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

 

[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.

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.

I see what you mean... That's why I said must be owner occupied for 51% of the year. That way, foreign nationals are welcome to own their residence. No exceptions for $billionaires. They have plenty of other tax loopholes that us plebes can't use... and also need patching...

 

[killerhurtalot]

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.

When Greystar took over the apartment building I was renting in (from another large but local landlord corporation), the very first thing they tried was to convince me to renew my lease for an oddball 15 months. NYC landlords go out of the way to end their tenants' lease between May and August so that the demand is concentrated and they can command higher rents, but Greystar was unusually aggressive about that.

Edit: Repeated words

It's not them trying to concentrate it in those months. It's just the rent cycle for most of the country... almost no one wants to move near the holiday times around thanksgiving, christmas, new years, and etc... and at least for people with kids, moving during summer vacation is much easier than trying to juggle their kids school and etc in the middle of the school year.

The weather is also a lot better for moving during late spring to fall months too, or would you rather move in the dead of winter with snow/ice on the ground or it's wet as hell out?

I know I wouldn't want to move in those months at all from various social obligations and the fact that it can be hazardous/shitty weather that can ruin your stuff while moving... and not to mention how much cleaning you ha e to do after they track all that water/mud/etc into the damn place compared to just some dust when it's dry out.

Rent is usually 5-15% cheaper in the winter as well.

Edit: Seriously though, fuck moving in shitty/cold/wet weather. Definitely dropped shit in the snow/ice before, can't imagine how bad it is to try to carry a damn 30-50lb box of easily breakable shit in the snow/ice...

Yes, moving doesn't suck as much in the south where the weather is nicer in the winter, but it still doesn't resolve the other stuff like school, holidays, and etc...

Edit 2: Ok, I get it. you guys don't have a family and definitely don't got social obligations with other people lol.

 

[Roland the Gunslinger]

Essential housing as nothing but a commodity - read it and weep.

No seriously, we should all be weeping at how we deny people affordable accommodation just so a handful of people can make 10% more profit for that year. It's disgraceful and yet it's reality. Housing is a right, the "market" isn't serving the needs of people it's serving the needs of investors. So the only option left is for Government to step in, since housing is now unaffordable for most of the lower socio-economic class and increasingly so even for many in the middle socio-economic class. Supply & demand principles are meaningless when you manipulate the market to this extent.

 

[Digital_Dreamer]

I live in a small town where incomes are between $20,000-$30,000 / year. My rent in a 2-bedroom was $265 in 1998. Now, the same 2-bedroom is $600. It went up $170 just in the last couple months after local RE agent bought the property with hopes of getting richer.

My income has hardly changed in 22 years, working at a newspaper company and cost of living has skyrocketed.

This is why the rich get richer and the poor get poorer. Most of us are moving out, if not out already.

 

[LDA 6502]

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.

Some municipalities discourage this sort of behavior via tiered property and excise taxes. Primary residences are the lowest, with secondary and investment properties being much higher. Less profit tends to discourage rent seeking.

 

[rnturn]

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.

That may depend on your location. Around here (Chicago 'burbs) there are times when gas prices all seem to rise and fall in lockstep. A penny or two difference in prices -- except for the stations near the expressways (always higher priced) -- is often the best you can hope for and a difference of less then $0.50 for a fill-up is, basically, nothing.

 

[ScreamingFist]

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.

Imagine how addicted to defending capitalism you’d have to be to argue that the East India Company wasn’t capitalism.

 

[killerhurtalot]

I live in a small town where incomes are between $20,000-$30,000 / year. My rent in a 2-bedroom was $265 in 1998. Now, the same 2-bedroom is $600. It went up $170 just in the last couple months after local RE agent bought the property with hopes of getting richer.

My income has hardly changed in 22 years, working at a newspaper company and cost of living has skyrocketed.

This is why the rich get richer and the poor get poorer. Most of us are moving out, if not out already.

That half sounds like it's also a issue with the newspaper... (it's already a dying sector) time to move onto another job/better paying career?

You can get paid better working full remote for customer/tech support companies and etc...

But damn... I would have left the company long a go if my real wage was stagnant for years...

 

[rnturn]

But this does seem like something "in between". When the software is used by ALL the major market players, and the software maker "strongly recommends" not diverging from the suggested rental, that seems like the companies involved are NOT optimizing for their own utility functions, but rather effectively turning over pricing decisions to a "third party cartel administrator" which explicitly seems to take advantage of the cartel power.

The software is the one making the recommendation based on all the competitors' pricing so the individual landlords can all, effectively, say "We did not have this conversation".

 

[rnturn]

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.

It sure appears that it's designed (in part) to create an artificial scarcity which is then used as a reason to jack up rents.

 

[rnturn]

Just having the software wont be enough proof for court. It will have to be shown that they did use it to cartel and not compete.

Ah, so they'll play the "prove our state of mind" card in court.

 

[enilc]

Just having the software wont be enough proof for court. It will have to be shown that they did use it to cartel and not compete.

Ah, so they'll play the "prove our state of mind" card in court.

I think if you're planning on holding them liable for their intent, then 'state of mind' is definitely something that you'd have to prove, logically.

 

[s73v3r]

Just having the software wont be enough proof for court. It will have to be shown that they did use it to cartel and not compete.

Ah, so they'll play the "prove our state of mind" card in court.

Which is yet another example of the way poor people crime is treated differently than rich people crime. Poor people crimes are just defined as "You did the action." You took the loaf of bread. You voted when you weren't supposed to (sometimes even despite being told you could). Rich people crime has the requirement that you prove that, not only did the person have the intent to do wrong, but that they knew that it was a crime as well. In a just world, things like this program wouldn't be able to be used as an excuse for "We're not actually colluding." Although, in a just world, no engineer would ever work on such an evil project.

 

[windnwar]

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.

I think the difference is say your local grocery store isn't plugging all their pricing data into a third party system that their competitors are also using and it then tells both stores what to sell a bottle of Hines Ketchup for. This is basically doing that and more. It's pretty blatantly a cartel, created by a guy who literally got busted for doing the same thing in the airline biz, so now he just added a couple more hoops to make it look legit this time.

I hope that company gets roasted, but I won't hold my breath.

 

[veldrin]

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.

If they were only using public pricing information there would be little question as to the legality. There might be a small crack in the door with regard to keeping units off the market when the software believes there to be an oversupply, but it's a hard argument to make.

By making use of internal client-specific data as to actual rents being charged, though, there is a strong argument that illegal collusion is occurring.

This has already been hashed out with regard to airlines. They tried using their GDSes in a similar way and got spanked for it decades ago. What they do now is use public pricing signals. It's still, in some sense, collusion, but it's not illegal because they do it in public and aren't making backroom agreements with each other. Everybody who cares to look can see exactly what they're doing.

One airline thinks prices should go up, so they increase their published fares. If the rest of the market agrees, they quickly follow suit. If nobody else does, the original airline reverts the change, usually within a few minutes. It's the normal means of price discovery in a free market, just sped up.

 

[HiredGoons]

Just another example reason - housing should not be a commodity. You don't even have to make it one-property per person, property can stay in the market. Just limit both businesses and people to a couple of houses max.

Zoning laws are one of the biggest problems. Soviet Russia got a lot of things wrong, but they actually did housing pretty smartly. Lots of dense mass developments with accessible transportation to city centers are the way to go. Single family housing is a wasteful use of land that creates artificial scarcity when we could be building apartments instead.

Yeah, Soviet urban planning often followed a concept very similar to the modern idea of Super Blocks, where multiple blocks are combined together with vehicle access only on the periphery. This created a pleasant semi-parkland right outside the front door of each building. Basic services were also provided within walking distance, making them a very convenient place to live. In addition, I think there's something to learn about how the Soviet planners were able to build an extremely large amount of relatively high quality housing for a low amount of money. City Beautiful had a video on Soviet urban planning that covers this pretty well.

That said, I think in a free country like the US, there should be difference choices for housing, including single family homes. I just don't think that single family homes should be the only thing that's allowed to be built (the opposite of choice).

edit: typo

I think it's disingenuous to call ourselves a free country when housing remains a luxury that's entirely unaffordable for many except the privileged. As long as housing is treated as an investment vehicle and a commodity those in position to profit the most will always favor laws that maximize their returns at the cost of everyone else.

 

[rnturn]

If an 800 square foot apartment in a complex with minimal amenities is renting at the cap then what happens to your 1200 square foot units in the same complex? That one should be worth more, but you'd be capped and have to rent it at the same price.

And then what about the complex across the street that also has a 1200 square foot apartment, but they have a pool and a gym and tennis courts and covered parking modern updated appliances and in-unit laundry and EV charging, etc? Clearly this one is worth even more, but nope, at the cap so it is the same price as the bare-bones 800 square foot place.

So a rent cap wouldn't take into account square footage? What bonehead city would try and enforce a cap like that?

 

[graylshaped]

Just another example reason - housing should not be a commodity. You don't even have to make it one-property per person, property can stay in the market. Just limit both businesses and people to a couple of houses max.

Zoning laws are one of the biggest problems. Soviet Russia got a lot of things wrong, but they actually did housing pretty smartly. Lots of dense mass developments with accessible transportation to city centers are the way to go. Single family housing is a wasteful use of land that creates artificial scarcity when we could be building apartments instead.

Yeah, Soviet urban planning often followed a concept very similar to the modern idea of Super
Blocks, where multiple blocks are combined together with vehicle access only on the periphery. This created a pleasant semi-parkland right outside the front door of each building. Basic services were also provided within walking distance, making them a very convenient place to live. In addition, I think there's something to learn about how the Soviet planners were able to build an extremely large amount of relatively high quality housing for a low amount of money. City Beautiful had a video on Soviet urban planning that coverts this pretty well.

That said, I think in a free country like the US, there should be difference choices for housing, including single family homes. I just don't think that single family homes should be the only thing that's allowed to be built (the opposite of choice).

One thing American planners have to do if building a superblock that Soviets didn't worry so much about is ensuring adequate parking spaces (e.g. in a separate parking garage, or parking lot, etc).

Not so many people had cars in the Soviet Union (yes, I know there WERE cars in the Soviet Union, but my understanding is that only the 'elite' approx 10-15% of people in the Party had the cars). Everyone else walked, rode a bike, or took public transit, no?

True, high parking requirements would reduce the viability of the concept. A lot of these buildings do have parking, but probably not enough to support US levels of car ownership and I suspect that a lot of it was added after the fact. Parking is the enemy of density, or at least density at a reasonable cost. Parking could be built into the lower levels of residential towers (used to live in a building like this, first 6 floors of 25 were almost all parking), but this would of course raise the cost. So the concept would probably make the most sense in dense urban areas with relatively low levels of car ownership.

Many local apartment projects have gone to the city council to ask for wavers on parking requirements. We have a trailer park not too far from us that has NO parking for residents' guests, so often find cars parked in front of our house for days on end, and reject such requests, as do all our neighbors.

I am okay if some consider my position selfish.

 

[Ser Simian]

Just another example reason - housing should not be a commodity. You don't even have to make it one-property per person, property can stay in the market. Just limit both businesses and people to a couple of houses max.

An issue with that is huge areas are primarily vacation areas. I absolutely understand that can drive up locals housing prices and rental rates a ton. And that is an issue. But there is only a local economy and a reason for a lot of people to live there, because it is a vacation destination. And thus most people who own property own it only to vacation there. Or to rent it to others who want to vacation there. I am not sure how you fix that.

On other markets, I think the only way to fix lots of people being landlords and renting places out, would be that the government needs to step in and help people buy a property. Otherwise even if you limited ownership to get rid of landlords, vastly cratering housing prices, many of the people who rent, still couldn't own. They don't have the liquid funds for a mortgage and closing costs, or they don't have the credit, etc.

And I guess you could reform those markets to get rid of things like credit. But that also drives up loan costs for everyone else if you get rid of anything to look at to see how likely someone is to be able to pay back the loan they've taken out.

Etc.

I guess I don't see either of these things as particularly thorny issues that would be hard to solve.

For vacation/tourist destinations, rich people can stay in hotels/motels, just like everyone else. Or if you still must be fancy, even some sort of resort-style digs, where maybe you can stay in your own little bungalo or what not. The point being that short-term visitors don't get to individually own housing that could be better used by locals, i.e. by people who actually live there and just need a roof over their heads.

As for landlords, I don't see why the government would need to subsidize the purchase of their properties by normal people. If so many people have bad credit that they can't get a loan for the price that you're asking, then you lower the price until it sells. Boom! Problem solved. That's just the market at work. Sure, some landlords might take a loss, but that's the price we'll have to pay to solve the housing crisis. More broadly, my point is that there's no such thing as a free market; all markets are regulated to some extent. Right now the housing market is set up to funnel money from wage earners to capital holders. There's nothing stopping us from changing the market to strongly encourage a more equitable distribution of housing.

 

[Fnord666]

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.

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.

I like that. Everything is a service now, so why not PFaaS (Price Fixing as a Service).

 

[graylshaped]

Just another example reason - housing should not be a commodity. You don't even have to make it one-property per person, property can stay in the market. Just limit both businesses and people to a couple of houses max.

An issue with that is huge areas are primarily vacation areas. I absolutely understand that can drive up locals housing prices and rental rates a ton. And that is an issue. But there is only a local economy and a reason for a lot of people to live there, because it is a vacation destination. And thus most people who own property own it only to vacation there. Or to rent it to others who want to vacation there. I am not sure how you fix that.

On other markets, I think the only way to fix lots of people being landlords and renting places out, would be that the government needs to step in and help people buy a property. Otherwise even if you limited ownership to get rid of landlords, vastly cratering housing prices, many of the people who rent, still couldn't own. They don't have the liquid funds for a mortgage and closing costs, or they don't have the credit, etc.

And I guess you could reform those markets to get rid of things like credit. But that also drives up loan costs for everyone else if you get rid of anything to look at to see how likely someone is to be able to pay back the loan they've taken out.

Etc.

I guess I don't see either of these things as particularly thorny issues that would be hard to solve.

For vacation/tourist destinations, rich people can stay in hotels/motels, just like everyone else. Or if you still must be fancy, even some sort of resort-style digs, where maybe you can stay in your own little bungalo or what not. The point being that short-term visitors don't get to individually own housing that could be better used by locals, i.e. by people who actually live there and just need a roof over their heads.

As for landlords, I don't see why the government would need to subsidize the purchase of their properties by normal people. If so many people have bad credit that they can't get a loan for the price that you're asking, then you lower the price until it sells. Boom! Problem solved. That's just the market at work. Sure, some landlords might take a loss, but that's the price we'll have to pay to solve the housing crisis. More broadly, my point is that there's no such thing as a free market; all markets are regulated to some extent. Right now the housing market is set up to funnel money from wage earners to capital holders. There's nothing stopping us from changing the market to strongly encourage a more equitable distribution of housing.

Parking spaces take up land. In a beach town, land isn't cheap. I understand why develeopers want parking requirements waived.

They can make enough money while not offloading their future tenants' needs onto the public streets.

 

[Spiral Jumper]

A.L.A.S.

All landlords are scum.

 

[DM_Sledge]

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.

Gas is different because the majority of time the price is dictated by a couple of wholesalers that "totally don't collude with each other". The stations themselves usually make only slim margins on top of that.

 

[graylshaped]

A.L.A.S.

All landlords are scum.

My mother-in-law might not disagree with you, since we have not replaced her clothes drier as she requested. On the other hand, when she travels, her landlord does stop by to make sure the cat is fed.

 

[TylerH]

[5 companies] which together manage hundreds of thousands of apartments.

Aside from the general scummy feeling one gets from reading that sentence, seems kind of like an oligopoly and a violation of the Sherman Act.

IANAL, but the situation here arguably rises to the level of 'allegedly entering into tacit agreements where only circumstantial evidence is available', which is one of the types of collusion laid out in the Act:

They all use this software, they all know they all use this software, and they all know what this software does (increase prices, ignore 'human' considerations like empathy, limit availability, etc.) and they all know that the end goal being to maximize profits and maintain high demand.

 

[graylshaped]

[5 companies] which together manage hundreds of thousands of apartments.

Aside from the general scummy feeling one gets from reading that sentence, seems kind of like an oligopoly and a violation of the Sherman Act.

IANAL, but the situation here arguably rises to the level of 'allegedly entering into tacit agreements where only circumstantial evidence is available', which is one of the types of collusion laid out in the Act:

They all use this software, they all know they all use this software, and they all know what this software does (increase prices, ignore 'human' considerations like empathy, limit availability, etc.) and they all know that the end goal being to maximize profits and maintain high demand.

The software AS DESIGNED is intended to raise prices on its clients' behalf.

The more clients they have, the bigger the impact. Anti-competition at its finest. Decent lawyers will carve them up like a Thanskgiving turkey. Odds are they will settle and admit no wrong-doing, though, and continue their nefarious business.

 

[Faustius23]

Once again, I should have read the complaint before posting my reply to JohnDeL above! It appears that there actually IS an explicit agreement to follow the algorithm's pricing recommendations. At least if the complaint is correct:

"If there is a disagreement between the participating Lessor and the RealPage Pricing Advisor, the dispute is often elevated to the Lessor’s management for resolution, and specific reasons justifying a departure from RealPage’s pricing level are usually required. But RealPage emphasizes the need for discipline among participating Lessors and urges them that for its coordinated algorithmic pricing to be the most successful in increasing rents, participating Lessors must adopt RealPage’s pricing at least 80% of the time. "

Also, the firm representing the plaintiff's has some heavyweight antitrust/economics (incl TWO PhDs!) lawyers on board. I think that I'll buy some popcorn; this one should be fun to watch!

"participating Lessors must adopt RealPage’s pricing at least 80% of the time."

Wow. I wonder what the "or else" is. It sure seems like there is an "or else".

 

[reever]

Funny, where I work we dropped RealPage because they couldn't do simple AP functions properly for the one property they were hired for. A high school student could have done a better job paying bills on time

 

[MrTom]

I'd like to know how much profit landlords made in 2000, 2010 and 2020. Was the profit the same in these 20 years?

Did the pricing rise due to things outside their control, so their profit has always been the same? Or has their profit increased every year they raise the rent? I think this information could have a detrimental affect on the case.

 

[Basil Forthrightly]

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!

I am reminded of what the cartel hit man said in the cheesy action movie I watched recently: “nothing personal, just business”.

When a business screws someone over for profit, it’s always personal on the other side of it, no matter what the bad guys say to themselves to make them feel better. Yes, sometimes market forces make a company have to choose least-bad choices, but this isn’t one of those cases.

 

[panderson420]

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.

Agreed.

Which Federal law exactly is Bob violating though?

As far as I'm aware, that would just be called a 'pricing consultant' or a 'pricing analyst' and that is a legal career path with many available jobs as a quick Google search will show.

What is a Pricing Analyst?

A pricing analyst is responsible for analyzing competitor pricing matched with market expectations to determine the ideal target price for products of the business. Duties include providing thorough analytical breakdowns of pricing structures and sales funnels of similar competitor products and services and identifying specific strategies used in pricing models of the same. Reports are written in order to evaluate the findings and to propose the results to the relevant departments for effect. Depending on the company, pricing analysts may progress into managerial roles involving financial account management and analysis.

https://www.glassdoor.com/Job-Descripti ... nalyst.htm

As far as I can tell that is exactly what the software is doing.

Are you saying the entire field is illegal somehow and nobody has noticed, or am I missing your point?

If everyone is using the same consultant, yeah, the same price fixing and collusion arguments would apply.

Can you cite the law?

 

[Spiral Jumper]

A.L.A.S.

All landlords are scum.

My mother-in-law might not disagree with you, since we have not replaced her clothes drier as she requested. On the other hand, when she travels, her landlord does stop by to make sure the cat is fed.

I’m sure you’re one of the good ones lol.

For real though, pointing out that profiting off the predatory and exploitative commodification of housing is a bad thing, and that most people who do so tend to be shitbags, is not a personal attack on you. If you have an adu or family property, there’s no bloody Maoist revolution coming for you, so relax.

But what the fuck bud, replace the dryer. If you rented it to her with a dryer, and now there’s no dryer, and you haven’t reduced her rent, that’s bad.

 

[KDogg]

In Propublica's article on the study it says:

"Such agents sometimes hesitated to push rents higher. Roper said they were often peers of the people they were renting to. “We said there’s way too much empathy going on here,” he said. “This is one of the reasons we wanted to get pricing off-site.”"

I just wanted to say that if you find yourself thinking / saying / acting upon the idea that "there's way too much empathy going on here" then the answer to the question "Are we the baddies?" would be a unequivocal YES.

 

[Longmile149]

Funny, where I work we dropped RealPage because they couldn't do simple AP functions properly for the one property they were hired for. A high school student could have done a better job paying bills on time

The shady cartel that makes money by driving families into homelessness and poverty by price fixing and market manipulation isn’t great about making sure their own bills are paid?

I, for one, am very surprised.

 

[alewisa]

"“RealPage’s revenue management solutions prioritize a property’s own internal supply/demand dynamics over external factors such as competitors’ rents,”"

Wtaf? What fucking "internal supply/demand dynamics" does a property have, it's an empty house fer crissakes!

Jesus, is it possible for anyone to speak in plain language anymore?

Unless of course, potential viewers are being profiled, including their income and expenditure, and the rental price is adjusted upwards on the basis of better-heeled clients...

 

[Longmile149]

I'd like to know how much profit landlords made in 2000, 2010 and 2020. Was the profit the same in these 20 years?

Did the pricing rise due to things outside their control, so their profit has always been the same? Or has their profit increased every year they raise the rent? I think this information could have a detrimental affect on the case.

If you’re asking if the cost of home ownership has risen at the same rate as the cost of rent, the answer is no, not even close.

They justify raising rents by pretending that making a smaller profit by not extorting the maximum possible rent from every tenant is the same as losing money.

It’s literally what the lawsuit is about. They collude with landlords and rental companies via their software to increase rates across the entire country to ensure that no renters can find lower rates, guaranteeing that all their associated morherfu…sorry, client landlords can extract maximum rents without competing with one another.

They brag about 5-12% yoy returns.

Five to twelve percent increases *every year.*

 

[Faustius23]

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.

Agreed.

Which Federal law exactly is Bob violating though?

As far as I'm aware, that would just be called a 'pricing consultant' or a 'pricing analyst' and that is a legal career path with many available jobs as a quick Google search will show.

What is a Pricing Analyst?

A pricing analyst is responsible for analyzing competitor pricing matched with market expectations to determine the ideal target price for products of the business. Duties include providing thorough analytical breakdowns of pricing structures and sales funnels of similar competitor products and services and identifying specific strategies used in pricing models of the same. Reports are written in order to evaluate the findings and to propose the results to the relevant departments for effect. Depending on the company, pricing analysts may progress into managerial roles involving financial account management and analysis.

https://www.glassdoor.com/Job-Descripti ... nalyst.htm

As far as I can tell that is exactly what the software is doing.

Are you saying the entire field is illegal somehow and nobody has noticed, or am I missing your point?

If everyone is using the same consultant, yeah, the same price fixing and collusion arguments would apply.

Can you cite the law?

IANAL, but I believe horizontal price fixing is illegal under section 1 of the Sherman Act. Under CA law it violates Business & Professions Code § 16726.

But you could have Googled that yourself. So I assume you're leading up to making some kind of argument that price fixing isn't illegal?

If so, go for it.

 

[alewisa]

Funny, where I work we dropped RealPage because they couldn't do simple AP functions properly for the one property they were hired for. A high school student could have done a better job paying bills on time

Ah, but thats deliberate. See, its all about managing cash flow, and keeping as much money in the bank for as long as possible. Tenants will rent on-time, and there is a £25 admin fee for late payment, On other hand,. dont pay bills until the absolute last minute. The day after if possible.

 

[JPMeyer]

Just having the software wont be enough proof for court. It will have to be shown that they did use it to cartel and not compete.

Ah, so they'll play the "prove our state of mind" card in court.

Based on reading the complaint linked in the article, it sounds to me like the defendants did a really great job of proving their state of mind in their own words. The complaint is chock full of quotes from marketing and training materials of the software vendor and comments from landlords. The facts that 1) the software was designed to allow landlords to increase prices more than otherwise; 2) that it was successful in achieving that result and 3) that the system included compliance mechanisms intended to assure that almost all landlords followed the pricing recommendations are quite well established in the complaint. I'm sure that the defendants will hire very good lawyers who will throw lots of FUD around, but I think that the complaint states a very sound claim and backs it up with more than adequate (for a complaint) evidence. I think that this complaint was drafted with surviving a motion to dismiss in mind with the idea that discovery will turn up even more smoking guns.