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To the best of my understanding I think the technology does drive up prices, but not in an anticompetitive way. I know people get really passionate about this,

To the best of my understanding I think the technology does drive up prices, but not in an anticompetitive way. I know people get really passionate about this, so I don't want to argue with people on hacker news about it, but to the best of my understanding this is what is happening: Rental prices in the USA keep going up primarily due to a housing shortage. Revenue optimization algorithms like realpage's do genuinely increase rents by about 2-5%, because without them fee-based property managers lower rents below market-clearing price in order to make it easier on themselves. The increased rent that comes from using these algorithms is, in my opinion, not really anti-competitive. If you only used public information for the pricing algorithm, you'd get largely the same prices out of the system. In almost all rental markets, algorithmic pricing of any sort doesn't have high enough market share to see success by anticompetitive price-fixing, since most suppliers of housing don't use it. Apartment rents are crazy high because there simply isnt enough housing, and we dont let people build enough dense housing near jobs. Going after Realpage, or blackrock, or landlords, or AirBnB is just trying to find a scapegoat, when the hard truth is we need to let people build more housing near where the jobs are.

claytonjy 2y ago
do we know roughly how common use of this or similar technologies are in various markets? I was under the impression this was quite common, though I have no evidence and would love to be shown otherwise!
- sleepybrett 2y ago
  If it is, they better be covering their tracks.
wh0knows 2y ago
This definitely requires some citations. There is no evidence that you are presenting that supports the 2-5% claim. I don’t think you are fully understanding the impact of price collusion or the suit presented here. The DOJ very clearly thinks this is anticompetitive.
- tqi 2y ago
  TBF your contention that the impact of price collusion also requires citations. And the DOJ has thought a lot of things, however their track record in court has been not exactly been stellar so I'm not sure how much of a signal that is. I suppose only time will tell.
- andrewmutz 2y ago
  Honestly the strongest argument I've heard that these algorithms are anticompetitive is "The DoJ thinks they are". So maybe there's some non-public information of anticompetitive behavior. We don't know how many housing units use Realpage pricing algorithms in 2024, but in 2017 when Realpage bought the tech, it was being used in 1.5 million rentals (https://www.realpage.com/news/realpage-to-acquire-lease-rent-options/ https://www.realpage.com/news/realpage-to-acquire-lease-rent...) and there were 43 million rentals in the US, which means nationally they had less than 4% marketshare. Obviously, cartel behavior (raising prices above market) does not work if you have 4% of the market. Perhaps their sales have gone up 20X in 7 years and they have enough market power for cartel behavior (doubtful)? Perhaps they have a low marketshare nationally, but they have a high marketshare in a few specific markets? Maybe, lets see what the DoJ says.
  - brandonfro 2y ago
    From the press release: "The complaint separately alleges that RealPage has unlawfully maintained its monopoly over commercial revenue management software for multi-family dwellings in the United States, in which RealPage commands approximately 80% market share."
    - andrewmutz 2y ago
      That’s 80% of companies who are using revenue management software are using Realpage, not that 80% of rental units are using Realpage revenue management software
      - sleepybrett 2y ago

claytonjy 2y ago

do we know roughly how common use of this or similar technologies are in various markets? I was under the impression this was quite common, though I have no evidence and would love to be shown otherwise!

sleepybrett 2y ago
If it is, they better be covering their tracks.

wh0knows 2y ago

This definitely requires some citations. There is no evidence that you are presenting that supports the 2-5% claim. I don’t think you are fully understanding the impact of price collusion or the suit presented here. The DOJ very clearly thinks this is anticompetitive.

tqi 2y ago
TBF your contention that the impact of price collusion also requires citations. And the DOJ has thought a lot of things, however their track record in court has been not exactly been stellar so I'm not sure how much of a signal that is. I suppose only time will tell.
andrewmutz 2y ago
Honestly the strongest argument I've heard that these algorithms are anticompetitive is "The DoJ thinks they are". So maybe there's some non-public information of anticompetitive behavior. We don't know how many housing units use Realpage pricing algorithms in 2024, but in 2017 when Realpage bought the tech, it was being used in 1.5 million rentals (https://www.realpage.com/news/realpage-to-acquire-lease-rent-options/ https://www.realpage.com/news/realpage-to-acquire-lease-rent...) and there were 43 million rentals in the US, which means nationally they had less than 4% marketshare. Obviously, cartel behavior (raising prices above market) does not work if you have 4% of the market. Perhaps their sales have gone up 20X in 7 years and they have enough market power for cartel behavior (doubtful)? Perhaps they have a low marketshare nationally, but they have a high marketshare in a few specific markets? Maybe, lets see what the DoJ says.
- brandonfro 2y ago
  From the press release: "The complaint separately alleges that RealPage has unlawfully maintained its monopoly over commercial revenue management software for multi-family dwellings in the United States, in which RealPage commands approximately 80% market share."
  - andrewmutz 2y ago
    That’s 80% of companies who are using revenue management software are using Realpage, not that 80% of rental units are using Realpage revenue management software
    - sleepybrett 2y ago