6 ms·

Both things can be true: * If this software system managed to add, say, 1% to hundreds or thousands of people's rents... that's a lot of money and the company

• ben_jones 2y ago
  > Housing prices are still set by supply and demand. You can't charge LA prices in Atlanta no matter what kind of fancy scheme you run. And yet the market can remain irrational longer then you can remain liquid. We do not live in a fair market.
  • davidw 2y ago
    What's unfair about the market is that it's mostly local "I've got mine" people shutting out the people who teach their kids, attend to them at the hospital, police their streets and so on, via things like zoning laws. It feels good to blame some big, far-off company but it's not where the bulk of the problem lies. That doesn't mean the company isn't gouging a bit though and if they are, fine, nail them.
• JumpCrisscross 2y ago
  > Housing prices are still set by supply and demand If the government's allegations are true, in markets where RealPage landlords control most of the rental supply, prices are not set by supply demand due to market failure. Given how expensive many cities make being a landlord, it makes sense there will be some where commercial landlords control most of the rental supply.
  • davidw 2y ago
    So why don't they use RealPage to jack up Atlanta rents to Los Angeles rent levels if they've cornered the market so much? They're leaving money on the table!
    • JumpCrisscross 2y ago
      > why don't they use RealPage to jack up Atlanta rents to Los Angeles rent levels if they've cornered the market so much? They'd make less money [1]. Demand for shelter is close to inelastic, but demand for shelter in Atlanta is not. Consider the extreme: they mandate rents of $1mm a month. Assuming no government interference, they might land a couple tenants at that price. But the vast majority would balk, thereby leaving them with less profit. [1] https://www.e-education.psu.edu/ebf200/node/247 https://www.e-education.psu.edu/ebf200/node/247
      • davidw 2y ago
        So, you're saying that supply and demand are indeed real with housing. You can realistically use something like this to maybe bump rents a bit, but you cannot use it to radically alter markets, because it is supply and demand that set market prices.
        • deleted 2y ago
          [deleted]
        • SoftTalker 2y ago
          They are using an uneven playing field to find the local profit maxima in rents and vacancies. They have insight into number of vacancies, time-on-market, etc. that individual renters and even landlords/property owners (absent collusion) do not have. They are coordinating this and providing collusion-as-a-service.
          • davidw 2y ago
            So that brings us back to my original comment, doesn't it.
• EasyMark 2y ago
  I agree with some of what you say, but to a lesser degree. However, we like to see garbage companies acting like this to be taken down and destroyed with extreme prejudice as a warning to others. Monopolies and cartels that abuse customers and raise prices should have the corporate veil pulled back and put on life support, if not get the chair. I don't really have any sympathy at all for these predatory tactics if what they say is true. I personally feel it should be criminal as well as civil.
• Hnrobert42 2y ago
  Haha. People want a bogeyman so bad, but really it’s this bogeyman.
• AnthonyMouse 2y ago
  > Both things can be true Another thing that can be true is that a company can be engaged in an illegal attempt to fix prices and still fail to raise prices, e.g. because they stupidly got half the landlords together to withhold units which only caused those landlords to have a higher vacancy rate while the other half got to enjoy a lower vacancy rate, leaving the average the same but costing the conspirators money because they had disproportionately more empty units. Attempting to fix prices is still illegal even if your attempt blows up in your face and costs you money instead.
• coldtea 2y ago
  >Housing prices are still set by supply and demand. You can't charge LA prices in Atlanta no matter what kind of fancy scheme you run. What you describe is the "price bracket" (say Atlanta vs LA, or good neighborhood in Atlanta vs bad neighborhood in Atlanta). Sure, you can't do that. But the actual price has a lot of wiggle room inside that bracket, and apparently the final price is not (always) set by supply and demand, but (in cases such as this) by big landlords doing colluding price-fixing instead of competition. The demand not being very elastic, many will pay a little more, but only because unhealthy collusion has made options for less dissapear.
• Aurornis 2y ago
  > Housing prices are still set by supply and demand. You can't charge LA prices in Atlanta no matter what kind of fancy scheme you run. That’s missing the point of collusion. The point of collusion and price fixing is to break the market and prevent supply and demand from getting to natural equilibrium. This type of collusion is real. Years ago several big tech companies were caught colluding to keep wages down. The demand for engineering talent was there, the supply was limited, but they agreed to not poach each other’s employees. After that was broken up, wages went up. Supply and demand only works when the market isn’t under substantial collusion.
  • gowld 2y ago
    "supply and demand" is price's effect on supply and demand, not supply and demand's effect on prices. https://www.investopedia.com/terms/l/law-of-supply-demand.asp https://www.investopedia.com/terms/l/law-of-supply-demand.as...
• spaceman_2020 2y ago
  > Housing prices are still set by supply and demand The "market" is not real and hasn't been in years, and tech has 100% helped destroy it. Cartelization used to be difficult because it was tough getting all market participants on the supply side on the same page. Tech makes it way easier. Before things like RealPage and social media, if you wanted to collude with 100 other landlords in the area, you'd have to somehow set up meetings with all of them. Now that's just a small slack group. Or software like RealPage
  • davidw 2y ago
    Why is housing so much cheaper in Houston than Los Angeles, then?
• matt-p 2y ago
  From the supply side NIMBY attitude is clearly a major problem. However that's looking at it in complete isolation, vast majority of population growth has come from Immigration, so it would be just as one sided to say "The bogeyman is mostly immigrants" Just to be super clear I'm arguing against one sided statements and not (legal) immigration which I don't have a problem with. However our politicians cannot allow population growth without also providing housing and infrastructure growth otherwise we end up here.
  • fragmede 2y ago
    One interesting cultural thing at a company I worked for was to not say "no", and instead say"yes, but have you considered..." Restricting immigration and reproductive rights is not going to go well, politically, but pointing out that it is seems there's a need to be some sort of overarching plan to actually absorb X number of people into a system with a carrying capacity of Y number of people, especially because it seems "the market" hasn't been able to solve that, given how widespread the housing crisis seems to be (though I'm biased because I live in one such region). Cities do have urban planners drafting capital improvement plans(CIP) (usually), but I don't know how much top down directives are involved to say the plan must include plans to increase housing by X%, especially when X can't actually be planned for.
    • matt-p 2y ago
      Completely agree; it's great to allow it but we need to grow housing and infrastructure to match it - right now we also need to 'catch-up' for the years we failed to. By the way reproduction is not driving growth in most of the US or Western Europe, immigration is and that is fine but politicians plan, quota and set criteria for legal immigration, they've not really got the same control of reproduction rates. They know what housing demand will be, since they set and control it, so why do they restrict and frustrate supply (house building)? It's like they've either a vested interest, or building supply is more unpopular than house price increases and eventually homelessness.
• nox101 2y ago
  I'm not sure I agree. If one company is setting all the prices then you're forced to pay that price since there is no supply at a lower price. In a normal situation, landlords don't have perfect info and so will set prices differently. But if one company controls most of the market they do have perfect information and can raise all prices together. LA is out of control. Average price on the west side is $3800 (vs SF which is $3200). I don't know how anyone affords that except a few lawyers and FAANG employees. It's so bad, landlords are able to rent out bedrooms in shared apartments for $2500-$3500 a month. https://losangeles.craigslist.org/search/apa?query=co-living#search=1~gallery~0~0 https://losangeles.craigslist.org/search/apa?query=co-living... Also, while NIMBYs might be part of the problem there is no room on LA's roads for more cars for more people. They'd need Tokyo level of trains to make it work and at the pace they're building it will be 200yrs before they get there, if ever.
  • HPsquared 2y ago
    I wonder what fraction of the population actually pays those rents. It seems unbelievable. That's more than the average income in most Western countries.
    • ajsnigrutin 2y ago
      Yep... and also, how much do companies there actually pay people? If you pay that much for rent, and still decide to stay there, are the wages so high, that it's worth it? An average couple would have to earn at least a few $k more per month there, than in other places with more reasonable rent prices.
• worewood 2y ago
  Supply and demand don't exactly work on an inelastic market like rent. You can't wait until find an acceptable price, you need a roof today. You can't accumulate, so you only look for rent when you don't have one and NEED one. Landlords, on the other hand, can accumulate, and leave properties empty, sometimes for years, until someone desperate enough arrives. Rent is not grain where they must sell it by a deadline or it goes bad. It's a market disproportionately skewed in favor of the landlords.
  • indymike 2y ago
    > Supply and demand don't exactly work on an inelastic market like rent. I used to set my properties rent to be competitive with the other rentals in the area. In would vary a lot - sometimes more sometimes less. At this point there are so many companies setting price with subscription services that prices always go up. > Landlords, on the other hand, can accumulate, and leave properties empty, In a healthy market this strategy will leave small landlords bankrupt. The problem right now is that the small landlords can play along with big property management companies on price collusion.
• washadjeffmad 2y ago
  Supply and demand often becomes the "states' rights" argument in any sufficiently complex economic discussion. This isn't about supply and demand.