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Collusion using online management services to fix prices across a region. I think Washington State is working on legislation around rental services due to this

Collusion using online management services to fix prices across a region. I think Washington State is working on legislation around rental services due to this already being a problem in the Seattle area. “Extra supply” is added to the portfolio containing housing they’ve already purchased. They own part of “existing supply” too.

Schiendelman 1y ago
I live in Seattle, and this is a scapegoat. it's another way to point a finger at anything but massive restrictions on supply. The easiest solution to collusion to keep prices high is to let lots of other people build and compete down price. In Washington, most new construction happens on a very small number of parcels, because that's the only place we allow it.
- gopher_space 1y ago
  Nobody concerned about rent price fixing thinks that we don't also need to build more housing here. This is just another part of the problem. Are you defending the practice?
  - Schiendelman 1y ago
    I think it simply doesn't matter. The only reason it could have any impact at all is in an incredibly constrained market. Unconstrain the market and they just won't be able to; it wouldn't work. Also - I don't think it actually affects prices. It's just that they've gotten good at seeking price equilibrium.
    - bugglebeetle 1y ago
      “Yes” would’ve been a sufficient answer.
  - crooked-v 1y ago
    And yet action gets taken about the rent price fixing, but not about actually encouraging more building.
    - shazbotter 1y ago
      Seattle upzoned huge chunks of the city, allowed ADUs (now two adus are permitted on all lots), and removed single family zoning. All within the past five years. Last year, Seattle built 20% more houses than the highest of any of the previous ten years. (~13k units) And this year we're 11% above last year, so far. What about that is not "actually encouraging more building"? I'd say your data might need revising.
      - Schiendelman 1y ago
        It's honestly not that much. I know it looks good when comparing to recent years, but it doesn't look as good when you look at regional numbers (the city limits don't matter much in a housing market) - and the number of ADUs you can build in the entire city in a year is lower than some single new apartment buildings. We aren't keeping up with demand, much less drawing down the likely hundreds of thousands (seriously) of units we need to allow.
        shazbotter 1y ago
        That's a different goal post. Seattle is doing things to encourage building housing. Full stop. Which refutes the claim made. Whether Seattle is building enough housing, or whether the region is doing enough to encourage housing development are separate claims.
scoofy 1y ago
Housing is a depreciating asset. Even if you're trying to continuously corner the market, you'll be losing money in the long run if you're not actually renting the units for more than you're buying them for. If supply can be built to meet demand, trying to corner the market to achieve monopoly rents will fail in the long run.
- shazbotter 1y ago
  Land isn't. And the house is depreciating, but not the value of having a rental at that location. My house is worth four times what I bought it for a decade ago. The house itself is depreciating, and because I rent a portion of it, I can claim that depreciation, but the value of the property is going up.
- yunwal 1y ago
  > Housing is a depreciating asset. It ought to be, but that is not how America works
rcpt 1y ago
There are too many competing landlords to form a functional cartel.
HDThoreaun 1y ago
Collusion on housing only works when there is a shortage. As soon as the shortage ends units go unfilled and landlords defect. Collusion works in industries where supply can change in the short run, tough to do that in real estate. Real estate elasticity is so high though that small collusion can work, but only if there is already a shortage. Yet, again the solution is just build more.
reliabilityguy 1y ago
Why this collusion doesn’t happen in Austin where rents are falling 2 years in a row?

Schiendelman 1y ago

I live in Seattle, and this is a scapegoat. it's another way to point a finger at anything but massive restrictions on supply. The easiest solution to collusion to keep prices high is to let lots of other people build and compete down price. In Washington, most new construction happens on a very small number of parcels, because that's the only place we allow it.

gopher_space 1y ago
Nobody concerned about rent price fixing thinks that we don't also need to build more housing here. This is just another part of the problem. Are you defending the practice?
- Schiendelman 1y ago
  I think it simply doesn't matter. The only reason it could have any impact at all is in an incredibly constrained market. Unconstrain the market and they just won't be able to; it wouldn't work. Also - I don't think it actually affects prices. It's just that they've gotten good at seeking price equilibrium.
  - bugglebeetle 1y ago
    “Yes” would’ve been a sufficient answer.
- crooked-v 1y ago
  And yet action gets taken about the rent price fixing, but not about actually encouraging more building.
  - shazbotter 1y ago
    Seattle upzoned huge chunks of the city, allowed ADUs (now two adus are permitted on all lots), and removed single family zoning. All within the past five years. Last year, Seattle built 20% more houses than the highest of any of the previous ten years. (~13k units) And this year we're 11% above last year, so far. What about that is not "actually encouraging more building"? I'd say your data might need revising.
    - Schiendelman 1y ago
      It's honestly not that much. I know it looks good when comparing to recent years, but it doesn't look as good when you look at regional numbers (the city limits don't matter much in a housing market) - and the number of ADUs you can build in the entire city in a year is lower than some single new apartment buildings. We aren't keeping up with demand, much less drawing down the likely hundreds of thousands (seriously) of units we need to allow.
      - shazbotter 1y ago
        That's a different goal post. Seattle is doing things to encourage building housing. Full stop. Which refutes the claim made. Whether Seattle is building enough housing, or whether the region is doing enough to encourage housing development are separate claims.

scoofy 1y ago

Housing is a depreciating asset. Even if you're trying to continuously corner the market, you'll be losing money in the long run if you're not actually renting the units for more than you're buying them for. If supply can be built to meet demand, trying to corner the market to achieve monopoly rents will fail in the long run.

shazbotter 1y ago
Land isn't. And the house is depreciating, but not the value of having a rental at that location. My house is worth four times what I bought it for a decade ago. The house itself is depreciating, and because I rent a portion of it, I can claim that depreciation, but the value of the property is going up.
yunwal 1y ago
> Housing is a depreciating asset. It ought to be, but that is not how America works

rcpt 1y ago

There are too many competing landlords to form a functional cartel.

HDThoreaun 1y ago

Collusion on housing only works when there is a shortage. As soon as the shortage ends units go unfilled and landlords defect. Collusion works in industries where supply can change in the short run, tough to do that in real estate. Real estate elasticity is so high though that small collusion can work, but only if there is already a shortage. Yet, again the solution is just build more.

reliabilityguy 1y ago

Why this collusion doesn’t happen in Austin where rents are falling 2 years in a row?