RealPage worked with some of the nation’s largest landlords to raise rents, says lawsuit.
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Company that makes rent-setting software for landlords sued for collusion
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Interesting. When does a 'business idea' become an 'illegal racket'? Is this another sign of 'late stage capitalism'?
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In a whole lot of industries, there is a sort of "soft cartel" anyhow. I mean, I do hope they bust this app and the landlords using it, but. . .
In most industries, there is at the minimum, all participants tracking the pricing of "the market" and raising prices accordingly.
In most industries, there is at the minimum, all participants tracking the pricing of "the market" and raising prices accordingly.
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When someone’s idea or need to enrich themselves screws everyone else over in a major way. Yes, it’s LSC.
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Remember the good old days when an 'AI' had to achieve superhuman general-purpose capabilities and build an army of slaughterbots in order to rise up; rather than just being a glorified expert system and having eager accomplices?
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The world has been feeling like its full of implicit price collaboration these days. I think this is just the first of many anti-competitive lawsuits we'll see in the coming years.
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I can see this lawsuit having standing based on how many regular people it's screwed over.
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Good thing economics 101 always applies, right? It's just market forces, supply and demand! It's not like renters who own the land and living quarters have tools to defeat even savvy prospective tenants' bargaining power, is it? Just the Free Market at work! Any regulation in this immutable law of nature must be Government Interference!
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Well I hope this algorithm gets debunked and deleted. It's not the only reason for the high housing prices but it certainly hasn't helped the situation.
Combined with just how few entities control so many properties and there is no price competition which exacerbates the issue.
Combined with just how few entities control so many properties and there is no price competition which exacerbates the issue.
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Not here to defend capitalism, but thats like, every idea to enrich ones self since the beginning of time. Early colonialism wasn't capitalism, neither were viking raids. Too broad a definition. Late stage capitalism isn't the first appearance of powerful people screwing everyone they can get their hands on for more power.
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If you listen closely you can almost hear the wind from the slap on the wrist this will represent to this mafia.
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It is an interesting concept. Indirect collusion through a third party. Collusion may not have even been the original intent, but widespread success in the landlord marketplace has made it a fact.
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This seems similar to "On a computer" patents.
If the property owners/managers got in a room to share private data used for pricing, it would clearly be illegal, but since it's done on a computer owned by a third party it somehow becomes ok.
If the property owners/managers got in a room to share private data used for pricing, it would clearly be illegal, but since it's done on a computer owned by a third party it somehow becomes ok.
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Strange how the free market always steers towards turning people into serfs. Wonder why that is.
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Things are pretty ugly in my town. With borrowing rates being so low, a couple of large investment groups from Denver borrowed a shit ton of money and basically bought up everything up here. From what I've seen, rents are up over 40% in the last 18 months, and there's nothing anybody can do because it's the same people that own everything. I wonder if something like this software gave them the idea that they could walk into the market here and clean up or if they just had the business plan or creating a monopoly.
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Oh boy, just wait until you hear that Gas Stations have been using this exact same kind of software for a looooooong time (PriceAdvantage/Kalibrate). No need to even look out the window or adjust the prices yourself!
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It's that this 3rd party was using non-public data across _different_ landlords to help set prices. Effectively helping the landlords form a cartel to help set prices higher than they otherwise have been. Also it pushed landlords to keep some units vacant in order to help push prices higher which contributes to the housing shortage.
Basically it ended up having the big landlords collude into setting higher prices through private data sharing and artificially reducing supply so the Market couldn't actually set real supply & demand rates.
If you read further, it also kept pushing higher yearly rent raises higher than humans would have, which was influenced by all that non-public data.
If the software used public data and _only_ the individual landlords data for each landlord, that'd have been a lot different.
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Many commenters significantly overestimate the Federal judiciary's appetite for nuanced anti-trust/anti-competative behavior suits. The Federal judiciary is packed to the gills with former white-shoe corporate lawyers who (while not bought, per se) are mighty skeptical of claims of market rigging in anything more than cartoon handshake and briefcase of money scenarios.
There has been a 40+ year non-interference paradigm in market regulation, and Real Page's attorney's know it. Even within the FTC, many rank-and-file staff are true believers in "let the market sort it out".
In short, your thirst for justice will likely be un-slaked.
That shit-eating grin you can absolutely hear in their statements is them taunting the rest of us plebeian clowns by explaining "yes we're absolutely violating the spirit of anti-competative behavior laws, but not the current very narrow interpretation of the letter of that law. Even if a lower court judge nails us, SCOTUS is essentially the high-council of fucking over regular people, so....good luck losers."
In any case, this app doesn't do shit in a highly fragmented environment. As markets concentrate into smaller groups of bigger and bigger players, the likelyhood that someone will decide to go rogue from a tacitly accepted pricing scheme drops significantly.
There has been a 40+ year non-interference paradigm in market regulation, and Real Page's attorney's know it. Even within the FTC, many rank-and-file staff are true believers in "let the market sort it out".
In short, your thirst for justice will likely be un-slaked.
That shit-eating grin you can absolutely hear in their statements is them taunting the rest of us plebeian clowns by explaining "yes we're absolutely violating the spirit of anti-competative behavior laws, but not the current very narrow interpretation of the letter of that law. Even if a lower court judge nails us, SCOTUS is essentially the high-council of fucking over regular people, so....good luck losers."
In any case, this app doesn't do shit in a highly fragmented environment. As markets concentrate into smaller groups of bigger and bigger players, the likelyhood that someone will decide to go rogue from a tacitly accepted pricing scheme drops significantly.
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Statistical
Ars Legatus Legionis
Pretty sure it was the intent. When the software advises you the "suggested rent" based on other rents in the area and strongly advises you don't deviate up or down from the suggested rent that sounds like price fixing as a service.
The company also has pretty weasel word explanation on why it totally isn't price fixing which suggests they knew it would be an issue and took minimalist steps to create some sort of legal plausible deniability "We don't set the rent the employee/user manually does that ... based on the suggested rent based on other rents that we strongly suggest they don't deviate from". See we aren't fixing prices totally not us. Your honor there is a whole sperate person clicking a button.
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This app certainly doesn’t help, but housing becoming a speculative asset to put money in and not a roof over your head is what caused this.
Break the big conglomerates and ban things like hotel houses and that will also help a lot.
Break the big conglomerates and ban things like hotel houses and that will also help a lot.
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There is an issue with the amount of data available now. Our laws were designed to stop active collusion, necessary because there was a fog of war with imperfect information. With more perfect information and market consolidation, this is snowballing. This clearly crosses the line of current law, though. If this were a tool for property managers to use only publicly available and internal information to set prices, it would probably be legal. But with the algorithm taking in all information, public and private (price paid vs advertised for all participants), and coordinating lease periods, this is clearly violating the law.
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Remember a time when computers were supposed to help the humanity, and not serve to enrich the people who didn't need enriching? Yeah, these days I don't either.
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I don't think it's so similar. In the gas station situation, the buyer and the seller have access to the same information, not in the apartment renting situation.
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Chemical Tribe
Ars Legatus Legionis
"That's how odds work. "
The alt right playbook. Always a bigger fish.
https://www.youtube.com/watch?v=agzNANfNlTs
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Rents have gotten ridiculous. I know multiple locations/cities/areas that jumped 20-30% in a single year from 21- early 22 (ie, we're talking pre-war/inflation).
With of course no increase (and sometimes decreases) in services.
With of course no increase (and sometimes decreases) in services.
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It's always been a thin line. Most of our terms (including "racket") for cartel-like activity date from a far earlier time. It's not so much "late stage capitalism" so much as "the eternal vigilance required to keep capitalism from turning into feudalism."
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It's not just the prices. The article mentions staggering lease renewals. I rented from greystar a few years ago and they initially gave me a 11 month lease, which seemed like an odd unit of time to pick (but where happy to renew). I assumed they wanted to avoid rental protections for longer term leases but after reading this they probebrly wanted to stagger the start/end dates to artificialy drive the supply/demand curve.
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I mean yeah and that's fine for commodities and luxury goods. Setting price at the maximum that the market will bear isn't a problem for widgets and doodads and fancy purses. Housing is a need though which makes price fixing more of a hostage situation.
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This one will definitely end up going to the California Supreme Court. I doubt that it becomes a federal case though; if all of the landlords' properties are in Sacramento (as implied in the article), then interstate commerce isn't involved.
IMHO, it is collusion and should be against the law. Whether or not it will be found to be collusion and against the law is a toss-up at this point, given the quality of some of the judges on the bench.
IMHO, it is collusion and should be against the law. Whether or not it will be found to be collusion and against the law is a toss-up at this point, given the quality of some of the judges on the bench.
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"We're not doing anything anti-competitive, because landlords already do anti-competitive stuff manually and we just automated it."
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Most stations don't have the freedom to adjust prices anyway. It's usually set by the suppliers, who quite obviously collude on it. But the stations themselves make very little on gas sales. It's all the other stuff that people come in and buy that makes them money.
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Chemical Tribe
Ars Legatus Legionis
And the only way to fight them is have the economy tank, people go homeless, and those stupid investment groups go upsidedown.
Freakin 2008 all over again.
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Yep. Gas is often sold at or near cost with next to no margin. Almost a loss-leader. That's why all the stuff INSIDE the store is a buck or three more than anywhere else.
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This is the exact reason why, though it has standing, it won't end up changing anything, likely ending with a slap on the wrist and a lollipop to ease the pain of said slap. See: Equifax, Wells-Fargo, etc.
You can screw over regular people and still walk. It is when you screw over rich people that you end up suffering consequences.
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'Nuanced' is not a word I would use for this case. More like 'clear as day' price fixing.
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A lot of people are wondering in the comments if this is illegal or just a innovative use of software.
If you read the pro-publica article, it's clearly collusion.
All these landlords (mostly big companies, but not all of them) are giving their data to an algorithm, and that algorithm tells them what prices they should be selling at.
Now replace the word "algorithm" with "a guy named Bob."
All these landlords are giving their data to a guy named Bob, and Bob is telling them what prices they should be selling at.
If it's illegal for "a guy named Bob" to do then it's also illegal for an algorithm to do.
If you read the pro-publica article, it's clearly collusion.
All these landlords (mostly big companies, but not all of them) are giving their data to an algorithm, and that algorithm tells them what prices they should be selling at.
Now replace the word "algorithm" with "a guy named Bob."
All these landlords are giving their data to a guy named Bob, and Bob is telling them what prices they should be selling at.
If it's illegal for "a guy named Bob" to do then it's also illegal for an algorithm to do.
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Next go after the airbnb and the home flippers. If you look at realstate listing, you literally see flippers taking 150k houses, apply fake wood floor and coat of paint then flipping it for 300k.
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