3 ms·

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 "algor

by bsder 3y 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 3y 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 3y 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 3y 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 3y 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 3y 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.
      - chii 3y ago
        The software does not dictate you, because you can just leave it. Unsign up. Leave the contract. It's not like you signed ownership of the property to this software company. The only thing you lose is the ability to suss out the prices - the same position you were in previously.
        paulmd 3y ago
        the notional ability to leave the cartel doesn’t mean there isn’t anticompetitive cartel pressure in action. let alone the direct consequences of breaking the contract or any other adverse action resulting. idk why some people are so desperate to ignore the documented pressures here, like are people just completely opposed to the idea that cartels can exist without a notarized agreement to break the law? And apparently you literally don’t even think that is sufficient, because “you could just break the contract” or something lmao. the amount of openly bad-faith posting and commenting on HN has only continued to get worse and I have to think it’s partially due to the fact that it’s not supposed to be acknowledged. Such “suggestions” really only make it more potent as a weapon on a site/subculture that is already overly predisposed to rules-lawyering as a fallback when they lose an argument. increasingly realizing the guy whose site redirects referrers from HN to a nutsack is right.
refurb 3y 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.

by bsder 3y ago

davidw 3y 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 3y 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 3y 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 3y 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 3y 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.
    - chii 3y ago
      The software does not dictate you, because you can just leave it. Unsign up. Leave the contract. It's not like you signed ownership of the property to this software company. The only thing you lose is the ability to suss out the prices - the same position you were in previously.
      - paulmd 3y ago
        the notional ability to leave the cartel doesn’t mean there isn’t anticompetitive cartel pressure in action. let alone the direct consequences of breaking the contract or any other adverse action resulting. idk why some people are so desperate to ignore the documented pressures here, like are people just completely opposed to the idea that cartels can exist without a notarized agreement to break the law? And apparently you literally don’t even think that is sufficient, because “you could just break the contract” or something lmao. the amount of openly bad-faith posting and commenting on HN has only continued to get worse and I have to think it’s partially due to the fact that it’s not supposed to be acknowledged. Such “suggestions” really only make it more potent as a weapon on a site/subculture that is already overly predisposed to rules-lawyering as a fallback when they lose an argument. increasingly realizing the guy whose site redirects referrers from HN to a nutsack is right.

refurb 3y 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.