5 ms·

San Francisco to Ban Rent-Setting Software Amid Gouging Worry

32 points by mschnell 2y ago

burkaman 2y ago
Here is the law: https://sfgov.legistar.com/View.ashx?M=F&ID=13157163&GUID=BC67A1E5-F3C7-4EF9-929A-46203D6E63B1 https://sfgov.legistar.com/View.ashx?M=F&ID=13157163&GUID=BC... This only bans software that uses "Non-public competitor data" to set rents. You could still sell a product that just scrapes apartment websites to find the average rent in a neighborhood, for example, you just can't blatantly collude with other landlords anymore.
- 0_____0 2y ago
  Doing anything that actually solves the problem is too hard, so let's do something that sounds good but does nothing. California politicians make a big show of sounding progressive, when the outcomes they generate worsen inequality. Ibram X Kendi writes about this - policy that results in racist outcomes is racist, regardless of the tone its creators take.
- nerdjon 2y ago
  I wonder if they could get around the non-public part if they themselves made the data freely available. If for example, they collected the data from the apartments they manage but the data was available on their site. I don't see anything here (but I only skimmed quickly) that specifically states the source of the data. So basically realizing that it is better that they exist and have this data than to try to spite their competitors. Since I imagine without this data their value goes down. So while they may be helping their competitors get data, their competitors are also helping them and then each company survive on their algorithm and contracts.
  - burkaman 2y ago
    Sure, I think that would be great for everyone. As a renter I would love to have access to more public data to help me negotiate against my landlord's greed.
SoftTalker 2y ago
Ignoring the elephant in the room which is that by their own doing the housing supply is woefully inadequate.
- janalsncm 2y ago
  Sure, but if you have this kind of underlying issue any extra supply will be eaten up. And that’s after spending a long time and a lot of money to build new housing. Places that use RealPage saw big increases in rent even if their supply wasn’t as constrained as SF.
  - SoftTalker 2y ago
    Unless you have people willing to sit with unrented houses, no it won't. Some big rental owners might be able to afford that but the guy with one or two rentals he manages himself cannot afford to let them sit empty. RealPage may maximize rents but the maximums will be lower if there is more supply.
    - falcolas 2y ago
      Over half of the for-profit rental stock in the US is owned by people or companies with over 25 units. And they are more than happy to let empty units stay empty if it will keep the value of their other units high. It's not the "1-2 house landlords" driving prices up. https://www.pewresearch.org/short-reads/2021/08/02/as-national-eviction-ban-expires-a-look-at-who-rents-and-who-owns-in-the-u-s/ https://www.pewresearch.org/short-reads/2021/08/02/as-nation... "Individual investors owned nearly 14.3 million of those properties (71.6%), comprising almost 19.9 million units (41.2%). For-profit businesses of various sorts owned 3.7 million properties, or 18.8%, but their holdings totaled 21.7 million units, or 45% of the total. Entities such as housing cooperative organizations and nonprofits owned smaller shares of the total."
      - SoftTalker 2y ago
        If true I guess one way to address that is to tax vacant rental units so there's a penalty for leaving them vacant. That seems to me to be hard to administer though.
Eumenes 2y ago
Another one to look into banning is appraisal/assessment software. Municipalities pay third parties to get new values for homes, often doubling/tripling residents annual property taxes.
- cpursley 2y ago
  The 3rd parties don't control the inputs.
- kspacewalk2 2y ago
  If you publicly decide on your assessment criteria (sqft, pools, #bedrooms, garage size, etc. etc.), and then use software to help you assign the fair assessed value to each property, how is this a problem? Were some homeowners able to use inefficiencies in how assessments are done to fly under the radar with much lower assessments than their property warrants, and then cry foul when their assessments (and property taxes) double or triple in order to make them fair and consistent? If so, that's a tax loophole closed, not an injustice.
  - Eumenes 2y ago
    Assessments should be done when a home is sold, not based off speculative real estate market. This hurts everyone, esp those on fixed incomes.
    - kspacewalk2 2y ago
      Okay, maybe I'm making unwarranted assumptions that assessments are done the same everywhere, and property taxes are decided on the same way everywhere. Here's how it's done in Ontario where I live: 1. Assessed value ≠ market value. Assessed value is determined by some criteria such that sqft, #rooms, desirability of neighbourhood, pools, etc correlate with the final value. 2. Actual value doesn't matter at all. If everyone's assessed values go up 10% in the municipality, property tax bills change by $0. What matters is the relative assessed values. They determine how much of a city's tax bill the household pays. 3. The actual process for determining the tax bill: city comes up with a total figure to be collected. City sums all assessed values of all properties. Divide former by latter to get a multiplier (e.g. 1.355%). That multiplier times assessed value is your property tax. (It's a bit more complicated because they collect slightly different amounts from different property types). Is it different in California?
whalesalad 2y ago
How is this enforced? Honor system? I feel like this is unenforceable.
deleted 2y ago
[deleted]
blackhawkC17 2y ago
People don't like taking responsibility, so they'll blame an external source instead of tackling the underlying issue—the lack of new housing supply. The same story applies to most booming cities, both in the first world and third world. They'll always blame "greedy landlords," expats, private equity, tourists, and whatever the latest boogeyman is.
- janalsncm 2y ago
  Usually any trend is the result of a confluence of factors. There are probably a dozen reasons why rents are up in any particular city. It seems that constrained supply and consolidation in real estate companies are two causes. Both cause upward pressure individually, but together have an even more powerful effect.
ChrisArchitect 2y ago
[dupe] https://news.ycombinator.com/item?id=41133143 https://news.ycombinator.com/item?id=41133143

32 points by mschnell 2y ago

Here is the law: https://sfgov.legistar.com/View.ashx?M=F&ID=13157163&GUID=BC67A1E5-F3C7-4EF9-929A-46203D6E63B1 https://sfgov.legistar.com/View.ashx?M=F&ID=13157163&GUID=BC... This only bans software that uses "Non-public competitor data" to set rents. You could still sell a product that just scrapes apartment websites to find the average rent in a neighborhood, for example, you just can't blatantly collude with other landlords anymore.

0_____0 2y ago
Doing anything that actually solves the problem is too hard, so let's do something that sounds good but does nothing. California politicians make a big show of sounding progressive, when the outcomes they generate worsen inequality. Ibram X Kendi writes about this - policy that results in racist outcomes is racist, regardless of the tone its creators take.
nerdjon 2y ago
I wonder if they could get around the non-public part if they themselves made the data freely available. If for example, they collected the data from the apartments they manage but the data was available on their site. I don't see anything here (but I only skimmed quickly) that specifically states the source of the data. So basically realizing that it is better that they exist and have this data than to try to spite their competitors. Since I imagine without this data their value goes down. So while they may be helping their competitors get data, their competitors are also helping them and then each company survive on their algorithm and contracts.
- burkaman 2y ago
  Sure, I think that would be great for everyone. As a renter I would love to have access to more public data to help me negotiate against my landlord's greed.

SoftTalker 2y ago

Ignoring the elephant in the room which is that by their own doing the housing supply is woefully inadequate.

janalsncm 2y ago
Sure, but if you have this kind of underlying issue any extra supply will be eaten up. And that’s after spending a long time and a lot of money to build new housing. Places that use RealPage saw big increases in rent even if their supply wasn’t as constrained as SF.
- SoftTalker 2y ago
  Unless you have people willing to sit with unrented houses, no it won't. Some big rental owners might be able to afford that but the guy with one or two rentals he manages himself cannot afford to let them sit empty. RealPage may maximize rents but the maximums will be lower if there is more supply.
  - falcolas 2y ago
    Over half of the for-profit rental stock in the US is owned by people or companies with over 25 units. And they are more than happy to let empty units stay empty if it will keep the value of their other units high. It's not the "1-2 house landlords" driving prices up. https://www.pewresearch.org/short-reads/2021/08/02/as-national-eviction-ban-expires-a-look-at-who-rents-and-who-owns-in-the-u-s/ https://www.pewresearch.org/short-reads/2021/08/02/as-nation... "Individual investors owned nearly 14.3 million of those properties (71.6%), comprising almost 19.9 million units (41.2%). For-profit businesses of various sorts owned 3.7 million properties, or 18.8%, but their holdings totaled 21.7 million units, or 45% of the total. Entities such as housing cooperative organizations and nonprofits owned smaller shares of the total."
    - SoftTalker 2y ago
      If true I guess one way to address that is to tax vacant rental units so there's a penalty for leaving them vacant. That seems to me to be hard to administer though.

Eumenes 2y ago

Another one to look into banning is appraisal/assessment software. Municipalities pay third parties to get new values for homes, often doubling/tripling residents annual property taxes.

cpursley 2y ago
The 3rd parties don't control the inputs.
kspacewalk2 2y ago
If you publicly decide on your assessment criteria (sqft, pools, #bedrooms, garage size, etc. etc.), and then use software to help you assign the fair assessed value to each property, how is this a problem? Were some homeowners able to use inefficiencies in how assessments are done to fly under the radar with much lower assessments than their property warrants, and then cry foul when their assessments (and property taxes) double or triple in order to make them fair and consistent? If so, that's a tax loophole closed, not an injustice.
- Eumenes 2y ago
  Assessments should be done when a home is sold, not based off speculative real estate market. This hurts everyone, esp those on fixed incomes.
  - kspacewalk2 2y ago
    Okay, maybe I'm making unwarranted assumptions that assessments are done the same everywhere, and property taxes are decided on the same way everywhere. Here's how it's done in Ontario where I live: 1. Assessed value ≠ market value. Assessed value is determined by some criteria such that sqft, #rooms, desirability of neighbourhood, pools, etc correlate with the final value. 2. Actual value doesn't matter at all. If everyone's assessed values go up 10% in the municipality, property tax bills change by $0. What matters is the relative assessed values. They determine how much of a city's tax bill the household pays. 3. The actual process for determining the tax bill: city comes up with a total figure to be collected. City sums all assessed values of all properties. Divide former by latter to get a multiplier (e.g. 1.355%). That multiplier times assessed value is your property tax. (It's a bit more complicated because they collect slightly different amounts from different property types). Is it different in California?

whalesalad 2y ago

How is this enforced? Honor system? I feel like this is unenforceable.

deleted 2y ago

[deleted]

blackhawkC17 2y ago

People don't like taking responsibility, so they'll blame an external source instead of tackling the underlying issue—the lack of new housing supply. The same story applies to most booming cities, both in the first world and third world. They'll always blame "greedy landlords," expats, private equity, tourists, and whatever the latest boogeyman is.

janalsncm 2y ago
Usually any trend is the result of a confluence of factors. There are probably a dozen reasons why rents are up in any particular city. It seems that constrained supply and consolidation in real estate companies are two causes. Both cause upward pressure individually, but together have an even more powerful effect.

ChrisArchitect 2y ago

[dupe] https://news.ycombinator.com/item?id=41133143 https://news.ycombinator.com/item?id=41133143