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The middle case is that we are paying 2.6% higher rent due to RealPage. I don't think the aggressive piece is realistic. And if we break up RealPage I highly d

The middle case is that we are paying 2.6% higher rent due to RealPage. I don't think the aggressive piece is realistic. And if we break up RealPage I highly doubt we'll see an significant drop in rent prices. An interesting analysis would be looking at vacancy rate across different cities over time. If we saw a large increase in cities with a high penetration of RealPage I'd be more inclined to believe it's having a significant impact. For California and Text at least it looks like the price increase is classical supply and demand driven. We're not building enough multifamily or apartments. https://fred.stlouisfed.org/series/TXRVAC https://fred.stlouisfed.org/series/TXRVAC https://fred.stlouisfed.org/series/CARVAC https://fred.stlouisfed.org/series/CARVAC

deleted 2y ago
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flimsypremise 2y ago
In NYC I can tell you that the metropolitan area lost about 500,000 people since 2020, added ~20-30k housing units per year in that same time. The vacancy rate somehow dropped dramatically despite this and rents also rose dramatically. I've yet to see any good explanation for this, yet you'll still see people advocate for building more housing as the solution. Simply using the rental vacancy rate as a proxy for supply and demand does not work, since there are lots of factors that can affect vacancies. One of then, as outlined in the article, is landlords keep units off the market to drive up prices.
- ProfessorLayton 2y ago
  The explanation is that there isn't enough housing to meet demand. That's it. Until there is, prices will keep going up even when building more units. Landlords wouldn't be buying up a ton of units and renting them out at a profit if there was a glut of inventory, because it would be a terrible investment.
  - ethbr1 2y ago
    Or, accounting and tax law makes it less painful to keep units vacant than reprice them at lower rents. Which is a thing we could change via something like Vancouver's vacancy tax. Make it more in landlords' interest to reprice units lower, if the market has excess inventory.
    - ProfessorLayton 2y ago
      The market will dictate lower prices if there's excess inventory. If landlords are hoarding units and keeping them empty instead of lowering rental prices, that indicates a lack of available inventory.
      - ethbr1 2y ago
        That's not how repricing works. If a landlord is unable to rent a unit at a desired price, because the rental market has moved lower, then they have two options. They can decrease the price. Or they can not offer the unit for rent (or continue listing it at the higher price). The second option's cost to landlords is largely defined by accounting/tax rules, in regards to how painful the vacancy will be to them. Thus, vacancy can be made more or less painful by changing accounting/tax rules.
        ProfessorLayton 2y ago
        I'm not talking about repricing specifically? I'm talking about how differently the housing market would behave if there was enough housing to go around. Landlords have a 3rd option: They can sell the unit, because their unit no longer commands high prices due to housing supply meeting demand, and their capital is best used elsewhere. If they are underwater and cannot sell above break-even, their bank will eventually do it for them.
        ethbr1 2y ago
        As a commercial property, both their loan and sale price are contingent on the rental price. So again, a disincentive to ever decrease rent (and thus demonstrate the market is softer and therefore you property is worth less). Versus claiming it still commands higher rent (and is temporarily unrented) and thus more valuable.
- JamesBarney 2y ago
  Landlords are not keeping units off the market to drive up prices. There are no landlords who have the pricing power to make that work. There is no landlord that can keep 10% of his inventory off the market to drive up rental prices 11%.
  - HarryHirsch 2y ago
    There is, however, in any market a small number of big players, all politically connected, who will conspire against newcomers building new units. A couple years ago stories about that "historic laundromat" in SF were making the rounds, that is very typical.
- Aunche 2y ago
  A lot of native New Yorkers live with a lot of family members or roommates, and these are the types of people who are most likely the move out. Meanwhile, the most likely people to move into New York are well paid young professionals who can afford more space.
- 0xBDB 2y ago
  > In NYC I can tell you that the metropolitan area lost about 500,000 people since 2020, added ~20-30k housing units per year in that same time. The vacancy rate somehow dropped dramatically despite this and rents also rose dramatically. I've >yet to see any good explanation for this Taking these numbers as given, the obvious explanation is latent demand. A lot of people who used to live five to a 900 sqft. New York apartment are now living 2 or 3 to an apartment instead. Probably the rent dipped briefly before soaring, yeah? People took advantage, and when leases are up, many of those people will presumably consolidate back with their families. Very similar to the concept of "induced demand" (which is also really latent demand) with regards to highways. Build new lanes, people who were unwilling to drive before use the lanes, traffic delays stay the same (but with higher throughput, and therefore still a net positive, even if the money would've been better spent on trains).

deleted 2y ago

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flimsypremise 2y ago

In NYC I can tell you that the metropolitan area lost about 500,000 people since 2020, added ~20-30k housing units per year in that same time. The vacancy rate somehow dropped dramatically despite this and rents also rose dramatically. I've yet to see any good explanation for this, yet you'll still see people advocate for building more housing as the solution. Simply using the rental vacancy rate as a proxy for supply and demand does not work, since there are lots of factors that can affect vacancies. One of then, as outlined in the article, is landlords keep units off the market to drive up prices.

ProfessorLayton 2y ago
The explanation is that there isn't enough housing to meet demand. That's it. Until there is, prices will keep going up even when building more units. Landlords wouldn't be buying up a ton of units and renting them out at a profit if there was a glut of inventory, because it would be a terrible investment.
- ethbr1 2y ago
  Or, accounting and tax law makes it less painful to keep units vacant than reprice them at lower rents. Which is a thing we could change via something like Vancouver's vacancy tax. Make it more in landlords' interest to reprice units lower, if the market has excess inventory.
  - ProfessorLayton 2y ago
    The market will dictate lower prices if there's excess inventory. If landlords are hoarding units and keeping them empty instead of lowering rental prices, that indicates a lack of available inventory.
    - ethbr1 2y ago
      That's not how repricing works. If a landlord is unable to rent a unit at a desired price, because the rental market has moved lower, then they have two options. They can decrease the price. Or they can not offer the unit for rent (or continue listing it at the higher price). The second option's cost to landlords is largely defined by accounting/tax rules, in regards to how painful the vacancy will be to them. Thus, vacancy can be made more or less painful by changing accounting/tax rules.
      - ProfessorLayton 2y ago
        I'm not talking about repricing specifically? I'm talking about how differently the housing market would behave if there was enough housing to go around. Landlords have a 3rd option: They can sell the unit, because their unit no longer commands high prices due to housing supply meeting demand, and their capital is best used elsewhere. If they are underwater and cannot sell above break-even, their bank will eventually do it for them.
        ethbr1 2y ago
        As a commercial property, both their loan and sale price are contingent on the rental price. So again, a disincentive to ever decrease rent (and thus demonstrate the market is softer and therefore you property is worth less). Versus claiming it still commands higher rent (and is temporarily unrented) and thus more valuable.
JamesBarney 2y ago
Landlords are not keeping units off the market to drive up prices. There are no landlords who have the pricing power to make that work. There is no landlord that can keep 10% of his inventory off the market to drive up rental prices 11%.
- HarryHirsch 2y ago
  There is, however, in any market a small number of big players, all politically connected, who will conspire against newcomers building new units. A couple years ago stories about that "historic laundromat" in SF were making the rounds, that is very typical.
Aunche 2y ago
A lot of native New Yorkers live with a lot of family members or roommates, and these are the types of people who are most likely the move out. Meanwhile, the most likely people to move into New York are well paid young professionals who can afford more space.
0xBDB 2y ago
> In NYC I can tell you that the metropolitan area lost about 500,000 people since 2020, added ~20-30k housing units per year in that same time. The vacancy rate somehow dropped dramatically despite this and rents also rose dramatically. I've >yet to see any good explanation for this Taking these numbers as given, the obvious explanation is latent demand. A lot of people who used to live five to a 900 sqft. New York apartment are now living 2 or 3 to an apartment instead. Probably the rent dipped briefly before soaring, yeah? People took advantage, and when leases are up, many of those people will presumably consolidate back with their families. Very similar to the concept of "induced demand" (which is also really latent demand) with regards to highways. Build new lanes, people who were unwilling to drive before use the lanes, traffic delays stay the same (but with higher throughput, and therefore still a net positive, even if the money would've been better spent on trains).