Company that makes rent-setting software for landlords sued for collusion

RealPage worked with some of the nation’s largest landlords to raise rents, says lawsuit.

Read the whole story

 

[total.wimp]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

Examining competitor's pricing is not collusion, it's an important feature of properly functioning capitalism. Simply put, if you don't know what a competitor is charging, it's difficult to undercut his price. While it's absolutely true that this knowledge can be used to artificially keep prices high, in a competitive market, it almost always has the opposite effect.

The problem with the software isn't that the prices of competitors are identified, it's the encouragement to keep units off the market. That discourages competition.

 

[watermeloncup]

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.

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.

Or just fix our fucked up zoning codes across the country so that there's a lot of new housing supply. These investment groups getting into housing put it right in their prospectuses that they think housing is a good investment because they expect the crisis-level undersupply of new housing to continue indefinitely.

Something like 90% of the occupied land in their US is zones exclusively for single family homes. Including for instance places right next to light rail stations here in the Los Angeles area. It's ILLEGAL to build more than a SFH on most of this land, SB9 in California notwithstanding. So yeah no duh finance is interested and landlords are able to collude on ratcheting up rents, that's what happens when you create crisis-level scarcity of a necessary good.

This also feeds into the climate crisis. Santa Monica has a daytime population of 250k and a mightier population of 90k (the latter is about the same as it was in 1970). Most of this is because we took in a ton of new jobs while barely building any housing. It's not a coincidence that even by Los Angeles standards, Santa Monica is notorious for extremely bad traffic, although I'll say that traffic is really only on streets headed to the freeways, it's rarely ever that bad driving around locally. Which is another strong hint about what's creating the traffic.

Zoning is completely bonkers in the US. It's absolutely bizarre that a country which supposedly values free markets and private property has made it so that in 90% of urbanized land, essentially only suburban development can be built, and only a very specific type of suburbs at that. So much for freedom of choice. I don't want to live in the suburbs, so zoning rules essentially force me to pay out the ass to live in an actual urban area. Unregulated markets are bad, but markets mis-regulated by the government can be even worse.

 

[Lee L]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

Some landlords also have publicly posted pricing which they can use to help adjust pricing. On the other hand, the general public also sees the pricing and can make decisions based off that, which would potentially change pricing behavior.

I think the key difference in this case is that a whole lot of landlords do not post pricing on the web or some other accessible place. However, the software takes into account private pricing information that those non-public landlords have entered into their software and allows or even recommends others to make changes based on that, even to the point of telling them not to lease units to keep pricing high.

 

[GenericAnimeBoy]

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.

Per the complaint, the suit was filed in federal court. One of the plaintiffs lives in Washington and most of the named defendants are incorporated and headquartered in other states so interstate commerce is definitely involved.

 

[watershadow]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

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.

You're also not committing to buying gas at a set price at that station for a long period. It's much easier to shop around and take your business elsewhere if you think a station is overcharging.

 

[mmiller7]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

IMO the difference is it sounds like the software is actively encouraging different places to set their prices higher.

The gas station is just advertising to their customers, and if the neighboring station notices that's not much different from a grocery store owner noticing a different grocery store's ads.

 

[AusPeter]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

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.

Does it really matter if both sides have access to the same information when one side has unilateral power to increase prices across the board (and all suppliers do so at the same time)?

 

[DRJlaw]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

The key here from an antitrust perspective is (1) the software is (relatively comprehensively) collecting rate information from the entire market including non-public or difficult to discern information such as occupancy rates and (2) the software is making recommendations concerning rates that are based upon that detailed information, so that there's an argument for coordinated activity amongst competitors, managed through a third party.

This is not merely an information service collecting publicly available information and making it available as a product. In the gas station example, all you have is better information concerning price. You don't know what their sales volume is and you have to analyze price yourself.

This is also not merely an algorithm which optimizes your own rates based upon your own non-public information, supplemented with publicly available information from others. The algorithm uses non-public (or difficult to discern) information from competitors to optimize your recommended rates. Sure, you might get occupancy information from public companies and REITs filing regulatory paperwork every quarter, but not month-to-month information from assets managed by private companies and hedge funds.

That's the difference.

 

[JohnDeL]

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.

Per the complaint, the suit was filed in federal court. One of the plaintiffs lives in Washington and most of the named defendants are incorporated and headquartered in other states so interstate commerce is definitely involved.

Not necessarily. If I live in DC but sell watermelons in Texas and the watermelons are grown in Texas, then it isn't interstate commerce. And I expect that the plaintiff's lawyers will use an argument fairly close to that in a motion to have the case dismissed.

 

[A Man A Plan A Canal Panama]

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.

That would be a great start. I would like to add, ban foreign ownership of local real estate, especially not owner occupied at least 51% of the year.

Other countries do that, for good reasons.

 

[The Dark]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

Examining competitor's pricing is not collusion, it's an important feature of properly functioning capitalism. Simply put, if you don't know what a competitor is charging, it's difficult to undercut his price. While it's absolutely true that this knowledge can be used to artificially keep prices high, in a competitive market, it almost always has the opposite effect.

The problem with the software isn't that the prices of competitors are identified, it's the encouragement to keep units off the market. That discourages competition.

There's potentially also a problem in using competitors' actual pricing instead of advertised pricing, since that's not generally publicly available information. In fact, it's often the sort of information that gets labeled as proprietary information. I'm sure RealPage will argue that because it's aggregated and customers don't have access to specific competitor data that it's not problematic, but it does remove a level of uncertainty from the competitive environment when compared to a rental company only knowing what its competitors advertise and whatever information potential renters volunteer, which may be wildly out-of-date. If you only know your competitors' advertised pricing, you don't know their discount rates to entice wavering customers. With actual pricing, even if aggregated, you can probably make a pretty good guess at discount rates because there's probably not wild variation in rents within their aggregation areas.

 

[rasheverak]

Mao was right.

 

[Loading...]

It seems like rental pricing is a problem even outside of this app. Late stage capitalism indeed!

 

[Lord Bobbymort]

Interesting. When does a 'business idea' become an 'illegal racket'? Is this another sign of 'late stage capitalism'?

When someone’s idea or need to enrich themselves screws everyone else over in a major way. Yes, it’s LSC.

And when information is no longer symmetrical - when buyers don't have the same information as sellers.

 

[motytrah]

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.

I've worked on these systems in the Hospitality industry. We were very careful to only use public sources rates. Often using a third party that scraped the various channels. We COULD have used the internal data that was in theory public, but we wanted to create an arms length pricing feed.

Beyond that these systems generally have two phases. One, demand forecasting. How many units you will have open. How quickly they are going. Two, price/revenue management. Which is actually setting the price using various signals. At the end as you change prices up or down is that aligning customer demand with what you have available.

 

[munnabhaibtech]

Some landlords also have publicly posted pricing which they can use to help adjust pricing. On the other hand, the general public also sees the pricing and can make decisions based off that, which would potentially change pricing behavior.

I think the key difference in this case is that a whole lot of landlords do not post pricing on the web or some other accessible place. However, the software takes into account private pricing information that those non-public landlords have entered into their software and allows or even recommends others to make changes based on that, even to the point of telling them not to lease units to keep pricing high.

The publicly posted pricing has no connection to the actual rent the property rented at. Some landlords post significantly above market rate rents and expect prospective tenants to negotiate. Others post lower rents and hope for a bidding war. The actual rent at which the unit rented is not public information and is not available to prospective renters. This company however made this information available to other landlords, so the information asymmetry between the landlords and tenants is huge.

 

[ktmglen]

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.

Per the complaint, the suit was filed in federal court. One of the plaintiffs lives in Washington and most of the named defendants are incorporated and headquartered in other states so interstate commerce is definitely involved.

Not necessarily. If I live in DC but sell watermelons in Texas and the watermelons are grown in Texas, then it isn't interstate commerce. And I expect that the plaintiff's lawyers will use an argument fairly close to that in a motion to have the case dismissed.

Agricultural products might be a bad example. If I'm not mistaken, the supreme court established that by growing food in one state, even if you only sell it in the same state, you're affecting interstate commerce by lessening the demand for imports from other states. And thus it falls under the commerce clause of the constitution.

 

[Statistical]

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.

Per the complaint, the suit was filed in federal court. One of the plaintiffs lives in Washington and most of the named defendants are incorporated and headquartered in other states so interstate commerce is definitely involved.

Not necessarily. If I live in DC but sell watermelons in Texas and the watermelons are grown in Texas, then it isn't interstate commerce. And I expect that the plaintiff's lawyers will use an argument fairly close to that in a motion to have the case dismissed.

Yeah I don't think you realize how much the courts have stretched the interstate clause over the decades.

A farmers growing wheat for personal consumption that would never be sold to anyone even in state was ruled to fall under interstate commerce clause because the wheat he didn't sell would have an impact on wheat prices.

Production quotas under the Agricultural Adjustment Act of 1938 were constitutionally applied to agricultural production that was consumed purely intrastate because its effect upon interstate commerce placed it within the power of Congress to regulate under the Commerce Clause.

https://en.wikipedia.org/wiki/Wickard_v._Filburn

What you stated may have been the original intent but hasn't been true for 80+ years now. Personally I am not really sure the ICC should be that broad but it is water under the bridge now.

 

[Sheep Disorder]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

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!

Maybe you should recommend to ProPublica that they write a story about that too.

(Edit: My comment isn't meant as snark, but a legit statement. If there's a problem with collusion within the gasoline market, that should be brought to light, just like they did with this situation.)

As a consumer, you can use say GasBuddy to know the prices as that is public information.

As others kept pointing out, the issue is the use of non-public data that the consumer does not have. It is like the SANTA FE Plug-in Hybrid EV US ad where the gas price is known but the price of the squeegee is not. When I lookup an apartment, there is no indication of actual rent as that lack any fees until I get the actual lease. Yet this software knows the exact rent including fees for similar apartments even those fees that are not provided to me. Then the landlord can provide a rent that the software predicts I would be willing to pay especially I had already visited the landlords who use the software.

 

[sxotty]

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.

Stop buying 300K houses that sold for 150K a few months earlier?

Because it's the only house left after the comerical landlords brought everything? I can either pay a landlord a ridiculous price or own a home after paying a ridiculous price.

It is true. There are investment groups trying to purchase all the housing stock. What a disaster things are becoming. I'm glad I already have a house. If the housing stock is built up and more empty houses exist one assumes eventually things will get back to a more normal market.

 

[Statistical]

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.

Per the complaint, the suit was filed in federal court. One of the plaintiffs lives in Washington and most of the named defendants are incorporated and headquartered in other states so interstate commerce is definitely involved.

Not necessarily. If I live in DC but sell watermelons in Texas and the watermelons are grown in Texas, then it isn't interstate commerce. And I expect that the plaintiff's lawyers will use an argument fairly close to that in a motion to have the case dismissed.

Agricultural products might be a bad example. If I'm not mistaken, the supreme court established that by growing food in one state, even if you only sell it in the same state, you're affecting interstate commerce by lessening the demand for imports from other states. And thus it falls under the commerce clause of the constitution.

Even if you don't sell it at all it falls under interstate commerce which to me is borderline ridiculous but it is a precedent which has stood for eighty years now.

 

[panton41]

Oh no.

Anyway...

Yes... rental property owners working together to crank up rent to an amount where people feel even more squeezed and/or live from paycheque to paycheque is such a non-problem that we should ignore.

That's not the take I was going for, I was trying to show disdain for their business model by expressing how unsurprised I am that this is happening.

I don't just live paycheck to paycheck, but day to day as I work for tips.

But, sure, be a judgemental dick and assume you know anything about me.

 

[mmiller7]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

Some landlords also have publicly posted pricing which they can use to help adjust pricing. On the other hand, the general public also sees the pricing and can make decisions based off that, which would potentially change pricing behavior.

I think the key difference in this case is that a whole lot of landlords do not post pricing on the web or some other accessible place. However, the software takes into account private pricing information that those non-public landlords have entered into their software and allows or even recommends others to make changes based on that, even to the point of telling them not to lease units to keep pricing high.

Yeah also not a fan how hard it is to compare prices as a consumer. Its kinda like salary...it seems everyone is told a different rate and discouraged from discussing it.

 

[Ser Simian]

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.

Frankly, I'd go even further with single-family homes and make it ruinously expensive to own a house you don't live in. Eliminate the so-called passive-income aspect of home ownership and you get rid of landlords sitting on properties for years and letting them slowly decay until they can't squeeze any more money out of them. It'd be a lot easier for folks who just need a place to live if the market wasn't artificially inflated to suit the whims of capital.

I'll admit I don't have as neat a solution for apartments, and I think there should probably be some sort of rental market, but at the end of the day I think we, as a society, are going to have to start treating housing more like a right than a privilege before any of this gets meaningfully sorted out.

The PC government here actually did that, but who knows if that will actually do anything. (They predicted that it would take about two years to see the results of their tax plan.)

Honestly, I'd say that it is doubtful that it will have any meaningful impact though. Resale home prices were up 28% in 2021 from 2020. That is just eyewateringly crazy.

I'm not familiar with that particular program, but by "ruinously expensive" I mean something like "annual property taxes equal to the value of the home". Something that will truly incentivize folks to sell a house that they're not actually living in.

 

[Longmile149]

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.

Frankly, I'd go even further with single-family homes and make it ruinously expensive to own a house you don't live in. Eliminate the so-called passive-income aspect of home ownership and you get rid of landlords sitting on properties for years and letting them slowly decay until they can't squeeze any more money out of them. It'd be a lot easier for folks who just need a place to live if the market wasn't artificially inflated to suit the whims of capital.

I'll admit I don't have as neat a solution for apartments, and I think there should probably be some sort of rental market, but at the end of the day I think we, as a society, are going to have to start treating housing more like a right than a privilege before any of this gets meaningfully sorted out.

Personally, I like doubling your property taxes for every home you own that you don’t live in 8 months out of the year.

In the case of apartment buildings/complexes, the entire building counts as a single unit for the doubling, but C-level execs (or the appropriate parallel) living in a building 8+ months reduce the unit count by 1 to a minimum of 1.

Own six apartment complexes in Detroit and live in a house in Ann Arbor?

Your home = property taxes x1
Apt 1 = x2
Apt 2 = x4
Apt 3 = x8
Etc

 

[Fatesrider]

Interesting. When does a 'business idea' become an 'illegal racket'? Is this another sign of 'late stage capitalism'?

When someone’s idea or need to enrich themselves screws everyone else over in a major way. Yes, it’s LSC.

More of a matter of what Lindsey Graham said about why he kept blocking popular legislation in the Senate when he was Majority Leader.

"Because I can."

That's not an acceptable answer for doing anything that fucks over people.

 

[graylshaped]

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.

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.

Or just fix our fucked up zoning codes across the country so that there's a lot of new housing supply. These investment groups getting into housing put it right in their prospectuses that they think housing is a good investment because they expect the crisis-level undersupply of new housing to continue indefinitely.

Something like 90% of the occupied land in their US is zones exclusively for single family homes. Including for instance places right next to light rail stations here in the Los Angeles area. It's ILLEGAL to build more than a SFH on most of this land, SB9 in California notwithstanding. So yeah no duh finance is interested and landlords are able to collude on ratcheting up rents, that's what happens when you create crisis-level scarcity of a necessary good.

This also feeds into the climate crisis. Santa Monica has a daytime population of 250k and a mightier population of 90k (the latter is about the same as it was in 1970). Most of this is because we took in a ton of new jobs while barely building any housing. It's not a coincidence that even by Los Angeles standards, Santa Monica is notorious for extremely bad traffic, although I'll say that traffic is really only on streets headed to the freeways, it's rarely ever that bad driving around locally. Which is another strong hint about what's creating the traffic.

Not to rip on Santa Monica, but last time I was there traversing the sidewalks was a pain in the butt because of the rental bikes dropped willy-nilly wherever people decided to abandon them.

 

[Longmile149]

Also:

RealPage brags that clients—who agree to provide RealPage real-time access to sensitive and nonpublic data—experience “rental rate improvements, year over year, between 5% and 12% in every market,” the lawsuit said.

Burn these motherfuckers to the ground and salt the earth where we scatter the ashes.

Burn down their homes and businesses, too.

 

[rbf072858]

First reaction: Yes, this is disgusting.

Second reaction: Cartels only have power when there is a shortage. Housing in America is artificially-constrained through regulation based on ~vibes~, not functional urban planning. This software sits on top of an artifically-constrained system and likely accelerates certain problems. However, the simple fundamentals of not allowing supply to meet demand is a much more significant driver of the problems people experience. The software is just bad icing on top of a rotting cake.

Third set of reactions: Is this actually an anti-trust matter? Where does the line between market research and backchannel collusion begin and end for 3rd-party providers like this? How much power do their purchasers have to influence rent prices in the market (illegal), rather than just maximize profit for themselves (not illegal)? What other software out there is recommending pricing to multiple platforms, and how does that inform this case?
I don't know these answers (not a lawyer), but I'm treating this issue like I treat most any politician talking about the 1st Amendment: very, very carefully.

re: second reaction - the "vibes" tend to be largely "this building will change our community... It's ALWAYS been this way"... With always being some value around 30 years.

re: 3rd reactions - If I hire a lawyer, a representative, to sit in a room with like representatives of other people like me, am *I* colluding with those other people who have representatives?

Courts have long held that I AM, in fact, colluding (a crime) and in this case, with the goal of driving prices... Price fixing. Injecting a 3rd party doesn't dilute the act or the effect.

The software company acting as the 3rd party has/had a lousy lawyer if they got advice otherwise.

This isn't about algorithms/software. That's a smoke screen. It's about the illegal act of collusion in pursuit of fixing prices.

If they ONLY did it in Texas, MAYBE they'd get away with it.
They crossed state lines though, making it a federal offense... And used (probably) telecommunications channels making it wire fraud.

Someone call Senator Warren please?

 

[munnabhaibtech]

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.

That would be a great start. I would like to add, ban foreign ownership of local real estate, especially not owner occupied at least 51% of the year.

Other countries do that, for good reasons.

On one hand, I would really support that to avoid homes being built specifically for wealthy foreign investors (this is a big issue in NYC) as piggybanks. On the other hand, given the animosity towards foreigners from one of the two major parties, I suspect this would end up targeting foreigners working on visas while leaving a big loophole for the billionaire investor class.

 

[graylshaped]

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.

Frankly, I'd go even further with single-family homes and make it ruinously expensive to own a house you don't live in. Eliminate the so-called passive-income aspect of home ownership and you get rid of landlords sitting on properties for years and letting them slowly decay until they can't squeeze any more money out of them. It'd be a lot easier for folks who just need a place to live if the market wasn't artificially inflated to suit the whims of capital.

I'll admit I don't have as neat a solution for apartments, and I think there should probably be some sort of rental market, but at the end of the day I think we, as a society, are going to have to start treating housing more like a right than a privilege before any of this gets meaningfully sorted out.

Personally, I like doubling your property taxes for every home you own that you don’t live in 8 months out of the year.

In the case of apartment buildings/complexes, the entire building counts as a single unit for the doubling, but C-level execs (or the appropriate parallel) living in a building 8+ months reduce the unit count by 1 to a minimum of 1.

Own six apartment complexes in Detroit and live in a house in Ann Arbor?

Your home = property taxes x1
Apt 1 = x2
Apt 2 = x4
Apt 3 = x8
Etc

Sounds good, except we own a condo we "lease" to my mother-in-law. Her rent is about ten percent of what we pay, because that is what she can afford.

 

[ktmglen]

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.

Per the complaint, the suit was filed in federal court. One of the plaintiffs lives in Washington and most of the named defendants are incorporated and headquartered in other states so interstate commerce is definitely involved.

Not necessarily. If I live in DC but sell watermelons in Texas and the watermelons are grown in Texas, then it isn't interstate commerce. And I expect that the plaintiff's lawyers will use an argument fairly close to that in a motion to have the case dismissed.

Agricultural products might be a bad example. If I'm not mistaken, the supreme court established that by growing food in one state, even if you only sell it in the same state, you're affecting interstate commerce by lessening the demand for imports from other states. And thus it falls under the commerce clause of the constitution.

Even if you don't sell it at all it falls under interstate commerce which to me is borderline ridiculous but it is a precedent which has stood for eighty years now.

Thanks for filling in the details. That's the exact case I was trying to remember.

 

[BobbyBobberson]

Mao was right.

Fucking yikes.

 

[Longmile149]

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.

Frankly, I'd go even further with single-family homes and make it ruinously expensive to own a house you don't live in. Eliminate the so-called passive-income aspect of home ownership and you get rid of landlords sitting on properties for years and letting them slowly decay until they can't squeeze any more money out of them. It'd be a lot easier for folks who just need a place to live if the market wasn't artificially inflated to suit the whims of capital.

I'll admit I don't have as neat a solution for apartments, and I think there should probably be some sort of rental market, but at the end of the day I think we, as a society, are going to have to start treating housing more like a right than a privilege before any of this gets meaningfully sorted out.

Personally, I like doubling your property taxes for every home you own that you don’t live in 8 months out of the year.

In the case of apartment buildings/complexes, the entire building counts as a single unit for the doubling, but C-level execs (or the appropriate parallel) living in a building 8+ months reduce the unit count by 1 to a minimum of 1.

Own six apartment complexes in Detroit and live in a house in Ann Arbor?

Your home = property taxes x1
Apt 1 = x2
Apt 2 = x4
Apt 3 = x8
Etc

Sounds good, except we own a condo we "lease" to my mother-in-law. Her rent is about ten percent of what we pay, because that is what she can afford.

My parents have a similar situation where they rent a house to my step sister for their mortgage payment.

My fantasy legislation is open to some amendments re: family members, charity, and the like.

 

[Uragan]

Interesting. When does a 'business idea' become an 'illegal racket'? Is this another sign of 'late stage capitalism'?

When someone’s idea or need to enrich themselves screws everyone else over in a major way. Yes, it’s LSC.

More of a matter of what Lindsey Graham said about why he kept blocking popular legislation in the Senate when he was Majority Leader.

"Because I can."

That's not an acceptable answer for doing anything that fucks over people.

Uh... when was Lindsey Graham ever the Senate Majority Leader?

 

[Readercathead]

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.

If Biden wants to control inflation these monopolies are where he should start. Of course people are joining unions and demanding higher wages, it’s just to afford prices at monopoly-controlled medical centers and rent.

Similar too when a couple companies own every nursing home and hospital in several surrounding states wages are stagnant, working situations are horrible, and the only recourse is to join forces nationally with a giant union.

 

[alex_d]

If this were a tool for property managers to use only publicly available and internal information to set prices, it would probably be legal.

I don’t see why the data makes much of a difference.

What does make a difference is that the software is interested in benefiting all of its clients simultaneously, even if it ends up hurting a particular client by telling them to not rent an apartment (or to wait for a higher rent). That is the definition of collusion. (Everyone working based on self interest == competition, usually. Everyone working for a common interest == collusion.)

 

[Uragan]

This one is interesting. I did a business exercise a few years ago where we had to figure out if gas stations posting their prices on the signs should count as collusion since their competitors can look and then adjust prices, and if that helps them raise prices and unofficially fix them as a group. This software reminds me of the same thing in that it's just a shortcut to looking at a bunch of price sheets.

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!

Maybe you should recommend to ProPublica that they write a story about that too.

(Edit: My comment isn't meant as snark, but a legit statement. If there's a problem with collusion within the gasoline market, that should be brought to light, just like they did with this situation.)

As a consumer, you can use say GasBuddy to know the prices as that is public information.

As others kept pointing out, the issue is the use of non-public data that the consumer does not have. It is like the SANTA FE Plug-in Hybrid EV US ad where the gas price is known but the price of the squeegee is not. When I lookup an apartment, there is no indication of actual rent as that lack any fees until I get the actual lease. Yet this software knows the exact rent including fees for similar apartments even those fees that are not provided to me. Then the landlord can provide a rent that the software predicts I would be willing to pay especially I had already visited the landlords who use the software.

But me using GasBuddy to find the cheapest gas isn't the same as gas stations (or conglomerates) using non-public software to figure out the optimal gas price to sell to me at.

 

[Photon_plumber]

Interesting. When does a 'business idea' become an 'illegal racket'? Is this another sign of 'late stage capitalism'?

When someone’s idea or need to enrich themselves screws everyone else over in a major way. Yes, it’s LSC.

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.

Not to be philosophical, but in economics and business, there are activities which can be mutually beneficial to all parties involved, and then there are scorched earth activities that leave everything in a worse mess than they were originally. This is one of those.

 

[Hapticz]

just another instance where those most vulnerable/poor get taken for as much or more, by 'business' and owners that feel themselves 'struggling' to survive.

this isn't capitalism, its outright oppression, maybe another riot on the steps of government offices?? no, that would only bring on the 'peace police' to ensure domestic tranquility for all.