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Canadian mega landlord using AI 'pricing scheme' as it hikes rents
- Findeton 2y ago25b in assets, so that's less than 0.1% of all properties in Canada. And they say they're rigging prices? How so?
- loktarogar 2y agoimagine they had 100m in assets. 100m is either 333 houses priced at 300k or 1 building priced at 100m. On top of that, owning 333 houses in 1 neighbourhood is very different to owning 1 house each in 333 neighbourhoods.
- makeitdouble 2y ago> 0.1% of all properties How do you convert an amount of money into a number of registered properties ?
- IntelMiner 2y ago[flagged]
- WorkerBee28474 2y agoYou divide it by the valuation of all real estate and get a percentage of all properties by value (not count). I think the GP used ~6.1 trillion as that value, or maybe some number related to rental stock valuation. The <0.1% looks approximately correct.
- makeitdouble 2y agoSo, basically he didn't land on a count. I'm not sure why we should care about the share of money they command, as it could have nothing to do with whether they're dominant or not, depending on how skewed the market it. PS: to note, I was commenting on the process, but on the deeper point, Dream Unlimited is only one of the company caught in this, so we could have any number of other developpers roped in at a later date. I think we really don't have any idea how widespread the issue is.
- refurb 2y agoYou dont need to, it cancels out on both sides of the equation. Pick any number for average cost of a property, and its still only 0.1% of all properties.
- makeitdouble 2y agoIf you had a distribution of prices, or even at least a median price I'd see it. But averaging it all tells us almost nothing.
- brigadier132 2y agoThey are using software that acts as a middleman / coordinator across a bunch of different landlords to fix prices
- vlovich123 2y agoUsing RealPage software which is a Texas company that gathers information from landlords to then recommend prices that the landlords should then use. So it’s not so much the company itself optimizing based on its own data but the argument goes, at least per the antitrust lawsuit against RealPage, that the landlords are all colluding together via an intermediary.
- davidw 2y agoIf they are really good at colluding, why are prices higher in LA than in Houston? I think RealPage and similar systems probably add a few percentage points to rents - and if you consider how much money that is across 1000's of renters, it's worth suing them over. But supply and demand are still the gorilla in the room.
- vlovich123 2y agoFor one, LA is generally a more wealthy area which means it can support higher rents. For another, it depends on the utilization rate of the software in a locale. And finally, let’s say it raises rents by 10% — if rents started out higher in LA they would remain higher. I really don’t understand your question. Yes supply and demand are the gorillas, but pricing collusion like this has always generally been illegal regardless of the size of the effect so I don’t understand your point.
- TheRealPomax 2y agoAll the other comments aside, the idea that less than 0.1% but more than 0.01% is somehow "not a lot" when 100% is an entire country is baffling. You know that even fractional percentages translates to huge absolute numbers when you're starting with millions, right? If you see "it only inconveniences forty thousand people" and think "well yeah, it's only forty thousand, that's a small number", you don't understand numbers. Even at just over 0.01%, that's five thousand lives being controlled to the point of being held hostage by one company. No Canadian should accept that as "this is fine and normal and fair".
- andrewjl 2y agoProperty markets are usually segmented locally. A real estate portfolio with that valuation can move the needle in a city or neighborhood.
- deisteve 2y agoive lost all faith in my own country. there is no leadership, no rules, no regulation. UN called Canada a "modern serfdom with slavery"
- stonethrowaway 2y agoWait till you find out what they did with the natives. And then there was no one left to speak for you.
- deleted 2y ago[deleted]
- deisteve 2y agoI'm not sure what that has to do with this thread.
- voisin 2y agoI think the poster is saying that a society that is fine both perpetrating and turning a blind eye toward the kinds of atrocities (I don’t think I am exaggerating with this word choices) toward the indigenous population for decades, is also going to be the kind of society that is callous at best about the plight of the average working Joe. This is a country built for the elites and there is zero compassion for anyone else unless they serve those elites.
- b112 2y agoWhat a horrible, horrible rendition of events, predicated upon misinterpreted actions. Modern Canada has not turned a "blind eye". I accept absolutely no blame, none, nada for a single thing any ancestor of mine has done. None. I am not responsible for anything my ancestors have done. The federal goverments covering multiple parties over the last few decades have poured money into settlements, investigating claims, resolving issues. I agree with settling claims if there was a contract, otherwise not. All over the planet, in every single country that exists, people are on "other people's land". There is not a single place free of this, anywhere. You only need go back far enough to discover "someone else was here". It should be noted that this also holds true for virtually all natives in Canada today. All took land from prior waves of settlers, and all warred against one another for land and resources. To somehow claim or believe that no war, to strife, to taking of others land occurred before that "horrible horrible white man" showed up is a fist full of lies. In terms of "atrocities", there has never been "mass graves" found in Canada, ever. Please differentiate between "suspected" and "we've validated that suspicion". It should be noted that for mass graves, there are federal funds given to native communities to investigate any such claims, millions being spent this very moment, yet again -- never, ever been found. The issues with the church abusing natives in the past is a sad, and indeed horrible event. Yet one must view this in the optics of ALL societies at this time. It was done with an intent to help, not hurt. Again, it was wrong, but the motive was not intended as such. And to put this in perspective, look at what happened to white Canadian children placed in the care of the church. Ever hear of priests raping young boys? Of orphanages beating young children? This happened to white people as well, and while none of it was right, to native or to white, my point is that it happened to us too. And if you think that's it, Google the "home children". An example being that my great-great grandfather died during WWI, resulting in his wife and children being without a provider. Mores being as they were back then, this meant the wife had two choices, put the children up for adoption, as they would all starve otherwise, and then remarry -- for no man would take another's children back then. This is how war heroes were treated in the early 20th. Thanks for your life, your wife and children are now screwed. Thus my grandfather was eventually shipped out indentured, which is on the edge of slavery, to Canada from the UK. My greatuncle was shipped to Australia. My great-aunts, unknown. To this day we have no idea where our family is in the world, or even if they survived. Some home children were treated atrociously, starving conditions, raped, beat, and more. To run meant the law would catch you and bring you back. My grandfather was "lucky", in that he was only worked 18 hours a day as a youth, and being a farm he had food. But that farmer bought my grandfather's contract, and had him until 18. You may say "So what", but my point here is this was the world of the time. And you may say that Canada is a horrible country, but from my perspective screw you. Look at the world today, where more than 1/2 of it are committing acts that are far, far more barbarous than anything done 100+ years ago in Canada. And for the last decades we've been working towards resolution. Canada is not perfect, but it a light of glowing enlightenment compared to the rest of the world. I'm sure you're going to come back with "But, this happened!" and yes some of it likely did. But is it happening today? Are you seriously trying to claim people aren't aware today? Are you seriously trying to say the billions upon billions spent in the last few decades aren't an attempt to try to fix things?
- 2Gkashmiri 2y agoi dont understand why use "ai" in context of a landlord trying to increase rent. what happened to "you paid $100 last year. now from january you pay $120 or vacate?"
- deleted 2y ago[deleted]
- jffry 2y agoThe complaint outlined in the article is that landlords fed confidential data into Realpage, then used its recommendations to effectively launder price collusion through "AI".
- cute_boi 2y agoAnd you have to pay application fee so that landlords can fed confidential data into Realpage.
- 2Gkashmiri 2y agolike what confidential data? i dont get the premise. you have 10 apartments and they are priced at say $1000/month. whats so confidential about that? or are you saying the AI is fed with tenant data to see which tenant is more viable to pay more rent based on income et al? like dynamic pricing? holy fuck
- jffry 2y agoAccording to the DOJ [1], no, however landlords were sharing non-publicly-accessible information about all of their units whether or not they were on the market. Rent, discounts, rent term, lease status, and "the number of potential future renters who have visited a property or submitted a rental application." [1] https://www.justice.gov/opa/media/1364976/dl?inline https://www.justice.gov/opa/media/1364976/dl?inline
- Enginerrrd 2y agoBecause doing it algorithmically may allow for market manipulation and monopolistic pricing schemes, particularly if competitors are effectively coordinating price changes via a 3rd party.
- dools 2y agoIf the seller is able to unilaterally hike rents beyond the level which people are willing to pay but they pay it anyway because the alternative is total life failure, then it's obviously not a functioning market.
- refurb 2y agoIm not sure i understand how AI matters here. If rents are paid no matter what, you dont need AI to tell you to set it high. But we know rents arent limitless because ability to pay is not limitless.
- slg 2y ago>Im not sure i understand how AI matters here. It says it right in the article's subtitle: >Software the U.S. government says is illegal gives landlords ability to coordinate rent hikes. The AI (in this instance "AI" just means "a blackbox algorithm") is basically an excuse to provide plausible deniability on market collusion. Combine this with the relatively inelastic nature of the demand for housing, it creates an avenue for abuse. Without the AI, you don't have collusion meaning increased competition will produce a lower and fairer market price.
- refurb 2y agoBut the point stands. If rents are inelastic, you dont need collusion? You just charge as much as you want?
- dools 2y agoI think perhaps one of the issues might be that price hikes would be more readily co-ordinated across regions. As such, a system that knows it is putting up prices in an area from which people will likely move, can simultaneously recommend putting up prices in the area to which those people would otherwise have moved to escape higher prices.
- slg 2y ago
- anileated 2y agoThe event horizon of ML offers much potential for “disruption” across the various markets. (I bet there will be products that actually do not do significant ML at this scale but claim they “do AI” if it lets them claim that it is transformative magic and not price collusion/copyright laundering/next thing.) Of course, if your pricing assistant is trained on pricing & occupancy data across all landlords, you and other users are obviously colluding. Apparently, though, you can successfully pretend you are not colluding. “AI told me to raise prices” and as we observe with copyright laundering so far legal system does not care what AI ingested. Inputs magically disappear into the black box of magic. Dare not think otherwise lest Nvidia tanks.
- ars 2y ago"“Everything starts at like $2,200 for a new place in Toronto, or even the old ones, if they’re renovated units,” she said, noting that her monthly take-home income is $3,100." The article blames "AI" for raising rents, and then later says, "well actually, everyone raised rents". You can have all the AI in the world, and even all the collusion you can manage, but competition still exists, raise rent to the point that people won't rent, you'll have an empty apartment. Lower it (i.e. ignore the collusion) and you'll fill that spot. The law of Supply and Demand still works. The only kind of collusion that might break that law is if landlords are forced by the agreement not to lower rent to compete. It's really very simple: What's the vacancy rate? If it's low, prices are going up, it's as simple as that. Forget the boogeyman (AKA AI), build more houses.
- zahlman 2y ago> The law of Supply and Demand still works. The problem is on the supply side. It happens because of zoning restrictions. There actually is plenty of housing nationwide, but that isn't really usable because moving involves quite a bit of friction, as well as because of general market failures. https://www.youtube.com/watch?v=3RSwkXbjaE0 https://www.youtube.com/watch?v=3RSwkXbjaE0 And because it's constantly talked about by activists: rent control doesn't work. It actually reduces supply (because people who would offer apartments at the top end of the market drop out of the market) and liquidity (because people who do and don't already have a lease are treated differently). This is one of the best agreed-upon results in economics. https://www.nmhc.org/research-insight/research-notes/2023/rent-control-vs-rent-stabilization-a-new-name-for-a-failed-concept/ https://www.nmhc.org/research-insight/research-notes/2023/re... , among countless other links a basic search might turn up.
- cortesoft 2y agoWell, RealPage was sued for violating antitrust laws for helping landlords collude on price: https://www.bloomberg.com/news/articles/2024-08-23/thoma-bravo-s-realpage-sued-by-us-in-rental-collusion-case https://www.bloomberg.com/news/articles/2024-08-23/thoma-bra... The complaint states: > Across America, RealPage sells landlords commercial revenue management software. RealPage develops, markets, and sells this software to enable landlords to sidestep vigorous competition to win renters’ business. Landlords, who would otherwise be competing with each other, submit on a daily basis their competitively sensitive information to RealPage. This nonpublic, material, and granular rental data includes, among other information, a landlord’s rental prices from executed leases, lease terms, and future occupancy. RealPage collects a broad swath of such data from competing landlords, combines it, and feeds it to an algorithm. Based on this process and algorithm, RealPage provides daily, near realtime pricing “recommendations” back to competing landlords. These recommendations are based on the sensitive information of their rivals. But these are more than just “recommendations.” Because, in its own words, a “rising tide raises all ships,” RealPage monitors compliance by landlords to its recommendations. RealPage also reviews and weighs in on landlords’ other policies, including trying to—and often succeeding in— ending renter-friendly concessions (like a free month’s rent or waived fees) to attract or retain renters. A significant number of landlords then effectively agree to outsource their pricing function to RealPage with auto acceptance or other settings such that RealPage as a middleman, and not the free market, determines the price that a renter will pay. Competing landlords choose to share their information with RealPage to “eliminate the guessing game” about what their competitors are doing and ultimately take instructions from RealPage on how to make business decisions to “optimize”—or in reality, maximize—rents.
- metrognome 2y agoI live in an apartment complex that uses RealPage. My roommates and I re-signed the lease earlier this year, with a projected 15% rent price increase. We then walked to our leasing office to ask about it, they simply cancelled the increase. We're now paying the same rate we were last year. I am fairly certain that 15% increase was the automatic recommendation by RealPage.
- thisisnico 2y agoIt may have been an illegal increase, any apartment built before 2018 in Ontario is subject to rent control, 2.5% was the max this year. RealPage would only have an affect on new leases with new apartments. Your lease does not renew, it automatically goes month to month. They can't cancel a lease, they would need a reason to evict and apply for it at the LTB.
- metrognome 2y agoI live in California.
- cwilby 2y agogross
- deleted 2y ago[deleted]
- benreesman 2y agoJust remember that the entire modern tech ecosystem from pg to Garry to sama are super cool with the spokesperson in chief for handing the reigns of capitalism over to those who view competition, efficiency, markets and freedom with utter contempt: https://youtu.be/zI7hbEuopLI?si=MJaJ9lVGJqLVUiTG https://youtu.be/zI7hbEuopLI?si=MJaJ9lVGJqLVUiTG
- bobbylarrybobby 2y agoI have nothing to contribute except that the favicon logo for The Breach is fantastic
- andrewstuart 2y agoMega landlords and rich people are the only ones who will own houses in the future. Actually maybe that future is now.
- meeb 2y agoIt’s a shift in collective power. At the core of the issue is landlords communicating together to all set fixed high rents has been illegal for decades. This is collective rent fixing with an extra step. The “AI” here is just a buzzword, it’s masking a black box where many landlords pump in lots of data and a black box algorithm spits out higher rents. The issue occurs when a critical mass of landlords use the same service. The market readjusts from free market competition to the maximum the market can bear without collapsing, exactly what the anti-collusion laws were design to prevent. The economic drivers are reversed. Like generative AI for art, it doesn’t cleanly fit into any existing governance. I would assume new, and irritating complex, laws will be attempted to be written to control this development as it has more immediate real works impact than other forms of “AI”.
- crooked-v 2y agoExactly. As with the ongoing RealPage case, all the 'algorithm' and 'AI' stuff is just a system designed to enable price collusion without landlords directly talking to each other.
- i-am-fnord 2y agoIt's just like Uber, Airbnb, and the rest of the tech world. As it turns out most of the technology we've built doesn't really help people at all... we've given corporations new ways to collude or evade regulations causing immense harm to our society. All we've done is help companies break the law and get rich at the expense of the people. And our stupid governments won't even hold them accountable.
- tharmas 2y agoThe tech behind Uber is fantastic. Its the way it was used that is nasty. Similarly with AirBnB. If AirBnB had restricted the use of its platform to people wanting to rent out a room in their house or their apartment it would have been much better. But I completely agree with you, a lot of the tech has been hugely detrimental to the public. And the government do no oversight.
- 2y ago
- giarc 2y agoHow does this happen? Rent increases in Ontario are capped. Here is the limit for 2025. >The rent increase guideline for 2025 is 2.5%. >The guideline is the maximum a landlord can increase most tenants’ rent during a year without the approval of the Landlord and Tenant Board. https://www.ontario.ca/page/residential-rent-increases https://www.ontario.ca/page/residential-rent-increases
- mcpherrinm 2y agoRent control doesn’t apply to newly constructed buildings
- giarc 2y agoAhh nevermind, I didn't RTFA. >The provincial maximum on rent-controlled apartments last year was 2.5 per cent, but Sharpe’s building has no limit because Ontario Premier Doug Ford removed controls on any rental units built or occupied after November, 2018.
- analog31 2y agoIt also doesn't apply to renovated apartments. My daughter, who lives in Toronto, told me the term is "reno-viction." She also pointed out that virtually all of the grocery stores in Toronto are owned by one company.
- mcpherrinm 2y agoRent control does still apply after a renovation, and the renter has the right to move back in after renovations are complete. But of course this isn't practical for many people, as they'll need somewhere else to live, and the landlord can drag out the renovation as long as they want to. The landlord does have to give you 1-3 months rent, but if you're in a rent-controlled apartment, that may not cover your rent elsewhere. And of course some landlords aren't going to follow the rules, and many tenants don't know their rights. Demolishing the apartment building and building a new one gets around this too, which is common when a small building is replaced with a large tower. The new building won't have rent control. Details on the rules are here: https://tribunalsontario.ca/documents/ltb/Notices%20of%20Termination%20&%20Instructions/N13_Instructions_20200728.pdf https://tribunalsontario.ca/documents/ltb/Notices%20of%20Ter...
- ChrisArchitect 2y agoRelated case from the U.S.: DOJ sues realpage for algorithmic pricing scheme that harms renters https://news.ycombinator.com/item?id=41330007 https://news.ycombinator.com/item?id=41330007
- cute_boi 2y agoI don't understand why is government sleeping when greedy landlords are trying to extremely abuse basic necessity. Housing is a basic necessity and landlords are being extremely exploitative and government can't do anything...
- somerandomqaguy 2y agoCanadian federal government just mandated 3 days in the office for all government employees. Canadian businesses were lobbying as well as pressure from Ontario Premier Ford and Mayor Olivia Chow. The Ontario and Nova Scotia provincial governments have ordered return to office minimum 3 days a week by October. Governments in Canada are not sleeping. Quite the opposite in fact.
- Fire-Dragon-DoL 2y agoI'm not sure how to interpret your comment. Are you suggesting they are forcing some price increase with the return to office mandate?
- CalRobert 2y agoOf course, schemes like this would be hard or impossible if enough housing were built.
- collaborative 2y agoThis is all clearly a consequence of not enough supply Question for anyone that knows: how does it end? Will some landlords go bust and get bought by 1 or 2 mega corpos, and then rinse and repeat until it's a McDonald's/Burger King monopoly? Will all rentals be owned by a single entity? Are they already owned by one? I heard all these corps are ultimately owned by Blackrock I am just trying to see what possibly even worse crisis will spawn from this crisis. Population levels are expected to decrease over the coming decades. Will that trigger a collapse in rents? Where will "greed" move to, what novel forms of collusion and exploitation will we suffer instead of it being all focused on rent and property? Edit: I just realised that the shift may already be happening in the form of other basic necessity industries colluding: utilities, car insurance, "public" transport, food
- globalnode 2y agoI'm so sick of these economic arguments about supply and demand over housing. Basic housing should be provided free of charge by the govt using taxes. Anything above basic and we can start talking about market forces. Its like arguing about whether to eat apples or oranges on Mars when you can't even get to Mars. Its irrelevant. The alternative is society gets a lot worse for a lot of people and tinkering with plugging legal gaps doesn't address the issue of whether we think people are entitled to a place to live if they are part of our society. Going back in time, do you think the local village is going to let its warriors or farmers sleep outside in the cold with no shelter then expect them to work as a community for the benefit of the village elders? Its a core issue, everything else is just busywork at this stage.
- 99_00 2y agoEvery residential land lord in Canada is increasingly rent the maximum legally allowed amount. They don’t need AI or analysis. Canada has record immigration levels. And at the same time cities across the country decided, with the support of voters, that new residential development can not be on undeveloped lands. It must be on previously developed lands and increase density Of course redevelopment is more expensive, takes longer, requires more consultation and planning. The result is a severe shortage of housing. Instead of solving this with suburban sprawl, which isn’t ideal but is necessary, politician, voters, and density ideologist choose to blame a scapegoat. Landlords are an obvious candidate. Adding AI to the mix makes it a trendy story.
- hungie 2y agoWe shouldn't permit "mega corporate landlords" to exist. It doesn't take a Marxist to see that consolidation of real estate into fewer and larger corporate holdings is going to snowball in really destructive ways.
- Fire-Dragon-DoL 2y agoThis is specific to Ontario. I was curious how they achieved this, given in BC all rent is controlled. There are workarounds, but it's not straightforward
- Fire-Dragon-DoL 2y agoWould it help if we said that you can't own more than x properties for rent? Clearly a mega landlord is a problem