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>> But the price-fixing amongst "competing" landlords is where it goes wrong. I would bet they're spreading the empty units around too, so no landlord ends up

>> But the price-fixing amongst "competing" landlords is where it goes wrong. I would bet they're spreading the empty units around too, so no landlord ends up with all the empty ones.

gruez 2y ago
Wouldn't that happen organically? The underlying principle of "you want to leave a certain % of your units empty to maximize profits" is microeconomics 101 and doesn't require any coordination between landlords. Without realpage there will probably be a "rule of thumb" to follow, which most landlords will use. They'll in turn set their prices to hit that number, thereby ensuring that the empty units are spread around evenly.
- mjcl 2y ago
  Correct, and even YieldStar has a customer-set vacancy and lease expiration targets that it works towards. RealPage trains the customers to accept a little more vacancy to gain higher lease pricing.
  - lotsofpulp 2y ago
    Which can be corrected via property taxes that increase at increasing rates for the time period that any given property remains unused, including non residential rentals. Landowners get the biggest subsidy of all in the US, where they pay proportionally very little to the local government’s operational costs, and benefit the most from the law and order, judiciously systems, and education of the local populace. And instead of going after landowners for reaping the rewards of sitting on unproductive uses of land that everyone has to spend extra time and energy to travel around, the government even gives them tax breaks (1031 exchange, property tax caps), and instead goes after people who actually perform work (income tax).
    - erik_seaberg 2y ago
      The optimal vacancy rate isn't zero, renters (and relocating homeowners) need to be able to move and to reject bad landlords.
      - lotsofpulp 2y ago
        The property tax rate function can easily be formulated such as a continuous power law function such that short periods of vacancy are not penalized.
        RhysU 2y ago
        "Easily" did a lot of work in your reply. What's the right period of vacancy to allow for 1, 2, 3, and 4-bedroom units as a function of floor level, direction faced, time of year, elevator or not, age of building, distance to school and transit, etc?
        lotsofpulp 2y ago
        Why does all of that stuff matter to society? The unit can provide utility as long as it is fit to live in. The only question is what price people are willing to pay for it. We can even generously set it at 1 year just to start things off. If landlords are still too comfortable keeping units empty for the sole purpose of holding out for another price, then it can be revised lower.
      - techdragon 2y ago
        You have the problem backwards. We shouldn’t care what the vacancy rate is for residential properties at least, we should be focused on minimising the percentage of the population who are “seeking but unable to find housing” and yes that is deliberately constructed to avoid dragging the whole cycles and causes of homelessness into the mix. If you are actively trying to get some kind of dwelling, buying or renting, and have not yet managed to do so, then you count for the statistics. Speculation driven rises in residential real estate prices buy/rent are a plague on society and we need to stop framing the problem so that we lose sight of the purpose of housing, it’s to house people…
- cyanydeez 2y ago
  Even if they're not colluding, they are acting in a antisocial manner in that they're maximizing profit and not occupancy. If they were a utility, this would resemble selling all your water to las Vegas because they could pay the most and not selling to anyone else even if las vegas' usage drops. Sidelining things to artificially create scarcity is bad for everyone.

>> But the price-fixing amongst "competing" landlords is where it goes wrong. I would bet they're spreading the empty units around too, so no landlord ends up with all the empty ones.

gruez 2y ago

Wouldn't that happen organically? The underlying principle of "you want to leave a certain % of your units empty to maximize profits" is microeconomics 101 and doesn't require any coordination between landlords. Without realpage there will probably be a "rule of thumb" to follow, which most landlords will use. They'll in turn set their prices to hit that number, thereby ensuring that the empty units are spread around evenly.

mjcl 2y ago
Correct, and even YieldStar has a customer-set vacancy and lease expiration targets that it works towards. RealPage trains the customers to accept a little more vacancy to gain higher lease pricing.
- lotsofpulp 2y ago
  Which can be corrected via property taxes that increase at increasing rates for the time period that any given property remains unused, including non residential rentals. Landowners get the biggest subsidy of all in the US, where they pay proportionally very little to the local government’s operational costs, and benefit the most from the law and order, judiciously systems, and education of the local populace. And instead of going after landowners for reaping the rewards of sitting on unproductive uses of land that everyone has to spend extra time and energy to travel around, the government even gives them tax breaks (1031 exchange, property tax caps), and instead goes after people who actually perform work (income tax).
  - erik_seaberg 2y ago
    The optimal vacancy rate isn't zero, renters (and relocating homeowners) need to be able to move and to reject bad landlords.
    - lotsofpulp 2y ago
      The property tax rate function can easily be formulated such as a continuous power law function such that short periods of vacancy are not penalized.
      - RhysU 2y ago
        "Easily" did a lot of work in your reply. What's the right period of vacancy to allow for 1, 2, 3, and 4-bedroom units as a function of floor level, direction faced, time of year, elevator or not, age of building, distance to school and transit, etc?
        lotsofpulp 2y ago
        Why does all of that stuff matter to society? The unit can provide utility as long as it is fit to live in. The only question is what price people are willing to pay for it. We can even generously set it at 1 year just to start things off. If landlords are still too comfortable keeping units empty for the sole purpose of holding out for another price, then it can be revised lower.
    - techdragon 2y ago
      You have the problem backwards. We shouldn’t care what the vacancy rate is for residential properties at least, we should be focused on minimising the percentage of the population who are “seeking but unable to find housing” and yes that is deliberately constructed to avoid dragging the whole cycles and causes of homelessness into the mix. If you are actively trying to get some kind of dwelling, buying or renting, and have not yet managed to do so, then you count for the statistics. Speculation driven rises in residential real estate prices buy/rent are a plague on society and we need to stop framing the problem so that we lose sight of the purpose of housing, it’s to house people…
cyanydeez 2y ago
Even if they're not colluding, they are acting in a antisocial manner in that they're maximizing profit and not occupancy. If they were a utility, this would resemble selling all your water to las Vegas because they could pay the most and not selling to anyone else even if las vegas' usage drops. Sidelining things to artificially create scarcity is bad for everyone.