5 ms·

Everyone wants someone to blame besides the things that actual cause the problem: * Their NIMBY neighbors * NIMBY zoning If you actually show up to local hea

by davidw 2y ago

Everyone wants someone to blame besides the things that actual cause the problem: * Their NIMBY neighbors * NIMBY zoning If you actually show up to local hearings and city council meetings and the like, you see that the housing crisis is mostly local, even if, emotionally, it feels great to blame it on some far off entity: https://bendyimby.com/2024/04/16/the-hearing-and-the-housing-shortage/ https://bendyimby.com/2024/04/16/the-hearing-and-the-housing... People who actually study this stuff back this up with numbers: * https://www.strongtowns.org/journal/2024/2/21-going-after-corporate-homebuyers-good-politics-ineffective-policy https://www.strongtowns.org/journal/2024/2/21-going-after-co... * https://www.theatlantic.com/ideas/archive/2023/01/housing-crisis-hedge-funds-private-equity-scapegoat/672839/ https://www.theatlantic.com/ideas/archive/2023/01/housing-cr...

bsder 2y ago
This doesn't apply in places like Austin where people just build further out. Rent is falling, but nowhere near as fast as it should be. These kinds of "algorithms" that are effectively "outsourced collusion" are the reasons why. Even worse, there is zero reason why these companies should exist except for "collusion as a service". Rental property pricing isn't rocket science. Set an occupancy target percentage and then adjust the price up or down to reach that target. The rental prices would then be responsive to the market conditions with absolutely no collusion whatsoever. But that won't do what the landlords want which is prevent the price from going down at all.
- davidw 2y ago
  If the algorithms are so good, why don't landlords in Houston use them to charge San Francisco prices? I think it's possible that RealPage adds a few percentage points to rents, and that's a bad thing. 1% over a bunch of rentals is a lot of money and harm to renters and that's worth suing over. That said, 1 or 2% here or there is no match for "supply and demand".
  - bsder 2y ago
    You can see the difference in Austin in private equity owned apartments vs random houses or apartment buildings that predate that. The private equity development apartments are all in on RealPage and are in absolute lockstep with one another (they also have a whole host of dark patterns which I won't get into). So, it's not enough to have development, you have to have development that isn't private equity driven. The stuff that has a single owner is several hundred dollars cheaper and the differential is increasing. Some of this is age of the aprtment complex, but the age differential has been pretty small in areas where the university students drive demand. It's not just RealPage. For example, being able to eat the rental loss of unoccupied apartments is because private equity plays financing games and is willing to give up huge amounts of cash inflow in order to avoid paying any amount of cash outflow. However, RealPage is one of the legs of the stool.
  - gimmeThaBeet 2y ago
    From the propublica about this last time, there was a lot of statements like this that stuck with me: > “Initially, it was very hard for executives to accept that they could operate at 94% or 96% and achieve a higher NOI by increasing rents,” Based on how multifamily operators refer to the software, it sounds like it was what they were doing before, just supercharged automation. But this was part where it seemed like the algorithm made a leap, that the optimal trajectory wasn't max occupancy.
    - chii 2y ago
      the thing is, you don't want to be the landlord that is vacant while other landlords are reaping the higher rental prices. So for anyone, they would just opt out of the algorithm and charge a slightly lower price when they get a vacancy. I really dont think cartels work in a market as competitive as real estate rentals. It's a scape goat at best imho.
      - bsder 2y ago
        > So for anyone, they would just opt out of the algorithm and charge a slightly lower price when they get a vacancy. The software itself makes this very difficult to do--it's one of their dark patterns.
- refurb 2y ago
  > Even worse, there is zero reason why these companies should exist except for "collusion as a service". That doesn't make a lot of sense. Take a market where there is 100% price transparency - cars, electronics - are a couple examples. As a manufacturer I can easily find out exactly what my competitors are charging and change my price at will. Is that collusion? The market is dependent on transparent pricing.
gedy 2y ago
Inflation?
- davidw 2y ago
  That's me in the picture of the hearing. 40 homes there, that have taken years to build because of NIMBY neighbors. That is the problem. Not Wall Street. Not some xenophobic "foreign buyers!". Not even short term rentals. It's zoning and NIMBYs and on top of that now, interest rates. The 'bogeyman' theories feel good because it means you don't have to face up to the reality of your neighors' NIMBYism. But they're wrong. It is your neighbors.
  - whimsicalism 2y ago
    I agree with almost everything you’re saying but I do think short-term rentals and immigration are significant factors on the demand side.
    - davidw 2y ago
      It depends on the market - there are some really tiny destination towns. Moab, Utah, say, where short term rentals are more impactful.
jauntywundrkind 2y ago
Having an algorithm literally setting prices and literally forbidding rental properties from setting lower prices seems like a real cause of problems too? I agree there's a lot of other barriers to fixing housing! But the algorithmically-driven collusion here is off the wall crazy town. Zero accountability for what would have wrecked any entity doing the same a couple years ago.
- Aunche 2y ago
  AFAICT there isn't anything preventing landlords from setting pricing lower than what RealPage recommends. That is just Propublica's weasily framing. In reality, it sounds like they're saying, if you want to get the results from our recommendations, you actually need to follow our recommendations.
  - narism 2y ago
    Realpage put many roadblocks in the way of customers using prices not provided by the system. A couple: Rent overrides required written business justifications, would often trigger follow ups to the agent attempting the override and then their management to dissuade them, and eventually might be refused in the end. Realpage monitored compliance of customers using their provided prices and those who didn’t meet a certain level would be kicked off the platform. Pages 17-22 here: https://oag.dc.gov/sites/default/files/2023-11/DC%20OAG%20RealPage%20Complaint%20-%20Filed.pdf https://oag.dc.gov/sites/default/files/2023-11/DC%20OAG%20Re...
    - Aunche 2y ago
      Thank you for finding the relevant allegations. They certainly do sound more damning, though that's to be excepted if you take the prosecution at face value. This part jumps out: > the landlord’s regional manager Why would the owner of a property have a regional manager? That makes it sound like they're deliberately conflating local property managers with actual landlords. I suppose if the actual landlords are passive REIT investors, then there's still a possibility of actual collusion.
  - 2y ago
HelmetFigNewton 2y ago
Corporations buying up neighborhoods is a problem regardless of whether it applies in this case or not. Corporations don't die and turn their houses over to kids. Home ownership is widely regarded as the best way to build wealth, and corporate buy-ups are making an already difficult market permanently off-limits to millions of Americans. But are politicians acting on that? No. They're busy passing corrupt developer-handout legislation like CA's (recently struck-down) SB 9. We have a chance to stop this scourge before it's too late. Have you called your representatives about it?

by davidw 2y ago

bsder 2y ago

This doesn't apply in places like Austin where people just build further out. Rent is falling, but nowhere near as fast as it should be. These kinds of "algorithms" that are effectively "outsourced collusion" are the reasons why. Even worse, there is zero reason why these companies should exist except for "collusion as a service". Rental property pricing isn't rocket science. Set an occupancy target percentage and then adjust the price up or down to reach that target. The rental prices would then be responsive to the market conditions with absolutely no collusion whatsoever. But that won't do what the landlords want which is prevent the price from going down at all.

davidw 2y ago
If the algorithms are so good, why don't landlords in Houston use them to charge San Francisco prices? I think it's possible that RealPage adds a few percentage points to rents, and that's a bad thing. 1% over a bunch of rentals is a lot of money and harm to renters and that's worth suing over. That said, 1 or 2% here or there is no match for "supply and demand".
- bsder 2y ago
  You can see the difference in Austin in private equity owned apartments vs random houses or apartment buildings that predate that. The private equity development apartments are all in on RealPage and are in absolute lockstep with one another (they also have a whole host of dark patterns which I won't get into). So, it's not enough to have development, you have to have development that isn't private equity driven. The stuff that has a single owner is several hundred dollars cheaper and the differential is increasing. Some of this is age of the aprtment complex, but the age differential has been pretty small in areas where the university students drive demand. It's not just RealPage. For example, being able to eat the rental loss of unoccupied apartments is because private equity plays financing games and is willing to give up huge amounts of cash inflow in order to avoid paying any amount of cash outflow. However, RealPage is one of the legs of the stool.
- gimmeThaBeet 2y ago
  From the propublica about this last time, there was a lot of statements like this that stuck with me: > “Initially, it was very hard for executives to accept that they could operate at 94% or 96% and achieve a higher NOI by increasing rents,” Based on how multifamily operators refer to the software, it sounds like it was what they were doing before, just supercharged automation. But this was part where it seemed like the algorithm made a leap, that the optimal trajectory wasn't max occupancy.
  - chii 2y ago
    the thing is, you don't want to be the landlord that is vacant while other landlords are reaping the higher rental prices. So for anyone, they would just opt out of the algorithm and charge a slightly lower price when they get a vacancy. I really dont think cartels work in a market as competitive as real estate rentals. It's a scape goat at best imho.
    - bsder 2y ago
      > So for anyone, they would just opt out of the algorithm and charge a slightly lower price when they get a vacancy. The software itself makes this very difficult to do--it's one of their dark patterns.
refurb 2y ago
> Even worse, there is zero reason why these companies should exist except for "collusion as a service". That doesn't make a lot of sense. Take a market where there is 100% price transparency - cars, electronics - are a couple examples. As a manufacturer I can easily find out exactly what my competitors are charging and change my price at will. Is that collusion? The market is dependent on transparent pricing.

gedy 2y ago

Inflation?

davidw 2y ago
That's me in the picture of the hearing. 40 homes there, that have taken years to build because of NIMBY neighbors. That is the problem. Not Wall Street. Not some xenophobic "foreign buyers!". Not even short term rentals. It's zoning and NIMBYs and on top of that now, interest rates. The 'bogeyman' theories feel good because it means you don't have to face up to the reality of your neighors' NIMBYism. But they're wrong. It is your neighbors.
- whimsicalism 2y ago
  I agree with almost everything you’re saying but I do think short-term rentals and immigration are significant factors on the demand side.
  - davidw 2y ago
    It depends on the market - there are some really tiny destination towns. Moab, Utah, say, where short term rentals are more impactful.

jauntywundrkind 2y ago

Having an algorithm literally setting prices and literally forbidding rental properties from setting lower prices seems like a real cause of problems too? I agree there's a lot of other barriers to fixing housing! But the algorithmically-driven collusion here is off the wall crazy town. Zero accountability for what would have wrecked any entity doing the same a couple years ago.

Aunche 2y ago
AFAICT there isn't anything preventing landlords from setting pricing lower than what RealPage recommends. That is just Propublica's weasily framing. In reality, it sounds like they're saying, if you want to get the results from our recommendations, you actually need to follow our recommendations.
- narism 2y ago
  Realpage put many roadblocks in the way of customers using prices not provided by the system. A couple: Rent overrides required written business justifications, would often trigger follow ups to the agent attempting the override and then their management to dissuade them, and eventually might be refused in the end. Realpage monitored compliance of customers using their provided prices and those who didn’t meet a certain level would be kicked off the platform. Pages 17-22 here: https://oag.dc.gov/sites/default/files/2023-11/DC%20OAG%20RealPage%20Complaint%20-%20Filed.pdf https://oag.dc.gov/sites/default/files/2023-11/DC%20OAG%20Re...
  - Aunche 2y ago
    Thank you for finding the relevant allegations. They certainly do sound more damning, though that's to be excepted if you take the prosecution at face value. This part jumps out: > the landlord’s regional manager Why would the owner of a property have a regional manager? That makes it sound like they're deliberately conflating local property managers with actual landlords. I suppose if the actual landlords are passive REIT investors, then there's still a possibility of actual collusion.
- 2y ago

HelmetFigNewton 2y ago

Corporations buying up neighborhoods is a problem regardless of whether it applies in this case or not. Corporations don't die and turn their houses over to kids. Home ownership is widely regarded as the best way to build wealth, and corporate buy-ups are making an already difficult market permanently off-limits to millions of Americans. But are politicians acting on that? No. They're busy passing corrupt developer-handout legislation like CA's (recently struck-down) SB 9. We have a chance to stop this scourge before it's too late. Have you called your representatives about it?