricing error. Moral of the story: When you're thinking of moving, start checking complexes you're interested in every day.
highcountess 3y ago
That seems localized and also heavily driven by the market manipulations of and through government pushing urbanization and wasteful co-located office work, rather than pushing for distribution and decentralization and remote working. In the area I am spending some time in it seems to be a different situation. Several large apartment complexes were clearly planned/started a few years and are now approaching completion, while the influx of people has clearly declined. We are taking at the very least many hundreds of not thousands of apartment units. Many of the complexes are struggling to fill and existing complexes that have been sold and over-leveraged over the last several years are being poached with lease-up type deals, e.g., two free months. I would love to know if these complexes are also outperforming. My anecdotal intuition is that they are not doing well, and will only get worse if the urban lobby will succeed, which is likely as it is closer to and in control of power and more corrupted than the non-urban lobby.
deleted 3y ago
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avgDev 3y ago
The cost of owning homes and apartments is also going up. Taxes on my property in a major metro area have nearly doubled since 2019. Inflation raised prices of labor and building materials. Insurance premium are also higher. Rents will continue to go up, as there just isn't enough supply in most major markets.
dang 3y ago
Related. Others? Pretty sure there have been others... I saw RealPage's crappy rent-jacking-up software so you don't have to - https://news.ycombinator.com/item?id=34926683 https://news.ycombinator.com/item?id=34926683 - Feb 2023 (403 comments) DOJ will examine whether RealPage helped landlords coordinate rent increases - https://news.ycombinator.com/item?id=33744136 https://news.ycombinator.com/item?id=33744136 - Nov 2022 (123 comments) RealPage and landlords illegally created a 'cartel' to set prices, lawsuit says - https://news.ycombinator.com/item?id=33633541 https://news.ycombinator.com/item?id=33633541 - Nov 2022 (3 comments) Lawsuit filed against rent-setting software RealPage - https://news.ycombinator.com/item?id=33317414 https://news.ycombinator.com/item?id=33317414 - Oct 2022 (50 comments) Rent going up? One company’s algorithm could be why - https://news.ycombinator.com/item?id=33224502 https://news.ycombinator.com/item?id=33224502 - Oct 2022 (279 comments)
seydor 3y ago
Could it be that people have developed an aversion to buying homes and instead choose to rent? Are the prices of houses rising at the same rate?
- Fauntleroy 3y ago
  I would love to buy a home, but cannot due to the extreme cost, therefore I rent. This is definitely not unique to me.
- nerdjon 3y ago
  I would love to buy a place, my rent is well above what I could expect to pay for a mortgage in the same area (for likely a nicer place). But rent around here being so high stands in the way of saving enough for a decent downpayment. I do know some people who prefer to rent for the flexibility, but I don't think its enough for this.
jjice 3y ago
It's worth noting that Realpage owns their namespake product, but they've also acquired Propertyware and Buildium, two other property management systems, over the years. With that, they have access to quite a lot of rent market data to share to others - more than one my initially expect. I believe there are about eight main pieces of software in the property management software space, but three of them are owned by Realpage. Tangential, but it's a sad industry to integrate into if you're an engineer. Very archaic and dominated. I understand why, but that doesn't make it less depressing to work with.
screature2 3y ago
Propublica has also been covering RealPages including senate and DOJ investigations + proposed legislation * (2022-10) https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r... * (2023-03) https://www.propublica.org/article/yieldstar-rent-increase-realpage-warren-sanders https://www.propublica.org/article/yieldstar-rent-increase-r... * (2023-11)https://www.propublica.org/article/doj-backs-tenants-price-fixing-case-big-landlords-real-estate-tech https://www.propublica.org/article/doj-backs-tenants-price-f... * (2024-01) https://www.propublica.org/article/senators-introduce-legislation-stop-landlords-algorithm-price-fixing https://www.propublica.org/article/senators-introduce-legisl... (edit to fix bullet formatting)
michaelteter 3y ago
What is actually missing from discussions about pricing is this: "What is a reasonable balance of profit for providing a service and benefit to those being served?" Without tools like RealPage, a landlord will naturally set a price that results in enough profit to make it worth their time, effort, stress, etc. Economies of scale can make a big difference here, as some of the overhead can be managed more efficiently by having a bigger business (more properties). But when something like this tool, or just old-fashioned price collusion, enters the equation, inevitably the profits go up unnaturally. It is no longer a free market where every actor will work in their own best interest, but rather a gang of actors is able to extract more from others. This is also exacerbated by the gang not being dependent anymore on the people it serves (it's customers) for other services. In the past, you as a business owner would think twice about grossly overcharging your customers because some of those customers provided their own services which you dependend upon. But now, you can buy your good from cheaper foreign markets, and you can buy your labor from imported artificially-low-paid workers. You no longer have to care what your customers think about you, because you'll never need them. At the end of the day, what is the point of a human's existence? Is it to make as much money as possible, irrespective of the service being provided or the exaggerated cost to the customers? Or is it to provide a needed service to others such that everyone can be reasonably happy? Clearly we have been trending toward the former for some time now, as evidenced by the rapid rate of increase of human productivity rewards going to a very small percentage of the population (0.1%) https://fred.stlouisfed.org/series/WFRBLTP1246 https://fred.stlouisfed.org/series/WFRBLTP1246 . This trend is not sustainable, because at some point the people will revolt. Maybe we'll all be dead before then from other issues we've caused, but given enough time on this path there will be a complete collapse of the current system.
bglazer 3y ago
Fun fact about RealPage that's not mentioned in the article: Jeffrey Roper is the guy who created RealPage's price setting product (YieldStar). Jeffrey Roper's previous professional experience was building a similar product for Alaska Airlines. Jeffrey Roper left that position when the U.S. Department of Justice indicted Alaska Airlines for price fixing and collusion using Jeffrey Roper's software. The feds even seized his computer as part of the investigation. RealPage saw his resume and said, "Yep that's our guy. We want price-fixing software and we only hire the best".
- stopyellingatme 3y ago
  Thank you for this info!
ngram 3y ago
what is the problem ? Land is a commodity and this fact has wide social acceptance, so let's let the market do its job, or let's start discussing the nature of the principle of private property.

Yes, its just price fixing, bypassing laws by using 3rd party tools. And with no increase in supply and the increase of people needing housing, the prices can go only go higher. Infrastructure designed for populations 30-50 years ago, city planning didn't foresee the need for the public transportation and housing needs for these mega cities. And then the increase in local taxes to try to compensate for the mass costs, and hurting the current tax base, is a major issue. Top if off with the increasing inflation and interest rates which is also compounding the situation.

jimbob45 3y ago
Price fixing and no penalty for leaving units vacant.
- natoliniak 3y ago
  question: how can a municipality determine if a unit is vacant?
blakesterz 3y ago
> And then the increase in local taxes to try to compensate for the mass costs I don't know if it's like this everywhere, but our local taxes have gone up by a big percentage over the past several years. They say they haven't raised our taxes, but since valuations go up, our taxes go up... by thousands of dollars.
- IncreasePosts 3y ago
  If valuations are up across the board, and the revenue requirements remain fixed, then your mill levy should be lower and your tax burden should be the same as the past. It should be pretty clear that your municipality is collecting more taxes than they were previously from published reports. If they aren't, then that means your property valuation has gone up more than others in your region...that should be considered a good thing, even if you have a slightly higher tax burden because of it.
  - jeffbee 3y ago
    In what conceivable reality could housing costs go up across the board but municipal revenues remain flat? Municipal employees need a place to sleep, so housing costs lead directly to new revenue needs.
    - IncreasePosts 3y ago
      If municipal revenue doesn't remain flat, then you can't say taxes haven't gone up.
- nradov 3y ago
  This was the main reason behind California's Proposition 13 in 1978. At the time, homeowners were seeing their taxes go up and up every year just based on valuation increases. Meanwhile their incomes weren't necessarily increasing at the same rate. Prop 13 has had some negative effects but the anger by voters at the time is entirely understandable.
  - asdff 3y ago
    The biggest issue with prop 13 is they also rolled it out for commercial properties not just your primary residential home. So much prime land is squandered as a result by things like 1950s era single story retail at best or just a surface lot that sees minimal overhead but a lot of upside for the absentee owner.
  - IncreasePosts 3y ago
    Deferring taxes until death or home sale seems like it would work better. Now, you just have a system where the newest members of a neighborhood pay way more for services than extant members of the neighborhood.
    - nradov 3y ago
      Deferring taxes does nothing to prevent wasteful over spending by local governments. For all of its faults, Prop 13 was effective in capping spending.
  - panick21_ 3y ago
    Well sure but its basically a system where you massivly, massivly benefit people already have property, and literally take a huge shit on everybody else. Its basically a "lets give property owners billion and billions in subsidies" and make everybody else pay.
- tnel77 3y ago
  Exactly. Our tax rates were cut (very slightly) this year, but valuations are still up so the tax bill is up as well. The city acts like we should be super grateful.
- WalterBright 3y ago
  Seattle keeps raising property taxes in order to reduce the housing shortage.
  - seanmcdirmid 3y ago
    My property taxes have gone down for the last few years, probably because King County has moved the equation to taxing land more than structures (and I live in a town home on a small piece of land).
doctorpangloss 3y ago
On the other hand, the main reason the landlords using RealPage were not raising rent, seemingly, when they could, was vibes.
jasonjayr 3y ago
And don't forget stagnant wages, forcing desperate sales to those with capital in the bank go acquire property, and then rent it back for even more money....
- bequanna 3y ago
  > …forcing desperate sales Are you referring to single or multifamily property? Either way, demand is strong and prices are high. Sellers still have a lot of power in this market and I haven’t really seen examples of anyone selling a property being taken advantage of.
throwaway44773 3y ago
Not to mention that construction has seen little gains in productivity over the past few decades resulting in the Baumol effect in the industry. There's little reason that constructing new housing cannot be automated to the degree that car construction is automated, but a variety of regulatory hurdles and little foreign competition makes building construction prices rise steadily. We need a well-funded startup to pull an Uber and indiscriminately sidestep regulation to disrupt the real estate market.
- lotsofpulp 3y ago
  > There's little reason that constructing new housing cannot be automated to the degree that car construction is automated What experience do you have that you would be able to make a lofty claim like this? Are the people working at DR Horton and Lennar and the like missing something obvious? I figure businesses that construct and sell tens of thousands of homes in a year are at the bleeding edge of figuring out how to most efficiently construct a house.
  - margalabargala 3y ago
    One can observe the increase in quality and variety of prefab and manufactured homes, which fully take advantage of new manufacturing efficiency advances, while also observing assorted regulations that make building such housing infeasible in many parts of the US. What's you're special experience that makes you so confident this is not the case? Seems like a pretty extraordinary claim.
    - lotsofpulp 3y ago
      >What's you're special experience that makes you so confident this is not the case? Seems like a pretty extraordinary claim. The comment I responded to was edited to include the component about regulations being the problem. Obviously, the parameters within which to construct a house includes regulations, so my experience that automating home construction is not cost efficient yet is the fact that the largest and most successful home builders do not use those techniques. Aka reality. Whether or not regulations are appropriate or not is a separate discussion, but in my experience, most are good other than the ones that forbid the type of housing being built (such as higher density), or excessive setbacks that waste land. Edit: never mind, the comment I replied to was not edited, I just didn’t read it thoroughly. My bad!
lenerdenator 3y ago
> And then the increase in local taxes to try to compensate for the mass costs, and hurting the current tax base, is a major issue. My favorite is when jurisdictions let people past a certain age freeze the property tax rate at a certain point. Of course, these were the same people who: 1) campaigned against any and all housing that would disrupt the "charm" of the area 2) insisted on a 3/2 single-family home on a significant fraction of an acre 3) insisted that said home be miles away from the city center, requiring lots of infrastructure while simultaneously reducing the population density that would pay for said infrastructure 4) did nothing to shore up the budgets at the local, state, and national level over the last 30 years
- tzs 3y ago
  Are you under the impression that only people who fall into one of those four categories age?
  - lenerdenator 3y ago
    This is a list of things that a generation by-and-large did, not a list of categories.
ponector 3y ago
But actual data says opposite. Amount of housing is growing while household size shrinking. >>US-wide, homes built in the last 6 years are 74% larger than those built in the 1910s, an increase of a little over 1,000 square feet. The average new home in America, be it condo or house, now spreads over 2,430 square feet. It is also important to note that, parallel to the rise in living space, households have been getting smaller over the same period. In 2015, the average number of people in a household is 2.58, compared to 4.54 in 1910. This means that today the average individual living in a newly built home in the US enjoys 211% more living space than their grandparents did, 957 square feet in total
- itishappy 3y ago
  Does this control for short-term rentals? I could totally see us building more 3 bedroom Airbnb flats while simultaneously moving families into smaller apartments.
- HumblyTossed 3y ago
  Yeah, this is annoying. Even the 55 and older neighborhood that was built a few miles from me recently, the smallest is about 2K sqft. What the heck?? Surely the math must make sense to someone.
- highcountess 3y ago
  There is an inundation of foreign nationals holding in various camps and temporary housing that are fueling inflation (gov’t money printing, aka fraud) and will drive price increases soon as they start being interleaved into society. The other side of the equation is also that the same inundation of foreign nationals into the system will drive down wages. We are all riding the dragon. We shall see how it unravels.
- silverquiet 3y ago
  This has long been a suspicion of mine; I've wondered what the actual ratio of housing square footage per person in the US is. I see the wealthy building palatial 3rd homes that are occupied a few weeks a year and wonder if that's a big enough demographic to have any noticeable affect on the national market. Seems wasteful regardless.
panick21_ 3y ago
Totally wrong. Infrastructure was not designed for population 30-50 years ago. The opposite, to much bad infrastructure was built for to few people. There are lots of town the same amount of people but about 5x more infrastructure per person. Even the places with growth have massivly overbuilt infrastructure. And low value housing ever further out is just not helping because the housing + transport cost equation doesn't add up for people. Its simply bad infrastructure, badly planned with a totally disfunctional insentive structure. The infrastructre isnt actually supported by the local taxes and raising taxes can often even in the best case only cover maintenance at best. Look at the data from Stong Towns or Urban 3. If R1 zoneing (single family homes) is 80% of you land and each on is losing money from a tax perspective, its not suprising. You have medium sized cities that have to maintaine roads that can reach half way accross the country. Indianapolis has to maintaine a road that reaches from it to Alaska. Lots of good infrastructure like trains and walkable neiberhoods were systematically destroyed and replaced with less efficent infrastructure. Any county with a great inner city somewhere is profiting massivly and that city is paying for all the infrastructure around it. Even delapidated inner cities are better from a a tax efficency point of view then single family homes or a wallmarkt. The poor neiberhoods are overtaxed and the richer ones are undertaxed by a large margin. Even if you assume the poor get the full service they should have, and they often don't. But im sure the solution is to make the highway threw Austin wider ...

nerdjon 3y ago

(Side note, it seems weird that they are just now publishing this article when this was news 2 or 3 months ago?). That being said, I noticed this with the apartment I am renting now. I checked daily and noticed the price was changing on a daily basis, I highly doubt this was done by a human. I ended up emailing them saying something like, I noticed the price was going down could we rent it for a few hundred less than what it currently is (it was going down close to $100 a day or something like that) and they agreed. I assume at some point the price would start going up based on when they expect people to look. It is really weird to see prices fluctuate that much. I even start to wonder if they purposefully don't list available units to keep a perception of availability issues to encourage renting at higher price.

xnx 3y ago
Also news a year ago: https://news.ycombinator.com/item?id=34926683 https://news.ycombinator.com/item?id=34926683
- nerdjon 3y ago
  I thought it had been a while, only felt somewhat confident in saying 2 to 3 months ago. This article doesn't really add anything and its from a major site, so that makes this even more confusing. I mean, not that we should not talk about it and we should continue to shine al light on it. But, idk something about that feels weird.
WalterBright 3y ago
Prices of stocks vary moment by moment, too. It's what happens when there is a large number of buyers & sellers in a marketplace.
- nerdjon 3y ago
  Stocks makes sense with that being a core part of how that market is supposed to work in the first place. Rent prices changing daily really doesn't make a ton of sense, there isn't really a valid reason for it except for an algorithm trying to figure out how to make the most money. Under normal circumstances I would expect maybe a monthly adjustment, maybe weekly if it was for a single unit not for all units in a building. Something like, oh this unit isn't renting we need to get it filled so let's adjust the price. That wouldn't really be a daily thing normally.

10000truths 3y ago

Related discussion: https://news.ycombinator.com/item?id=39575803 https://news.ycombinator.com/item?id=39575803

ajkjk 3y ago

...among other things: years of not building enough housing, plus cost disease on the prices of housing construction, plus Airbnb eating into housing supply, plus most new development being in unwalkable subdevelopments or sterile 5-over-1s* so that the demand for anything walkable gets blown through the roof. I think that's the list? Edit: oops, how could I forget anti-development zoning and Nimbyist development codes that prevent private solutions? * I would love to know the actual name, or a good derogatory name, for that type of apartment; they're not all 5-over-1s after all. The real problem is the lifelessness, and that the ground-floor businesses, when they do exist, tend to be depressing and corporate, such that people don't want to pick them over older construction that is better integrated with neighborhoods.

Hansenq 3y ago
These are called double-loaded corridors, which are basically buildings required by North American fire codes to have two accessible interior stairwells for each unit. Unfortunately due to architectural constraints, this means that all new buildings built in the past few decades have interior "hotel-like" corridors and exterior flat, boxy frames. North America is the only country that requires this type of fire construction--most other countries allow one interior staircase and an exterior staircase out of a window (like a ladder). Without this requirement, you're able to build buildings that are shaped differently, have windows in multiple directions, better support 3/4/5 bedroom condos, and are cheaper. There's a movement to harmonize our fire codes with international standards; you can read more here: https://www.centerforbuilding.org/blog/we-we-cant-build-family-sized-apartments-in-north-america https://www.centerforbuilding.org/blog/we-we-cant-build-fami...
- panick21_ 3y ago
  Lets built houses out of wood mixed with oil and then make regulation to make it firesafe.
  - ajkjk 3y ago
    ?

jeffbee 3y ago

It is not price fixing, it is price finding. There is nothing wrong with a market maker existing. There is good evidence that markets with higher penetration of this software respond more quickly to declining markets than do other markets with disorganized lessors who maintain the "pretend and extend" strategy to rent setting.

brlewis 3y ago
From the article, In fact, the lawsuits claim that RealPage shares "peer lists" with clients that tell them exactly who else is providing data to the company within a specific distance of their property. This sounds like reassurance to a landlord that peers will mimic the same price moves. If true, I would call that price fixing.
- jeffbee 3y ago
  You are hereby reminded that litigants can claim anything they want in a brief. The bar for sanctioning a party over unfounded claims is extremely high. Another kind of marketplace that provides detailed information on the other bids and asks is ... every functioning marketplace you have ever heard of. Commodities, stocks, futures, farm produce, everything.
  - frogperson 3y ago
    In all of those markets, both buyers and sellers have access to the asks and bids. For your analogy to hold, I think the market data needs to be freely available. Does RealPage give this info freely to renters, or is it hidden behind a subscription or fee and meant for landlords only?
kibwen 3y ago
Demand for a roof over one's head is inelastic. Markets do not work for inelastic goods. These people can't just downsize; renting is the low end of housing, and the low end is being systematically crushed by the landed aristocracy, abetted by automated price collusion.

j_m_b 3y ago

They're soaring now, they'll be crashing next. Live by the algorithm, die by the algorithm.

jeffbee 3y ago
Are rents falling in Austin because they don't use RealPage?
nerdjon 3y ago
The problem is we have been saying there is going to be a crash for years. But I don't know if there will be until the supply problem is fixed in big cities. Big dense towers are only going to go up so quick and until then, what is going to cause a crash? People are obviously paying these prices or they would be sitting vacant. It isn't like I can just pick up and say, I am not paying rent. I have to live somewhere. (Yes, I do fully realize that technically I could pickup and say exactly that, but realistically it's not a choice many would want to make if they have the choice). I agree we need one, badly. But I just don't see it happening unfortunately.
bell-cot 3y ago
The rental market can stay irrational for longer than most people can go without a decent place to live.

NuSkooler 3y ago

I'm not sure why the bigger issue isn't being talked about more, but yes, algorithms and "AI" are deployed in fashions that optimize profit. That's it. Profit. It's only getting much, much worse.

happytiger 3y ago
This is correct. I am currently working on a system to do price and purchase monitoring and optimize people’s purchasing. One of the things that I keep having to work around is dynamic real-time personalized pricing systems as they are more prevalent than I realized. It seems almost inevitable that everyone will move to subscription / surge pricing models unfortunately. There are no structural incentives for retailers to keep prices lower. Perhaps bulk purchasing will change the game at some point, but it seems unlikely.
- WalterBright 3y ago
  Surge pricing also means doldrums pricing. The knife cuts both ways.
- RajT88 3y ago
  > personalized pricing systems as they are more prevalent than I realized. Can you share the worst offenders? I am sure everyone is curious to know. ETA: I wonder if this leads to an adversarial service, which lets you do "persona based straw buying" to get the lowest possible price.
candiddevmike 3y ago
If things keep going this way, we will all end up paying the maximum an AI or algorithm thinks you can/will pay based on all of the data about you, your region, your friends, etc. For everything, not just rent.
- jeffbee 3y ago
  You forgot the big input: how many other lessors are offering properties. There isn't a dial that owners can turn to just raise rents in a 2-sided market.

WalterBright 3y ago

The Law of Supply & Demand is to blame.

goles 3y ago

https://archive.is/MAfYj https://archive.is/MAfYj

lenerdenator 3y ago

Software does what its users want it to do. In the case of rents, the users want it to maximize profit. The users want it to maximize profit because they've been told you can distill every facet of good and bad in a society to whether the line goes up.

Fauntleroy 3y ago
Society's singular focus on shareholder returns is strangling everything. It feels like no good can be done in this world unless it makes the holy line go up. It's maddening.
- lotsoweiners 3y ago
  > It feels like no good can be done in this world Is this not subjective? My neighbor 3 houses down might have a very different idea of what “good in this world” means.
  - lenerdenator 3y ago
    Idk man, "not having an entire generation in debt" sounds like everyone could agree on it.
    - int_19h 3y ago
      Not necessarily, if many people from the previous generations are cashing in on investment in that debt.

blackeyeblitzar 3y ago

This happens with compensation as well. It doesn’t have to include software to be problematic - it can just be about exchanging data with each other. Many companies share their compensation data with third parties via “surveys”, and those compensation data companies in return share industry data back to participating companies. This private signaling reduces wage competition but it’s not talked about much because the practice is visible only to HR teams and executives. Part of why they get away with this is an “antitrust safety zone” provided by the DOJ, where if you use a third party survey company and follow a couple other rules, you can get away with anti competitive practices. See the following: https://www.shrm.org/topics-tools/news/hr-magazine/agenda-compensation-avoiding-antitrust-violations https://www.shrm.org/topics-tools/news/hr-magazine/agenda-co... The DOJ announced they were revisiting these safety zones in 2023, but it seems like they were only doing so in the context of the healthcare industry: https://www.wsgr.com/en/insights/doj-withdraws-support-for-healthcare-policy-statements-and-increases-information-exchange-scrutiny.html https://www.wsgr.com/en/insights/doj-withdraws-support-for-h... Probably all tech companies also suppress wages this way. Enforcement and fines for these practices need to be stepped up, and new regulations are needed.

davidw 3y ago

If this tool allows a market to be a bit collude-y, it may add a bit to rents, and it's worth suing them to see what comes out. But that software won't get you LA rents in Houston. The macro picture is still supply and demand and we have to intervene there if we want housing to be more affordable in the places people want to live. People are so desperate for some bogeyman to blame. Institutional investors! RealPage! Short Term Rentals! Fixing those things would not hurt, to be clear, but lack of supply is the underlying issue, and it's often driven by local NIMBYism. I went to a hearing to support the construction of 40 "units" (aka homes) in my city last week and got jeered at by a crowd of older, wealthy retirees who were SO ANGRY about those being built. That same sort of scene (often with no one to speak in favor) is replayed day in and day out all across the country. This isn't to say 'markets solve all problems' but legalizing a variety of housing is very much a step that your local city council can take. It's a worthwhile issue to be involved in, because housing is at the nexus of so many other things - the economy, the environment, people's ability to live where they fit in best and much more. These groups are good: * https://new.yimbyaction.org/ https://new.yimbyaction.org/ * https://welcomingneighbors.us/ https://welcomingneighbors.us/

kthejoker2 3y ago
From the article > Critics say the cooperation between RealPage and apartment managers has emboldened landlords to raise prices even if it means more units are left empty when tenants are forced to leave. Without RealPage, the plaintiffs argue, landlords would be hesitant to jack up rents; instead, they'd focus on keeping their buildings full. So it sounds like in some point this is depressing utilization of existing stock. And given that it is (literally) rent-seeking and no one else can build an apartment there that they would rent, it seems like it's exacerbating any supply issues we're experiencing.
- davidw 3y ago
  Right, like I wrote, it's probably jacking rents up some. But empty units are empty units and too many of them means you need to lower prices or you are losing out on money because you don't make anything from empty homes. And whatever effects this has (I'm curious to see what comes out off the lawsuit), you're just not going to be able to say "wow, look at how much landlords in San Francisco are making.... gosh, I want to double my rents!" if you're in a place without a tightly constrained housing supply.

gedy 3y ago

Inflation and investors chasing returns. Whatever tools they use don't really matter, and is a distraction. Build (a lot) more market rate housing or even free gov't housing. Deal with inflation aggressively (even deflation) or raise all salaries and benefits to match.

notaustinpowers 3y ago

As someone who worked in real estate for 8 years with 4 years in single-family property management, it is absolutely RealPage and all of the various automated tools that are beginning to populate the real estate sector. When pricing rental properties, you look at comparables within an (often small) geographic area, making price adjustments for changes such as access to public transportation, proximity to business districts, "newness" of the comparables, amenities in the community, etc. RealPage's pricing program does not have the ability to take those into consideration. Instead, an outdated 2bd/1ba, 20yo community that's 10 minutes to a business district is being priced comparatively to a just opened 2bd/1ba <1yo community smack dab in the middle of that business district. All because that new community also uses RealPage. RealPage has also made it incredibly difficult to override their pricing suggestions. In many cases requiring the manager of the company themselves to contact RealPage, file an appeal, and wait for RealPage to approve the appeal. RealPage is generating these pricing numbers by looking at their own customers, not at the larger market, and has taken that pricing power away from medium to large property management companies (which in recent decades have begun to consolidate the market). This is what happens when technology companies enter an industry that has been largely stagnant for years with little to no regulation in how those 3rd party tech companies have to operate in a sector that, itself, is highly regulated. There's a reason I left that industry, from my experience it's rotten to the core and is built to only benefit shareholders with little disregard for consumers and renters. You think Facebook's enshittification is bad and dangerous to consumers?

dyim 3y ago

We got a great deal on our current apartment due to a combination of 1. user error & 2. one of these algorithms. Our place was originally listed at $7,550 [1], but the leasing co used pictures from a shittier unit within the same building! Naturally nobody was interested, so the pricing system automatically ratcheted the price down to $6,050, at which point we checked out the apartment & noticed the discrepancy between pictures and reality. As people figure out the balance between "AI" and "common sense," I bet there's going to be tons of mispriced crap out there in market. [1] (Numbers changed by ~5% so as to not doxx our apt #)

TMWNN 3y ago
>We got a great deal on our current apartment due to a combination of 1. user error & 2. one of these algorithms. I periodically look at available units at a complex I considered the last time I moved. A few months ago I saw a unit twice the size of my apartment for only slightly more (and less than other, smaller units in the complex), presumably because of a RealPage pricing error. Moral of the story: When you're thinking of moving, start checking complexes you're interested in every day.

highcountess 3y ago

That seems localized and also heavily driven by the market manipulations of and through government pushing urbanization and wasteful co-located office work, rather than pushing for distribution and decentralization and remote working. In the area I am spending some time in it seems to be a different situation. Several large apartment complexes were clearly planned/started a few years and are now approaching completion, while the influx of people has clearly declined. We are taking at the very least many hundreds of not thousands of apartment units. Many of the complexes are struggling to fill and existing complexes that have been sold and over-leveraged over the last several years are being poached with lease-up type deals, e.g., two free months. I would love to know if these complexes are also outperforming. My anecdotal intuition is that they are not doing well, and will only get worse if the urban lobby will succeed, which is likely as it is closer to and in control of power and more corrupted than the non-urban lobby.

deleted 3y ago

[deleted]

avgDev 3y ago

The cost of owning homes and apartments is also going up. Taxes on my property in a major metro area have nearly doubled since 2019. Inflation raised prices of labor and building materials. Insurance premium are also higher. Rents will continue to go up, as there just isn't enough supply in most major markets.

dang 3y ago

Related. Others? Pretty sure there have been others... I saw RealPage's crappy rent-jacking-up software so you don't have to - https://news.ycombinator.com/item?id=34926683 https://news.ycombinator.com/item?id=34926683 - Feb 2023 (403 comments) DOJ will examine whether RealPage helped landlords coordinate rent increases - https://news.ycombinator.com/item?id=33744136 https://news.ycombinator.com/item?id=33744136 - Nov 2022 (123 comments) RealPage and landlords illegally created a 'cartel' to set prices, lawsuit says - https://news.ycombinator.com/item?id=33633541 https://news.ycombinator.com/item?id=33633541 - Nov 2022 (3 comments) Lawsuit filed against rent-setting software RealPage - https://news.ycombinator.com/item?id=33317414 https://news.ycombinator.com/item?id=33317414 - Oct 2022 (50 comments) Rent going up? One company’s algorithm could be why - https://news.ycombinator.com/item?id=33224502 https://news.ycombinator.com/item?id=33224502 - Oct 2022 (279 comments)

seydor 3y ago

Could it be that people have developed an aversion to buying homes and instead choose to rent? Are the prices of houses rising at the same rate?

Fauntleroy 3y ago
I would love to buy a home, but cannot due to the extreme cost, therefore I rent. This is definitely not unique to me.
nerdjon 3y ago
I would love to buy a place, my rent is well above what I could expect to pay for a mortgage in the same area (for likely a nicer place). But rent around here being so high stands in the way of saving enough for a decent downpayment. I do know some people who prefer to rent for the flexibility, but I don't think its enough for this.

jjice 3y ago

It's worth noting that Realpage owns their namespake product, but they've also acquired Propertyware and Buildium, two other property management systems, over the years. With that, they have access to quite a lot of rent market data to share to others - more than one my initially expect. I believe there are about eight main pieces of software in the property management software space, but three of them are owned by Realpage. Tangential, but it's a sad industry to integrate into if you're an engineer. Very archaic and dominated. I understand why, but that doesn't make it less depressing to work with.

screature2 3y ago

Propublica has also been covering RealPages including senate and DOJ investigations + proposed legislation * (2022-10) https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r... * (2023-03) https://www.propublica.org/article/yieldstar-rent-increase-realpage-warren-sanders https://www.propublica.org/article/yieldstar-rent-increase-r... * (2023-11)https://www.propublica.org/article/doj-backs-tenants-price-fixing-case-big-landlords-real-estate-tech https://www.propublica.org/article/doj-backs-tenants-price-f... * (2024-01) https://www.propublica.org/article/senators-introduce-legislation-stop-landlords-algorithm-price-fixing https://www.propublica.org/article/senators-introduce-legisl... (edit to fix bullet formatting)

michaelteter 3y ago

What is actually missing from discussions about pricing is this: "What is a reasonable balance of profit for providing a service and benefit to those being served?" Without tools like RealPage, a landlord will naturally set a price that results in enough profit to make it worth their time, effort, stress, etc. Economies of scale can make a big difference here, as some of the overhead can be managed more efficiently by having a bigger business (more properties). But when something like this tool, or just old-fashioned price collusion, enters the equation, inevitably the profits go up unnaturally. It is no longer a free market where every actor will work in their own best interest, but rather a gang of actors is able to extract more from others. This is also exacerbated by the gang not being dependent anymore on the people it serves (it's customers) for other services. In the past, you as a business owner would think twice about grossly overcharging your customers because some of those customers provided their own services which you dependend upon. But now, you can buy your good from cheaper foreign markets, and you can buy your labor from imported artificially-low-paid workers. You no longer have to care what your customers think about you, because you'll never need them. At the end of the day, what is the point of a human's existence? Is it to make as much money as possible, irrespective of the service being provided or the exaggerated cost to the customers? Or is it to provide a needed service to others such that everyone can be reasonably happy? Clearly we have been trending toward the former for some time now, as evidenced by the rapid rate of increase of human productivity rewards going to a very small percentage of the population (0.1%) https://fred.stlouisfed.org/series/WFRBLTP1246 https://fred.stlouisfed.org/series/WFRBLTP1246 . This trend is not sustainable, because at some point the people will revolt. Maybe we'll all be dead before then from other issues we've caused, but given enough time on this path there will be a complete collapse of the current system.

bglazer 3y ago

Fun fact about RealPage that's not mentioned in the article: Jeffrey Roper is the guy who created RealPage's price setting product (YieldStar). Jeffrey Roper's previous professional experience was building a similar product for Alaska Airlines. Jeffrey Roper left that position when the U.S. Department of Justice indicted Alaska Airlines for price fixing and collusion using Jeffrey Roper's software. The feds even seized his computer as part of the investigation. RealPage saw his resume and said, "Yep that's our guy. We want price-fixing software and we only hire the best".

stopyellingatme 3y ago
Thank you for this info!

ngram 3y ago

what is the problem ? Land is a commodity and this fact has wide social acceptance, so let's let the market do its job, or let's start discussing the nature of the principle of private property.