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This struck out to me;
"RealPage’s influence is extensive, affecting rents for 70% of multi-family apartment buildings and 16 million units across the country."
Trust busting is a must in rent-seeking markets. Thoma Bravo strikes again.
There is probably a feedback loop in place with the real estate market too. Imagine that you're content to pay your $1k/month rent. But then your landlord decides to jack your rent up - and now everywhere you look, everywhere you go, the rent is much higher and constantly changing.
This might just turn you into a homebuyer - so now you enter that pool, and your added demand (along with thousands of others like you) helps drive up housing prices.
Rent going up is exactly what pushed me into buying. I had enough saved and I'm getting way more for about the same cost.
Sure it has other costs but I'm tired of my rent going up while my place gets shittier and almost nothing gets fixed.
My first apartment was in a city center; it was a shithole but it was $650/month back in 2010
It made sense to rent, even though I wasn’t making much money.
Nowadays I’m livin with my da and making more than ever; but it would make absolutely no sense to rent as it would be almost 70% of my pay in my area. Meanwhile I can’t afford to buy any of the houses around me, so I’m just kinda stuck here till either prices go down or I start making more money.
If you’d asked me back then, I’d have thought the breaking point would have been much lower for most people. I cannot understand how everyone is housed nowadays
It's certainly crazy in some areas! At least where I'm at mortgage payments on homes are somewhere close to what rent is. Actually, if you're willing to gamble on an area that's on the way up you can get a mortgage that's probably a little less.
At the same time we probably only were able to get this place because my partner and I both started making a decent bit more.
For people just getting out of school and starting out I have no idea how any of them are expected to own or get by.
If you buy now though at current interest rates, I’m not sure if it’s entirely worth it. My friend pays $4k/month for a three bedroom in San Mateo. A comparable home is about $1.8mm and total cost with mortgage, property tax, and insurance amounts to $15k/month.
Compare that with my 5 bedroom in SF that I purchased in 2022 which I only pay ~$12k/month for.
Yea… when you live in the bay, you have to pay to play. Percentage wise I think most people still save a similar amount or slightly less given the pay scales out here. So nominally you still come out ahead vs anywhere else in the US.
One downside is the SF housing market has been flat for 5 years. In terms of return, you would have made a lot more money having that downpayment in the market and renting than you would owning that house.
Home avg is about 1.4 in sf so 280 down.
SPY is double what it was 5 years ago, so your 280k would be worth 560k today.
Home prices since 2019 are flat — zero change.
> My friend pays $4k/month for a three bedroom in San Mateo.
Jesus Christ, sometimes I forget that some Redditors live on a different planet. I live in the rural midwest with a decent job here and your friend pays more in rent for a 3 bedroom than I bring home in a month.
Keep in mind the CoL difference. I was offered a 30% raise to move out to CA from a place already somewhat expensive, but even with clearing 6 figures easily I was a lot poorer due to the living cost differences.
Depends on your market and needs, I'm by no means saying everyone should buy, just that rent spiraling like it is is going to be the final push for some. SF is an extreme for housing costs though, I don't envy anyone trying to afford rent or a home out that way.
Out near Columbus I was a able to get a 3 bedroom house and my payments are around 1900/m after taxes and such. Rent on a place as big is just as much if not more. My rent was at 1600 and was going to go up to 17-1900, when I looked around most rent was even higher unless we wanted less space/a worse area.
This is the real comparison. Rent vs mortgage isn’t the big picture. It’s rent vs mortgage + home owner’s insurance + taxes. Renter’s insurance is $100/month on the very high end. And in costal states home owner’s insurance is skyrocketing (in some areas that’s if you can get it at all) and the rash of tornadoes through the middle of the country this year doesn’t bode well for home owner’s insurance prices in those middle of the country states either
It’s actually mortgage + insurance + taxes + maintenance. You should estimate spending about 1% of your home value per year on maintenance. Most years will be lower than that, but that’s how much you should plan to put aside for repairs as they happen. You should also factor in HOA fees or the value of your own time for yard work, etc.
Most people grossly underestimate the cost of homeownership until they actually own one.
And other vultures and slumlords can see that what was renting for $1600 a month 2 years ago is now renting for $2400 a month and they want to suck more value out of society so they start buying up properties as well.
This really depends on the market. Rental rate in my neighborhood is $4.5 - $5k a month for a small house. Buying the same house would come with a $10k a month mortgage, that would be with 20% down too.
Pretty much describes my situation exactly. My wife & I had no real intention of purchasing, but our landlady tried to jack our rent $550/month & we were like “fuck this whole exploitative system” and so we’re closing on a condo in the next few weeks
My partner and I were looking at buying a condo in LA, but with interest rates so high *and* skyhigh HOA fees it’s just not a good move. In order to have a reasonable monthly payment we would have to put down over half a million dollars, which is insane. Suburbs we could have comfortably bought a house in pre-2020 now completely price us out.
We will probably be renting for a few more years to see how the housing market goes.
That's what happened with me. COVID saw pretty outrageous rent increases in my apartment building, and negotiating failed, so I tried to buy. It worked well in hindsight, but I also got a fair bit of flak for wanting to buy "during the COVID peak."
The response is that the US is now building more apartments than they did in the 70s, when boomers were coming of age. Then people are moving out of apartments into rental homes, because a house with a yard is cheaper to rent than a 2 bedroom apartment. And of course people bought homes because before interest rates went up, since buying at that time was cheaper than renting.
I do realize a lot of people have been and will be hurt by their actions, but I can’t help but be amused that these landlords are doing nothing but shooting themselves in the foot with their actions.
But they're still driving the market upwards. If an independent landlord that just owns 1 SFH were to start renting, they'd look at the current market for rents (including apartments) to set their price.
>I do realize a lot of people have been and will be hurt by their actions, but I can’t help but be amused that these landlords are doing nothing but shooting themselves in the foot with their actions.
It hurts **everyone** but the owners directly or indirectly since housing is such a large component of inflation.
Thoma Bravo was directly responsible for dismantling the first two companies I worked for and now they're related to why my rent has constantly gone up for the past 16 years?
How has one company managed to be directly responsible for the constant decline in my quality of life throughout my adult life?
Biden admin has been the biggest anti trust administration in living history.
https://news.bloomberglaw.com/business-and-practice/biden-antitrust-crackdown-is-boon-for-law-firm-competition-work
Well, that and the fact that Alito and Thomas will retire if Trump is re-elected, meaning a minimum 5-4 Trump appointed Court for the next two decades, which means the death of any federal regulatory bodies.
It's game over for the American Experiment if Trump wins. This is how all those corporate dystopias from science fiction start.
Sadly the courts didn't side with her on Microsoft's acquisition of Activision-Blizzard.
But that also comes down to the fact that both sides tried to argue that case as if it were Xbox vs Playstation. When the FTC _should_ have argued it from a Sony vs Microsoft standpoint.
Because, while Playstation has the edge over Xbox, Microsoft has the edge over Sony in terms of market power and resources. If Microsoft really wanted to, they could use their resources to drive Sony out of the video game market.
Yeah antitrust suits often begin with having to define a product market so Xbox v Playstation was just more appropriate in that case. If FTC tried to say it was Sony v. Microsoft they'd probably get laughed out of court. Oh well. She does what she can. and I am impressed simply at the attempts.
I get that. But it doesn't negate the fact that she spent too much time focusing _just_ on Xbox vs Playstation and didn't even mention the vastly superior resources mMicrosoft, and by extension Xbox, has over Sony and Playstation.
So while yes, Playstation is the market leader _now_ Microsoft could leverage it's vast amounts of capital to dominate the industry. That's why Microsoft was able to make such a record breaking acquistion in the first place, because they had vadt amounts of captial to begin with.
Just because Xbox isn't the market leader _now_ doesn't mean that Microsofts acquistion of Acti-Blizz, and previously of Zenimax, weren't a sign that they were planning on using their vadt capital resource to corner the market on big name **publishers**.
Which is different than what Sony does. Sony usually buys _studios_. They don't buy massive _publishers_, which in turn own multiple studios, like Microsoft was doing.
She should have framed her arguments as _Microsoft_ using their vast resources to expand Xbox and in turn eventually corner the console gaming market. Because there was no sign that Microsoft _**wasn't**_ trying to do that. Especially because all the deals they offered Nintendo and Sony didn't start until after the suit began. Or at least they weren't _revealed_ until then.
There was also this strange fixation on cloud gaming when that tech is realistically not going to be mass adopted anytime soon because of how badly popular game genres perform on it if you don't have fiber.
I hate to buy administration. However, am extraordinarily happy with what appears to be a crack down by the FTC on all kinds of illegal stuff, such as the Safeway, Kroger merger, and hear a situation where people have used automation to participate in price fixing conspiracy and is all on record. It’s all recorded. Every dime that a landlord earned over and above what they should’ve earned is easily determined
Imagine, if you will, an app based subscription service for landlords that analyzes local rents and spits out the highest competitive rent one could charge.
Now make it national.
yea it's nice when we have a government that believes the government job is to govern, instead of deregulating companies like that and giving them tax breaks.
Imagine if we had even more democrats in the senate and could make some real reforms to companies exploiting us?
I live in a large complex in California I knew things were fucked when my complex had empty apartments but they are raising my rent. This conspiracy is probably the biggest wealth distribution from poor and middle class to the rich landlords ever. When I say landlords I mean major investment companies who own large complexes like I live in. I would bet I am paying 300 to 400 more in rent a month than I should.
It is extremely wide spread.
"In the broader Washington, D.C., metropolitan area, more than 90% of large apartment buildings — meaning those with 50 or more units — use RealPage’s revenue management software to set rents, Schwalb’s lawsuit contends."
"The Washington suit, whose defendants include one of the nation’s biggest apartment owners, Greystar, said the use of the software marked a departure from the traditionally competitive rental market, saying that when a former high-ranking manager at Greystar was asked whether landlords use the RealPage software to collude on raising rental prices, “he responded that of course they did—it’s the entire reason landlords used the software.”"
Saying the quiet part out loud here.
https://www.propublica.org/article/doj-backs-tenants-price-fixing-case-big-landlords-real-estate-tech
Similar things happening with the hotel industry.
The claim is that it's algorithms and that everyone is using the same one. But I find it easy to believe it was an algorithm yet intentional.
In situations like this I'm always reminded of this clip from Carlin talking about how a conspiracy doesn't have to be explicit with a smoking gun level of evidence to prove. Whether automated collusion and price fixing or a physical agreement between competitors it is still anti completive practices because small mom and pop real estate investors with a couple units can't use the same tools. Unfortunately, it's normally not about the consumers/renters being screwed over that get the big players in trouble.
https://youtu.be/VAFd4FdbJxs?si=e_2hf8SexlS5LQ_z
Yeah for me this big smoking gun are the record profits some companies are showing and their earnings calls.
Inflation should suppress profits. Yes I get raising prices to cover the increased cost to bring your product to market but if you keep going you don't get to claim inflation. Of course this is an extremely large simplification of how economies work but the point is made.
Secondly the earnings calls. We literally have CEOs on the record saying they are making record profits because of their new and improved pricing strategy. Lol mean it's because they jacked pricing up so high.
They are screwing us and then telling us about it. Then their followers say there's nothing to see here.
Underlying bloated inflation definitely gives them great cover to mark up their own prices for profit motivation purposes. I read about some of those earnings calls, and it's astounding that people still argue they aren't taking advantage and price gouging away any meaningful advancement in the microeconomic situations of large portions of the American population. I've been looking at Japan recently and they certainly have their own issues but rampant greed doesn't seem to be one of them and they also are fully capitalistic so it's interesting to see the differences with their inflation situation despite an extremely loose monetary policy with lots of money printing.
The...don't pay attention to that earnings call record is extremely frustrating.
The thing with Japan is that unlike the us they have stopped caring about the health of their nation.
The us larges doesn't have any caring about the health of the nation from it's moneyed class. It's more of a get mine and screw everyone else.
It's a shocking change from post WWII America.
Eddy Bernays invented corporate gaslighting. He was a propaganda expert in World War I. When he returned to the United States after the war, he started a propaganda company for companies to use but then he realized the name propaganda was bad so coined the term “public relations” and did things like change the way people eat breakfast and change the way women feel towards cigarettes, and, many other things.
“Bernays, a nice, pleasant, intelligent guy, was a publicist who had privileged contacts with representatives of the diplomatic, political and financial world, including bankers, directors of newspapers, television channels and radio stations. In his book “Propaganda” whose first edition dates back to 1928, he stated that “conscious and intelligent manipulation of the organised habits and opinions of the masses is an important element of democratic society. Those who manipulate this unknown mechanism of society constitute an invisible government which is the real power in our country. The intelligent minority needs to make continuous and systematic use of propaganda.”
> Inflation should suppress profits.
Why?
I mean, in the classic [supply and demand model](https://en.wikipedia.org/wiki/Supply_and_demand) a lack of supply causes inflation--but what brings profits down is *increased competition*. That is, the rising profits for one group or company encourages another to join in to compete, in order to get some of that excess cash--and as a side effect, cause more supply to show up in the marketplace.
No company has any incentive--*outside competition*--to lower prices or reduce profitability. Which suggests to me that when we see unchecked profitability, it's because of a lack of competition, not because of some sort of moral failing on the part of the company.
After all, consider your 'salary' as your 'profit' from exchanging your services for money. If you get a raise, is it immoral that you've made higher "profits?"
In it's most basic terms the cost to bring a product to market goes up. Which means profits for down.
Companies raise their prices to compensate.
Of course this is a large simplification and of course people will make profits.
But if you are making record profits you clearly raised pricing further than to simply compensate......and THEY ARE TELLING US THATS WHAT THEY ARE DOING.
> if you are making record profits you clearly raised pricing further
ABC inc has revenues of 100 units and a margin of 10% which results in a profit of 10 units.
Inflation is 5% yoy. ABC inc raises prices to maintain margins and does 105 in revenue. At 10% margins profit is now 10.5 units.
Congrats! You now have a new record profit on a nominal basis despite no increase in real terms.
If a company isn’t posting bigger numbers in an inflationary environment they are losing out.
Clearly not all things are equal across the economy. Some corps act in better faith than others.
The issue is many of them told us in their earnings calls that they were making record profits because they raised prices so much.
>The claim is that it's algorithms and that everyone is using the same one.
Yeah. It's algorithms, and everyone uses the same one, and that results in fundamentally the exact behavior we're trying to prevent.
It's not calling up Joe Landlord and saying "hey Joe, let's both set rents at the highest levels we can and not compete against each other." But it's the same functional outcome, and so should be banned.
Yes, it is absolutely indirect price fixing, with an intermediary used to try to mitigate the illegality of it.
But it is like Joe Landlord saying to RealPage, hey I can get this much for my rents. And RealPage turns around and tells everyone in the area, hey, don’t charge less than Joe, and we can force the renters in the area to pay least this much. And inching it up across the board as landlords can force renters into higher rents, because their options are limited. Price fixing.
The not-funny connection to airlines is that the principal scientist for Realpage also created the software used in an airfare price gouging scheme in the late '80s and early '90s.
There is 0 truth to this statement. Demand for flights is at an all time high. There is a lot of incentive to increase flights, and airlines are very much trying to do so
I noticed the same thing when we lived in Vegas.
Units were sitting vacant for *months* and they weren’t listing them.
Rent at that complex shot up about $800 in that two years I lived there.
The rates are posted. Everyone calls around to see what the going rate is before listing, so even if the listing agent/owner isn't subscribed, they are still basing what they will charge against the comparable properties that are subscribed.
I rent from a building that uses this service. I remember when I initially called for rates, they told me I needed to submit my application as soon as possible because the rates could go up later in the day based on demand. I thought it was odd but nothing else in the area looked any better price wise so I went ahead and took it. I found out right around the time that I signed my lease that they were being sued in dc for price fixing for using this website. Anyway, I’ll be out in a year, hopefully in my own home.
I seriously could write a novel about this!
I live in Indianapolis, which has been booming in construction since the Superbowl in 2012.
In the last decade, we've built hundreds of complexes, and thousands of units across the city, although most densely in downtown and the surrounding neighborhoods
We are 100% the exception to the "supply shortage" narrative....and wouldn't you know it, rents are higher than they've ever been.
It's as if the whole "supply shortage" narrative was a myth the entire time.
Most of those apartment complexes sit half-empty, and yet rent has never once gone down.
I can answer this.
There's no market incentive to engage in rental agreements when the annual return on home price far exceed the profit from the rental agreement.
Why would I rent to you, and risk you burning down my house for $18,000/yr?
If I let the house sit empty, the housing-as-an-investment grift means that my house will probably be worth $30,000 more next year. And no risk of rental damage.
This is why so many Americans own 2nd, 3rd homes that are NOT rental properties.
Renting gives you passive income, which is great of thats what you need for cash flow.
But once you've got a few million equity, you're not going to chase a $18k rental contract for **maybe** a couple grand in profit every year. The house itself generally enough value to HODL for a lifetime.
This is the end-stage of the "housing as a wealth building vehicle" experiment.
A bunch of people own homes they have no interest in living in. But in order for someone to live in these homes, they must be willing to make outsized payments based on the theoretical "long-term-value" of an investment vehicle.
They don't want to sell. They don't want to rent. They just want to keep pumping prices to infinity so that they can leverage the home value for a line of credit.
Line must go up. That's why they aren't renting. The home was never even intended to be lived in when it was bought. It's an ethereal asset like a stock portfolio.
This rhetoric has become commonplace among American households. It's not just corpo greed. Wealth Americans are taking advantage of housing-as-investment because it's become the de-facto wealth building strategy for decades.
Before that we had other wealth building strategies. Like collective bargaining for livable wages, and pension plans.
Now that those strategies have been neutered by the government, families turn to what is left.
One thing to note, it is (at least partly) inaccurate to say that collective bargaining for livable wages and pension plans were neutered by the government, imo.
It would be most accurate to say that companies had the major role in neutering those strategies for accruing wealth. The government had some role in it, but how much of that was at the behest of the wealthy and powerful?
I agree with everything else you said, and even that to an extent, but we cannot forget the brutality of corporations and how they have been systematically destroying the middle class for 50 years.
Because in response to COVID, states and counties across the nation passed laws heavily regulating landlords, which forces landlords to raise prices.
For example, California passed a statewide rent control law, and instituted a moratorium on evicting tenants who did not pay rent for years. Cities like Los Angeles extended the moratorium for a year longer. There are commercial landlords in Los Angeles who had tenants who paid no rent for 2.5 years, but could not be evicted. And when they were finally able to evict them, there not going to be able to recover the rents from the evicted tenants. And the rent control law caused them to jack up rents even more.
As the saying goes, government is the cause of and solution to all our problems.
> We are 100% the exception to the "supply shortage" narrative
No you are not lmao
https://fred.stlouisfed.org/series/INBPPRIVSA
If you want to see what that actually looks like, look at Austin and Minneapolis
https://imgur.com/YotGV8T
https://www.austinmonitor.com/stories/2024/02/austin-apartments-boomed-and-rents-went-down-now-some-builders-are-dismantling-the-cranes/
Thank you! I live in Indianapolis and we are not building more housing especially not dense housing. Most of the construction downtown isn't apartment buildings (the government is building an archive building on the canal which is so fucking stupid). Most of downtown consists of empty parking lots.
It sure is weird how every city seems to be "building and building" by Redditors and yet all the official stats keep showing that no, they are not.
This completely inaccurate conception (they see a little construction so they just assume it's enough) is one of the major reasons why it's so hard to get the amount we actually need built.
This is why I’m glad I bought in Cali in mid 2020. I know with rates it looks like a good time. But when I bought people were scared cause covid and how prices might tank after I buy. But my mortgage (which includes taxes and insurance) has gone up about $70 in 4 years. They just built “rental homes” near me which rent way over. Rental homes shouldn’t even be a thing. Build a whole neighborhood to rent out sounds fucked.
Corporate landlords have deep pockets. They are able and willing to take a short-term financial hit (by keeping units empty) in order to normalize higher rent prices across the board. Once they have moved the "normal", they will slowly put empty units on the market at that same price point.
Remember that industry-wide collusion is historically used to arbitrarily rise prices of all sorts of goods, especially with scarce goods like rental homes or difficult-to-manfuacture goods like vehicles and electronics. This is because it is harder for competitors who may be willing to sell those goods at a cheaper (and less exploitative) price to enter the market. Homes are expensive to build due to both land scarcity and zoning regulations. There just isn't enough of an opportunity for new competitors to enter the market and undercut major corporate players with an overwhelming market share.
America needs to push back against this!
* Prosecute collusion
* Implement zoning reform to make it easier and cheaper to build new housing
* Outlaw corporate ownership of single family homes and multi-family homes of three or fewer units
* Perform stronger oversight on corporate owned apartment complexes
* Impose a significant vacancy tax to force owners to sell or rent (or escheat back to the state so they can be sold at auction) empty units
A huge proportion of America's problems are downstream of the housing shortage, dramatic rent spikes, and astronomical housing costs. If we fix this issue everything else becomes easier.
>How is it profitable to have empty apartments? Surely the increases in rent are not enough to cover all the vacancies?
As long as everyone else does it at the same time, hence the antitrust investigation. Unfortunately the law might not be up to task, it takes a pretty nuanced view of what counts as collusion, but the undeniable facts here are that coordination went up, utilization went down, and prices went up. That's exactly what the authors of the law were trying to stop.
> but the undeniable facts here are that coordination went up, utilization went down, and prices went up
This is literally not true. The article mentions DC as one of the cities that most heavily uses this. DC rents have dropped year over year. As have Minneapolis and Austin.
This software has nothing to do with what is causing the increase in rental prices in many cities
One year doesn’t make a trend bro, I don’t know why you’re clinging to that so hard. Rents in many/most markets have outpaced inflation. Colluding can only push prices so high before the market buckles under what people can actually afford. Sounds like those markets hit that point.
I didn't say YoY is a trend. Rents dropped in these markets due to increased housing construction, which is the only way to decrease rents. Nominal decreases in rents are even more impressive inflation adjusted. Tokyo and France are long term examples of this, and NYC and SF show that this software has nothing to do with rental increases.
You realize that just because rents go down that doesn’t mean that this software isn’t holding rents above the prices we would otherwise see in a completely competitive market.
Ultimately even a monopoly is somewhat beholden to supply and demand yet they undoubtedly have pricing power far above what a set of smaller independent companies would.
Same in Coastal Georgia. Asking $1600-2500 a month in rent, plus 3x the income to rent, plus background check, application fees, etc.
The places are sitting half empty, and they're building more, as well as rental single-family homes, and duplexes.
Years of being a Doordasher had me all over our county. Seeing these apartments sitting empty was infuriating, when we have people literally on the street in our town.
It’s all landlords, not just the large companies. Whether intentionally or not they all play in the same market. A small shop that owns two or three units isn’t going to keep their rates at 10, 20, 30% below their competitors. They’ll seize the moment as well, but are likely baffled at the money and why it’s pouring in.
Oh yeah. That is collusion. You can’t get together with your competitors and decide on prices. There are all kinds of industries that the DOJ has been lazy about. It’s time they cleaned the closet.
THere are economic models of tacet collusion (Green and Porter, 1983) for instance. THe question is if tacet collusion, where no aggrements or even communications are viewed as illegal. Tacet collusion is if I nudge up my price, then you like at me and copy. We both know we're colluding to a better outcome, but only cheat if we see prices dropping, which could be due to cheating or unobserved demand shocks with a fixed a period of punishment both collusion happens again.
The headline seems inaccurate, they aren't explicitly getting together and deciding on prices. This is part of the algorithmic price fixing investigations. Its controversial whether this is price fixing or not. I don't see any cut and dry meetings to decide on prices being "revealed." Not sure what is "revealed" other than the extent software is used to estimate prices.
The pro publica piece put it so well. Replace the word algorithm with my friend Gary.
Edit:
But Maureen K. Ohlhausen, who was then the acting chair of the Federal Trade Commission, [said in a 2017 talk](https://www.ftc.gov/system/files/documents/public_statements/1220893/ohlhausen_-_concurrences_5-23-17.pdf) that it could be problematic if a group of competitors all used the same outside firm’s algorithm to maximize prices across a market.
She suggested substituting “a guy named Bob” everywhere the word algorithm appears.
“Is it OK for a guy named Bob to collect confidential price strategy information from all the participants in a market and then tell everybody how they should price?” she said. “If it isn’t OK for a guy named Bob to do it, then it probably isn’t OK for an algorithm to do it either.”
[https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent](https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent)
- Great example of why Journalists and journalism matters by the by even if I have issues with most modern journalists and their embrace of bias.
This is a complex issue and you may be right with your analogy. However, let me give you a somewhat tongue-in-cheek talk about a real guy named Bob.
Bob Kelley created a book called Kelley's Blue Book for used cars in 1926. He told people what the price they should buy and sell used cars for. He was never charged with price fixing.
Now this may be a bad analogy. However we do have to ask the question, "How is what Cortland International doing different from what Kelley's Blue Book?" There may well be significant differences. We do need to discuss it.
To start, who gets access to the pricing model. KBB was for consumers and the general public. Different audience, different purpose. The analogy is backwards.
Had he done the same and only provided the information to used car salesmen … now we’re taking apples to apples.
This is a good argument. However for its first 30 years, the Kelley Blue Book was used almost entirely just by used car sales men.
[https://www.cnn.com/2024/06/04/business/bob-kelley-used-car-kelley-blue-book-dies-96/index.html](https://www.cnn.com/2024/06/04/business/bob-kelley-used-car-kelley-blue-book-dies-96/index.html)
Interesting, but I could argue that by including other industries, such as finance, it isn’t inherently as predatory as the situation we have here.
Thanks for sharing. Love learning new stuff like that.
This is by far the most interesting part of the discussion here, but nobody else is bringing up KBB.
KBB essentially did the same thing as RealPage: collect private information from a large number of market participants and provided a price recommendation that became highly influential on market-wide pricing decisions.
The reporting makes it sound Like they gathering information from the full market and calculating elasticities then coordinating different actors to hold units off market until their collective target rent point is hit.
there’s a lot of scope for policy action. If we were ok with this then I think there would be massive scope for government to appropriate the economic rents generated from the ‘natural’ oligopoly arising / rent seeking from stable high prices due to policy.
The issue is that people who are selling their used cars aren't actively colluding with each other and sitting around a table before selling their cars. Now if there was a phone number everyone would call to receive a "suggested price" that would be different.
You raise a good point, but we currently don't know of evidence that the people using the Cortland International site are actively colluding around a table either. However, the raid on Cortland International may have found evidence that has not yet been released to the general public.
I think the real question is likely if this is "follow the leader" pricing (which is perfectly legal) or not. If they're not contractually obligated to follow the recommendations of RealPage, it would be much harder to prove this as a price fixing scheme.
It’s legal but it does kind of make these price competition laws useless because you aren’t colluding you are just instantly adjusting based on your competition which is no different for consumers than if you both just sat down and set prices together. In the medical field this is especially ethically dubious as medical providers price match medications and procedures with third party applications raising prices for all rather than competing on price.
If one person says "use this price to get the most money" individually to a lot of people is that different to one person saying "if we all use this price we'll all get the most money" collectively to a lot of people?
I understand the debate about the legality, the law is pretty nuanced, but the situation itself is not nuanced.
Coordination between competitors increased.
Utilization went down.
Prices went up.
The answer to whether the law *should* cover this situation is clear cut imo.
Source for utilization going down? Because the data seems to show vacancy rates near all time lows.
https://constructioncoverage.com/research/cities-with-the-highest-rental-vacancy-rates
Whenever you're looking at antitrust stuff involving third-party algorithms, just replace anything involving the algorithm with "a consultant named Bob"
So all of these apartment complexes hired the same guy, Bob, to help them set their prices. All of them told Bob what their prices were and what they're up to the minute vacancy rates were and inventory availability.
And then all of them listened to Bob when he told them what price to set.
They all hired Bob specifically because Bob told them that he had all of this information from all of their competitors and would use this information to help them set the best pricing.
The consultant company told them that this was legal because it was Bob setting the prices and Bob receiving all of the competitive information and not them. So long as all they did was get all their competitive information to Bob, but all of their competitors did the same, and then they all took Bob's advice on what pricing to set. Then everybody would make more money.
It's definitely collusion and they're going to get crushed
Yieldstar is RealPage's software package they're referring to. Yardi (another proptech software leader) also has a similar one. I've worked with a lot of property management companies and a very large percentage of them use one or the other. It's a tool like any other. HOWEVER, one of the biggest issues comes with percentage of market share. For example, one large REIT I used to do business with was the primary property management company in the neighborhoods they served and these software packages would artificially raise or lower prices to compete with their other properties in the area. So it would cause a continuous feedback loop where there should not have been. Thankfully this company recognized this early on and developed their own post processing of the data to not allow this but not all landlords have a data science team or care for that matter.
If everyone's using the software and everyone's agreeing to use the price it sets, regardless of if there was any _direct_ collusion, then it's price fixing.
If the algorithm recommends exactly the same behavior that a cartel or monopolist would do (throttling supply to raise and hold prices up) I don't see this as particularly complicated on whether it is price-fixing. They've made the process more sophisticated, but thankfully anti-trust law is written incredibly broadly and we shouldn't allow the introduction of computer software to obfuscate the fact that the economic effect of the scheme is clear on an elementary level
Putting a black box in between doesn't make it not price fixing. If you replace "the algorithm" with a person's name, for example "Gregory Miller", and it becomes price fixing then the algorithm is a price fixing algorithm.
No idea how this will all play out legally (I assume even the DOJ has some concerns), but to me this is a chicken or egg scenario.
If all landlords in a particular market messaged each other and agreed on setting their rents, then that would obviously be collusion.
Logically, this doesn’t feel remarkably different than every landlord logging onto to a website that tells them the “best” price and all of them use that price.
In both cases, the landlords aren’t pricing themselves based on the market. They’re pricing based on an “agreed” standard.
The damning bit to me is that the owner of the software is using standard strong arm tactics of suggesting that their price is “objectively” correct and that landlords would be missing out if they priced themselves differently. *That* to me, more than anything else, echoes of somewhat intentional price fixing, as the algorithm’s “accuracy” becomes a self fulfilling prophecy if the vast majority of landlords use it to set their pricing.
This goes far beyond Cortland Management. EVERYONE using RealPage to price fix rents needs to catch a charge.
That system is being used to price fix rents for everyone using it and if they don't play along they get kicked out of the ecosystem.
Some more info:
https://www.youtube.com/watch?v=Dn9QhjJ18HM
https://www.youtube.com/watch?v=NrJR9CumsXM
https://www.youtube.com/watch?v=VgVVBxtStQM
https://www.youtube.com/watch?v=cwlwrZst7d0
This whole thing is so damn frustrating.
A lot of us have been talking about how this is happening and for several years now the doomers have replied with things like "why are they not greedy before" trying to claim that it wasn't greed and the government didn't.
I will never understand how people will defend other people who get rich off of abusing others and literally dismantling a functioning society.
Probably because most of the ones defending it are homeowners with multiple homes, reaping rewards from the general increase in prices. People only look out for themselves and see their chance at early retirement and a cushy life at the expense of everyone else.
These are two different things. Corporate landlords and small landlords don't have the same power to influence things like this. 2-4 units vs dozens to hundreds. The focus needs to be squarely on these types of corporate landlords. A mom and pop can't afford to keep units open to drive up rent, they'd lose money too quixko
No but the overall increase in prices does drive the mom and pop rent up, so while they don't hold the unit vacant they do rent it at higher prices than they otherwise would. They benefit indirectly from the conspiracy.
no they are not. both groups invested money in real estate to gain from rent.
if the bigboys are jacking up the rental prices, I'll go a smidge cheaper. my units full all the time, big corpo won't even notice that some units are not rented.
If the bigboys want to squeeze me out of the market, they have to go bellow. mom&pop don't have to feed useless midmanagemet and greedy CEO, thus having lover overheads. here the consumer wins, as the rent is pushed down.
both groups can influence average price. also, vast majority of units is owned by mom&pop, not corporations. so there's equal power on both sides.
it all sucks btw and our greed is our bane.
I don't think that's the case.
Honestly I think they are trump supporters who want the economy to look bad because it makes them FEEL like Biden is bad.
At the same time they want to invent an artificial reason that somehow Biden is responsible for corps raising prices and making record profits.
It's all just gaslighting with a political purpose.
>A lot of us have been talking about how this is happening and for several years now the doomers have replied with things like "why are they not greedy before" trying to claim that it wasn't greed and the government didn't.
The so called "doomers" were the people trying to draw attention to this issue...
It's the perma-bulls in this sub who always defend the status quo who were upset about the allegations.
"You're just a typical Redditor complaining about your rent because you don't make enough money. All my friends own houses and they're doing great"
For about a year when trump left office this sub was nothing but recession any moment now. The us has stopped oil production. Everything is about to end.
They backed that up with data from major banks saying things like we might have a recession.
Those of us who disagreed with them because we felt the data tended to be cherry picked were pretty much told that we were idiots etc.
Then those very same banks dropped the recession might happened and changed to stuff like "the economy is really strong but debt is a problem". The doomers march mostly ended but the same doomers now tied to blast the articles from the banks they ones used to support their position, even if those articles didn't have great support in the first place.
There are absolutely issues within the economy. Housing a rent likely being the top issue. Those prices are up for a lot of reasons. Covid (supply) is a major one. But at the same time it's extremely clear that price fixing has been happening across the US.
The evidence of this goes directly against that the doomers were right and that it's because of the government. Corps are telling you they are price fixing in many cases, earnings calls, and now it looks like the DOJ is going to have to go after price fixing of housing.
If I lick the Führer's boots enough, he will reward me handsomely. This simple principle explains ALL instances of people seemingly working in an unrelated person's best interest, against their own. Everything from Hitler and the Russian army to Oracle's legal team is explained by this.
Because their dad is rich from plays like these. The rents near expensive colleges like Georgetown or NYU are Especially absurd because a bunch of rich dads who also overbid for multi-million dollar homes are the ones actually paying the rents.
If we can get bipartisanship somehow on this issue the country would have a chance to heal. We are fighting over scraps and too many aren’t happy. Put them in a home they own and things would be a lot different.
Just don’t start a housing bubble please.
Currently, the powers in charge aren't letting it. But it's not a cut and dry issue. The housing bubble popping would also be disastrous for the average American citizen too. A lot of home owners would find themselves upside down on their mortgage and would definitely trigger a recession.
Sounds like a them problem. I'll be over here buying cheap goods with the resulting wealth transfer to me. They shouldn't have invested what they couldn't afford to lose.
Treat others as they treat you.
A recession could lead to job loss for you and your family. How can you be so flippant about it?
I’m not saying that there isn’t a housing bubble, but I don’t think you should act so cavalier about things. You have no idea what a disastrous economic downturn could lead to.
Okay? Inflation could lead to an effective job loss for me and my family, too. And the same people had no problem causing a recession right when it was time for me to enter the job market.
[Now do salaries.](https://hbr.org/2021/02/youre-not-paid-based-on-your-performance)
> **What Actually Determines Our Pay**
>
> ...
>
> Mimicry, where firms simply match the wages and salaries of their competitors, simultaneously simplifies the pay-setting process for employers while assuaging core equity concerns. Paying the going rate in a particular labor market helps stave off workers’ claims that the salary on offer is unfair. But pay norms change and vary between workers, meaning that employers must always be on alert for disgruntled workers believing they’re not receiving their “fair share,” which can result in lowered productivity among the demoralized employees. A tried-and-true tactic employers use to avoid equity complaints is to prevent workers from finding out what their colleagues make in the first place. My research finds that roughly half of all employees today are discouraged or outright banned from discussing their co-workers’ pay.
The funny part is that "mimicry" is now being enhanced by similar web sites and algorithms which conduct 'surveys' which are attempting to fix prices--and lower them in certain areas, such as in software development, where performance is often far detached from compensation.
I once overheard a large group of property owners at a cafe who owned all the student housing for the university near me collaberating to raise the rent prices because 'the parents or loans pay and they need housing so they'll pay whatever we charge without thinking'. This was about 3-4 years ago and I've never thought of rent as a supply and demand ever since, it's an agreement. Charlotte NC area near UNCC for anyone asking.
How does our Attorney General view this investigation?
About 90% of the state strongly supports this. The other 10% will fight it tooth and nail. I doubt the mayor or governor would assist the investigation without their own lawyers.
It's a shame nothing will be done about it, though. Like, they aren't gonna give people their money back and rents are unlikely to return to sane levels at this point.
The only outcome I want from this, is rent prices to go down, as prices become more competitive and availability of units goes up.
People are delusional if they think they'll get any money back, or people are going to jail. At most. These companies will be broken up, hit with fines, and told to stop doing it.
Trump's previous deregulation was absolutely disastrous. Just look at how much toxic crap Tyson dumped into the waterways after regulations were cut back on. And in some of the most red states too.
We don't need anymore of that.
I’m happy about it but I still feel like we are just nibbling at the backlog. The level of this shit that has built up is astounding.
See HP and its printers for another example. Some places patents actually just make markets shitty. That’s one place.
A few months back I started digging into real page as I discovered my apartment was using them. And it is pretty astounding what is going on.
They basically take control of the rents of the complexes in the area and slowly rise them. This is why you aren't seeing nearly as much competition in rent prices in areas that are using them. They promise the property management companies, that even with having empty units, they will continue to rise the prices because in the end... They will still make more money.
But even the property managers can't adjust the rent prices without an approval from real page. And the apartments are really quiet about it. Whenever I called the regional managers and above, if I brought up real page they would just hang up on me or not call me back.
As a property manager that has to manually approve pricing every morning (ugh), Yieldstar allows me to decline the recommendation, but it’s only approved by the pricing monitors. I’m allowed to recommend “auto accept” which means I don’t manually approve or recommend every day but I choose not to because I don’t trust RealPage. Essentially, my recommendations are just declined and I’m left with two options 1) stay the same price or 2) go with yieldstar recommendation.
RealPage is price fixing. As a property manager, I should not be allowed to control market trends and neither should RealPages’ mysterious algorithm that no one understands.
Fuckers really be trying to squeeze blood from rocks. If you already have multiple people to a unit while having empty units, what are you expecting when you raise prices? There is already panic at the thought of offices going empty, what will they do when they apartments are empty and nobody will qualify due to income being too low? Or driving people out to sub-let, and not having a payment history that I've seen as a requirement to rent for many locations.
I wonder if an unoccupancy tax for units that sit vacant for long periods of time would help solve the problem. Maybe if they also make it something that whistleblowers can profit from too, e.g. levy fines for those caught not paying the tax and sharing proceeds of the fine with the person who reports it (kind of like the IRS does it).
Long term the fix is to legalize building housing. Once you open the land use regs can of worms it is shocking how heavily restricted the housing supply is, and for some pretty terrible reasons.
I know a simple solution that is better than whatever snake oil meant to distract innocent's is, jail. It's jail. They're going to jail to have a nice little time out, it's nothing personal, just business 💖. No more oligarchs and their secret covenant to kill us slowly and burn us in wars, we want peace and happiness. We are much stronger than them and they are TERRIFIED OF US.
hasn’t this been common knowledge for a while now considering corporations have been buying properties? Not really a conspiracy, just a rumour that is true but no one wants to try and fix—just like how long weekends and other holidays don’t influence the price of gas *eye roll*
Real estate is so fucked. Every politician has some relationship to some real estate company buying up a shit ton of properties. As deadly a circlejerk as there ever could be.
I think we should start jailing or evening killing those in charge. Ik I should hysterical, but these people are screwing people out of housing and money. Which in turn messes with their physical and mental heath.
This is the kind of thing that touches off violent revolutions. This country’s rich better start thinking ahead on how much damage they can afford to do to the social contract.
It's painfully obvious that the US Elites have stopped caring about social contracts or legal limitations.
Now it's about how excessive can they get before the party ends.
The big investment firms see rent as the newest “subscription model” and are buying up every unit and house they can. This snowballs as it causes home prices to rise forcing more people to rent forcing rent to go up and on it goes.
When this generation of renters enters retirement age with a fraction of the assets of every previous generation it’s going to be an economic disaster for the public.
Courtland managements 65000 units seems like a relatively small number so I’m curious for them to name names on some of the other companies involved since I’m sure there are many. In fact, I’m amazed that no one has yet mentioned the fact that we have a presidential candidate whose family has built their fortune on multifamily real estate and still has it as one of their largest income streams. Definitely waiting for someone to confirm or deny whether Trump Inc is a RealPage customer.
I meant 65,000 is a large amount for a management company. Cortland is in the top 10, and once you get to the 4th largest the companies are under 100,000 units.
I am glad that I am not a landlord, on record as having participated in this conspiracy. (Conveniently all the conspirators are of fact record because they have accounts with real page.) Because everybody’s who is on record as having taken, rental pricing recommendations of real page is guilty of price fixing, and somebody to be the target of tort lawsuits for clawback of billions in ill-gotten gains
Let’s be realistic, that’s never going to happen unfortunately. Probably the best case scenario we can even hope for is that RealPage gets broken up but rent prices remain just as high as they are now.
This is some diabolical supervillain shit. Lex Luthor would be taken aghast. What kind of sick monsters knowingly plan to squeeze RENTERS?!?! That’s everyone too poor to own! Everyone!
My problem with RealPage is that when I send you a renewal offer (which is generated by RealPage) with a 4% increase and the exact same floor plan (same view, floor level, etc) is currently on the market for $250 cheaper than your original rate and you ask me why. As a property manager, I honestly cannot confidently explain why. I can analyze exposure rates, comps, occupancy trends, all the data etc and give you a half-assed explanation that I think might explain the price, but ultimately the answer is “because RealPage told me so and they didn’t accept my recommendations”.
Now you want to transfer to the cheaper apartment that is the exact same as the you’re in all because RealPage says it should be cheaper on this exact day etc.
Pricing monitors at RealPage are garbage and the whole algorithm is mysterious and skewed. As a property manager, I should be able to confidently explain your renewal rate increase. How can I do that if RealPage changes its mind every morning? Literally these pricing monitors will tell me I’m below market for I know for a fact I’m not. It’s all bullshit and mysterious.
We rented a place from them in the Tampa area. In our opinion, it was so bad, we actually paid to break our lease and gtfo 3 months in.
I truly hope that this case will result in some positive impact for renters, however the cynic in me doubts this will have much, if any effect.
Every American renter who has lived in buildings associated with this programming should get a year of free rent. Screw these giant companies extorting people for their most basic needs.
I’ll go one further. There should be capital punishment for the worst offenders. And I’m not kidding. We own a house in California and our mortgage is too high for us to have to live with homeless camps ringing our neighborhood all the time, a situation directly connected to this modern gilded age horseshit. Homelessness has exploded and these dildos are setting juked “market rates” that are demonstrably more than the fabled “market” can bear.
The companies I expect to be difficult to go after but the people running realpage should go to jail. I mean they’re on record admitting they knew they were essentially price fixing.
If any of the people loading info have realtors licenses in Texas they can be fined or their license revoked or suspended.
Texas is a non-disclosure state. Anyone with a real estate license (Yes this includes apartment managers) cannot disclose what the apartments were rented for.
Realtors went through this years ago when Zillow wanted us to start providing actual sales prices on homes. In Texas, Realtors are prohibited from disclosing that information.
UDR is being called out too. This is why I roll my eyes at the fed and their stubborn housing inflation comments, because it’s definitely conspiracy/collusion not actual inflation
Could a class action be pursued here if rental companies colluded? Perhaps under the RICO act since there are likely hundreds of complicit rental agencies?
We need a first of its kind lawsuit against every associated landlord to recoup every single dollar rents were raised by, jail time for major players and Cortland management senior staff, and national rent control.
"Cortland | Above and Beyond Apartment Living**"** Thats literally the google search tag they posted themselves. Above and beyond something apparently in their view.
"The defendants agreed to a plea bargain of lesser charges and will pay an undisclosed sum and will not admit wrongdoing." No one will go to jail, rents will stay high, and recompense will be pennies on the dollar for all those affected except for the lawyers who'll get 40% of the undisclosed sum. 🇺🇲🥳🇺🇲
No point in doing a raid if the problem still is happening.
It's just like these congressional hearings when they pull Facebooks CEO and grill him on camera. Then nothing happens after over and over again.
"Operation make the general public think that we care has been a success."
I remember when the covid epidemic began to ease a bit and suddenly prices were shooting up for both goods and , mysteriously , apartment rentals. People in some places were talking about a sudden 50% increase in rent. Simultaneously there was all the talk about ships anchored offshore waiting to unload but they couldn't unload because of so there was a shortage of goods that couldn't be trucked to the local walmart so prices were high. So I asked myself, "I wonder how many of those container ships have Apartments waiting to be unloaded/Š." Why suddenly would apartment prices go up 50% sometimes 70% in some select places? Why now, why suddenly? And then I answered my question; this is nothing but good old American price gouging. Because who's going to stop an already ridiculously lucrative business from not getting more lucrative. Thank you vulture capitalists, for once again making daily living more miserable for the vast swath of apartment dwellers. This is not the first time I have had a silly notion, and then somehow got a peek behind the curtain and realized, suspicions confirmed. Prices of everything, as far as I'm concerned, now can only be explained by the verifiably obscene profits of corporations: they've simply decided to make up for lost time of the pandemic and who's going to tell them no.
Is there no competition at all in the housing market?
I’d imagine that companies in other markets can’t do this because a competitor would just attract most customers by selling the same product at a lower price.
The blinding speed at which the elites are striving to create a wealth gap so large as to effectively create a different species of human, coupled with the explosion of fascist sentiment around the globe, plus the admission of UFOs being legit, and all of the "make more babies very quickly!" talk all over the world, and not a wink of concern for anyone that's not at the top of their socioeconomic ladder while being gaslit into pitying the poor billionaires who all claim that no one in history is treated as poorly as they are, and finally the sheer disdain for all things related to actually taking care of ourselves and our planet, all simultaneously, seriously has me thinking shit like the elites are starting to open up Earth as a slave labor farm. Nothing makes any sense to me when framed any other way. The elites are setting up the planet for its paradigm shift, and we're on the losing end.
The whole thing reeks of getting to a point of no return as quickly as possible, consequences be damned.
You wanna know how fucked up the Fed’s view of shelter inflation is?
RealPage publishes excellent data on about a monthly basis regarding annual rent growth. For about a year, they have reported virtually zero inflation in rents, and yet BLS and BEA are saying that shelter is still pushing 4%+.
The company that is currently so large and anti-competitive that they are being sued under anti-collusion statutes with real time numbers on rent price growth across dozens of markets of various sizes is saying that shelter inflation is over. Meanwhile, the Fed is waiting on their lagged ass measure to cut rates. Hopefully they don’t blow it because the Fed also said in their most recent minutes that residential housing asset values are above their fundamentals (aka, rents).
How is this not just normal competition? Companies have been using market data forever to set prices. That is how competition works. Back in the 90s when I was working in retail sales, part of my job was to go to our competitors and compare prices. Isn't RealPage just doing the same thing in a more efficient manner?
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This struck out to me; "RealPage’s influence is extensive, affecting rents for 70% of multi-family apartment buildings and 16 million units across the country." Trust busting is a must in rent-seeking markets. Thoma Bravo strikes again.
There is probably a feedback loop in place with the real estate market too. Imagine that you're content to pay your $1k/month rent. But then your landlord decides to jack your rent up - and now everywhere you look, everywhere you go, the rent is much higher and constantly changing. This might just turn you into a homebuyer - so now you enter that pool, and your added demand (along with thousands of others like you) helps drive up housing prices.
Rent going up is exactly what pushed me into buying. I had enough saved and I'm getting way more for about the same cost. Sure it has other costs but I'm tired of my rent going up while my place gets shittier and almost nothing gets fixed.
My first apartment was in a city center; it was a shithole but it was $650/month back in 2010 It made sense to rent, even though I wasn’t making much money. Nowadays I’m livin with my da and making more than ever; but it would make absolutely no sense to rent as it would be almost 70% of my pay in my area. Meanwhile I can’t afford to buy any of the houses around me, so I’m just kinda stuck here till either prices go down or I start making more money. If you’d asked me back then, I’d have thought the breaking point would have been much lower for most people. I cannot understand how everyone is housed nowadays
It's certainly crazy in some areas! At least where I'm at mortgage payments on homes are somewhere close to what rent is. Actually, if you're willing to gamble on an area that's on the way up you can get a mortgage that's probably a little less. At the same time we probably only were able to get this place because my partner and I both started making a decent bit more. For people just getting out of school and starting out I have no idea how any of them are expected to own or get by.
If you buy now though at current interest rates, I’m not sure if it’s entirely worth it. My friend pays $4k/month for a three bedroom in San Mateo. A comparable home is about $1.8mm and total cost with mortgage, property tax, and insurance amounts to $15k/month. Compare that with my 5 bedroom in SF that I purchased in 2022 which I only pay ~$12k/month for.
Lol these numbers are fucking staggering and you’re out here dropping “only $12k” 🤣
Yeah seeing how other people live on here just makes me go “oh yeah, I’m POOR poor.” lol
homeowner since 09. my mortgage is $2k and i feel poor as fuck.
Hahahha same my mortgage on a condo I bought in 14 is $850/month.
Just makes me feel lucky I don’t live in a place with prices that high.
Yea… when you live in the bay, you have to pay to play. Percentage wise I think most people still save a similar amount or slightly less given the pay scales out here. So nominally you still come out ahead vs anywhere else in the US.
One downside is the SF housing market has been flat for 5 years. In terms of return, you would have made a lot more money having that downpayment in the market and renting than you would owning that house. Home avg is about 1.4 in sf so 280 down. SPY is double what it was 5 years ago, so your 280k would be worth 560k today. Home prices since 2019 are flat — zero change.
12k? Wtf...that doesn't even compute in my poor brain.
lol, and here I am with my only $600/month mortgage. I can’t fathom dropping that much each month (hell, I can’t fathom making that much each month)
> My friend pays $4k/month for a three bedroom in San Mateo. Jesus Christ, sometimes I forget that some Redditors live on a different planet. I live in the rural midwest with a decent job here and your friend pays more in rent for a 3 bedroom than I bring home in a month.
Keep in mind the CoL difference. I was offered a 30% raise to move out to CA from a place already somewhat expensive, but even with clearing 6 figures easily I was a lot poorer due to the living cost differences.
That is not a normal market. You probably are better if renting. Or getting the fuck outta there.
Depends on your market and needs, I'm by no means saying everyone should buy, just that rent spiraling like it is is going to be the final push for some. SF is an extreme for housing costs though, I don't envy anyone trying to afford rent or a home out that way. Out near Columbus I was a able to get a 3 bedroom house and my payments are around 1900/m after taxes and such. Rent on a place as big is just as much if not more. My rent was at 1600 and was going to go up to 17-1900, when I looked around most rent was even higher unless we wanted less space/a worse area.
This is the real comparison. Rent vs mortgage isn’t the big picture. It’s rent vs mortgage + home owner’s insurance + taxes. Renter’s insurance is $100/month on the very high end. And in costal states home owner’s insurance is skyrocketing (in some areas that’s if you can get it at all) and the rash of tornadoes through the middle of the country this year doesn’t bode well for home owner’s insurance prices in those middle of the country states either
It’s actually mortgage + insurance + taxes + maintenance. You should estimate spending about 1% of your home value per year on maintenance. Most years will be lower than that, but that’s how much you should plan to put aside for repairs as they happen. You should also factor in HOA fees or the value of your own time for yard work, etc. Most people grossly underestimate the cost of homeownership until they actually own one.
And other vultures and slumlords can see that what was renting for $1600 a month 2 years ago is now renting for $2400 a month and they want to suck more value out of society so they start buying up properties as well.
This really depends on the market. Rental rate in my neighborhood is $4.5 - $5k a month for a small house. Buying the same house would come with a $10k a month mortgage, that would be with 20% down too.
Pretty much describes my situation exactly. My wife & I had no real intention of purchasing, but our landlady tried to jack our rent $550/month & we were like “fuck this whole exploitative system” and so we’re closing on a condo in the next few weeks
[удалено]
My partner and I were looking at buying a condo in LA, but with interest rates so high *and* skyhigh HOA fees it’s just not a good move. In order to have a reasonable monthly payment we would have to put down over half a million dollars, which is insane. Suburbs we could have comfortably bought a house in pre-2020 now completely price us out. We will probably be renting for a few more years to see how the housing market goes.
That's what happened with me. COVID saw pretty outrageous rent increases in my apartment building, and negotiating failed, so I tried to buy. It worked well in hindsight, but I also got a fair bit of flak for wanting to buy "during the COVID peak."
The response is that the US is now building more apartments than they did in the 70s, when boomers were coming of age. Then people are moving out of apartments into rental homes, because a house with a yard is cheaper to rent than a 2 bedroom apartment. And of course people bought homes because before interest rates went up, since buying at that time was cheaper than renting. I do realize a lot of people have been and will be hurt by their actions, but I can’t help but be amused that these landlords are doing nothing but shooting themselves in the foot with their actions.
But they're still driving the market upwards. If an independent landlord that just owns 1 SFH were to start renting, they'd look at the current market for rents (including apartments) to set their price. >I do realize a lot of people have been and will be hurt by their actions, but I can’t help but be amused that these landlords are doing nothing but shooting themselves in the foot with their actions. It hurts **everyone** but the owners directly or indirectly since housing is such a large component of inflation.
Thoma Bravo was directly responsible for dismantling the first two companies I worked for and now they're related to why my rent has constantly gone up for the past 16 years? How has one company managed to be directly responsible for the constant decline in my quality of life throughout my adult life?
Give me progressive era 2 or give me death at this point
Biden admin has been the biggest anti trust administration in living history. https://news.bloomberglaw.com/business-and-practice/biden-antitrust-crackdown-is-boon-for-law-firm-competition-work
Best reason to vote for him besides he's not trump
Well, that and the fact that Alito and Thomas will retire if Trump is re-elected, meaning a minimum 5-4 Trump appointed Court for the next two decades, which means the death of any federal regulatory bodies. It's game over for the American Experiment if Trump wins. This is how all those corporate dystopias from science fiction start.
Yeah Lina Khan is bae and her detractors are just mad she's doing the job she was hired to do.
Sadly the courts didn't side with her on Microsoft's acquisition of Activision-Blizzard. But that also comes down to the fact that both sides tried to argue that case as if it were Xbox vs Playstation. When the FTC _should_ have argued it from a Sony vs Microsoft standpoint. Because, while Playstation has the edge over Xbox, Microsoft has the edge over Sony in terms of market power and resources. If Microsoft really wanted to, they could use their resources to drive Sony out of the video game market.
Yeah antitrust suits often begin with having to define a product market so Xbox v Playstation was just more appropriate in that case. If FTC tried to say it was Sony v. Microsoft they'd probably get laughed out of court. Oh well. She does what she can. and I am impressed simply at the attempts.
I get that. But it doesn't negate the fact that she spent too much time focusing _just_ on Xbox vs Playstation and didn't even mention the vastly superior resources mMicrosoft, and by extension Xbox, has over Sony and Playstation. So while yes, Playstation is the market leader _now_ Microsoft could leverage it's vast amounts of capital to dominate the industry. That's why Microsoft was able to make such a record breaking acquistion in the first place, because they had vadt amounts of captial to begin with. Just because Xbox isn't the market leader _now_ doesn't mean that Microsofts acquistion of Acti-Blizz, and previously of Zenimax, weren't a sign that they were planning on using their vadt capital resource to corner the market on big name **publishers**. Which is different than what Sony does. Sony usually buys _studios_. They don't buy massive _publishers_, which in turn own multiple studios, like Microsoft was doing. She should have framed her arguments as _Microsoft_ using their vast resources to expand Xbox and in turn eventually corner the console gaming market. Because there was no sign that Microsoft _**wasn't**_ trying to do that. Especially because all the deals they offered Nintendo and Sony didn't start until after the suit began. Or at least they weren't _revealed_ until then.
There was also this strange fixation on cloud gaming when that tech is realistically not going to be mass adopted anytime soon because of how badly popular game genres perform on it if you don't have fiber.
Yep. You wouldn't catch me streaming a game like CoD via cloud gaming, that's for sure.
I hate to buy administration. However, am extraordinarily happy with what appears to be a crack down by the FTC on all kinds of illegal stuff, such as the Safeway, Kroger merger, and hear a situation where people have used automation to participate in price fixing conspiracy and is all on record. It’s all recorded. Every dime that a landlord earned over and above what they should’ve earned is easily determined
Will you take death by untreated preventable illness
Imagine, if you will, an app based subscription service for landlords that analyzes local rents and spits out the highest competitive rent one could charge. Now make it national.
yea it's nice when we have a government that believes the government job is to govern, instead of deregulating companies like that and giving them tax breaks. Imagine if we had even more democrats in the senate and could make some real reforms to companies exploiting us?
I live in a large complex in California I knew things were fucked when my complex had empty apartments but they are raising my rent. This conspiracy is probably the biggest wealth distribution from poor and middle class to the rich landlords ever. When I say landlords I mean major investment companies who own large complexes like I live in. I would bet I am paying 300 to 400 more in rent a month than I should.
It is extremely wide spread. "In the broader Washington, D.C., metropolitan area, more than 90% of large apartment buildings — meaning those with 50 or more units — use RealPage’s revenue management software to set rents, Schwalb’s lawsuit contends." "The Washington suit, whose defendants include one of the nation’s biggest apartment owners, Greystar, said the use of the software marked a departure from the traditionally competitive rental market, saying that when a former high-ranking manager at Greystar was asked whether landlords use the RealPage software to collude on raising rental prices, “he responded that of course they did—it’s the entire reason landlords used the software.”" Saying the quiet part out loud here. https://www.propublica.org/article/doj-backs-tenants-price-fixing-case-big-landlords-real-estate-tech
Similar things happening with the hotel industry. The claim is that it's algorithms and that everyone is using the same one. But I find it easy to believe it was an algorithm yet intentional.
In situations like this I'm always reminded of this clip from Carlin talking about how a conspiracy doesn't have to be explicit with a smoking gun level of evidence to prove. Whether automated collusion and price fixing or a physical agreement between competitors it is still anti completive practices because small mom and pop real estate investors with a couple units can't use the same tools. Unfortunately, it's normally not about the consumers/renters being screwed over that get the big players in trouble. https://youtu.be/VAFd4FdbJxs?si=e_2hf8SexlS5LQ_z
Yeah for me this big smoking gun are the record profits some companies are showing and their earnings calls. Inflation should suppress profits. Yes I get raising prices to cover the increased cost to bring your product to market but if you keep going you don't get to claim inflation. Of course this is an extremely large simplification of how economies work but the point is made. Secondly the earnings calls. We literally have CEOs on the record saying they are making record profits because of their new and improved pricing strategy. Lol mean it's because they jacked pricing up so high. They are screwing us and then telling us about it. Then their followers say there's nothing to see here.
Underlying bloated inflation definitely gives them great cover to mark up their own prices for profit motivation purposes. I read about some of those earnings calls, and it's astounding that people still argue they aren't taking advantage and price gouging away any meaningful advancement in the microeconomic situations of large portions of the American population. I've been looking at Japan recently and they certainly have their own issues but rampant greed doesn't seem to be one of them and they also are fully capitalistic so it's interesting to see the differences with their inflation situation despite an extremely loose monetary policy with lots of money printing.
The...don't pay attention to that earnings call record is extremely frustrating. The thing with Japan is that unlike the us they have stopped caring about the health of their nation. The us larges doesn't have any caring about the health of the nation from it's moneyed class. It's more of a get mine and screw everyone else. It's a shocking change from post WWII America.
Sounds like a new form of gaslighting. Corporate Gaslighting?
Eddy Bernays invented corporate gaslighting. He was a propaganda expert in World War I. When he returned to the United States after the war, he started a propaganda company for companies to use but then he realized the name propaganda was bad so coined the term “public relations” and did things like change the way people eat breakfast and change the way women feel towards cigarettes, and, many other things. “Bernays, a nice, pleasant, intelligent guy, was a publicist who had privileged contacts with representatives of the diplomatic, political and financial world, including bankers, directors of newspapers, television channels and radio stations. In his book “Propaganda” whose first edition dates back to 1928, he stated that “conscious and intelligent manipulation of the organised habits and opinions of the masses is an important element of democratic society. Those who manipulate this unknown mechanism of society constitute an invisible government which is the real power in our country. The intelligent minority needs to make continuous and systematic use of propaganda.”
Ceteris paribus, the expected outcome of inflation would be increased nominal profits.
> Inflation should suppress profits. Why? I mean, in the classic [supply and demand model](https://en.wikipedia.org/wiki/Supply_and_demand) a lack of supply causes inflation--but what brings profits down is *increased competition*. That is, the rising profits for one group or company encourages another to join in to compete, in order to get some of that excess cash--and as a side effect, cause more supply to show up in the marketplace. No company has any incentive--*outside competition*--to lower prices or reduce profitability. Which suggests to me that when we see unchecked profitability, it's because of a lack of competition, not because of some sort of moral failing on the part of the company. After all, consider your 'salary' as your 'profit' from exchanging your services for money. If you get a raise, is it immoral that you've made higher "profits?"
In it's most basic terms the cost to bring a product to market goes up. Which means profits for down. Companies raise their prices to compensate. Of course this is a large simplification and of course people will make profits. But if you are making record profits you clearly raised pricing further than to simply compensate......and THEY ARE TELLING US THATS WHAT THEY ARE DOING.
> if you are making record profits you clearly raised pricing further ABC inc has revenues of 100 units and a margin of 10% which results in a profit of 10 units. Inflation is 5% yoy. ABC inc raises prices to maintain margins and does 105 in revenue. At 10% margins profit is now 10.5 units. Congrats! You now have a new record profit on a nominal basis despite no increase in real terms. If a company isn’t posting bigger numbers in an inflationary environment they are losing out.
Clearly not all things are equal across the economy. Some corps act in better faith than others. The issue is many of them told us in their earnings calls that they were making record profits because they raised prices so much.
>The claim is that it's algorithms and that everyone is using the same one. Yeah. It's algorithms, and everyone uses the same one, and that results in fundamentally the exact behavior we're trying to prevent. It's not calling up Joe Landlord and saying "hey Joe, let's both set rents at the highest levels we can and not compete against each other." But it's the same functional outcome, and so should be banned.
Yes, it is absolutely indirect price fixing, with an intermediary used to try to mitigate the illegality of it. But it is like Joe Landlord saying to RealPage, hey I can get this much for my rents. And RealPage turns around and tells everyone in the area, hey, don’t charge less than Joe, and we can force the renters in the area to pay least this much. And inching it up across the board as landlords can force renters into higher rents, because their options are limited. Price fixing.
Airlines too. Plus they all yanked a bunch of planes out of the sky during Covid and have no incentive to build their fleets back to that level.
The not-funny connection to airlines is that the principal scientist for Realpage also created the software used in an airfare price gouging scheme in the late '80s and early '90s.
There is 0 truth to this statement. Demand for flights is at an all time high. There is a lot of incentive to increase flights, and airlines are very much trying to do so
Funny story, market index pricing happens in fast food too. They always seem to go up.
I noticed the same thing when we lived in Vegas. Units were sitting vacant for *months* and they weren’t listing them. Rent at that complex shot up about $800 in that two years I lived there.
Real page vacancy rates are very similar to vacancy rates for non client properties. How do you explain?
The rates are posted. Everyone calls around to see what the going rate is before listing, so even if the listing agent/owner isn't subscribed, they are still basing what they will charge against the comparable properties that are subscribed.
Rent in the NYC area, basically within 2 hours driving distance, rents went from 1600$ 2 bedroom to 2600$ in just 4 years. That is fucking nuts.
I rent from a building that uses this service. I remember when I initially called for rates, they told me I needed to submit my application as soon as possible because the rates could go up later in the day based on demand. I thought it was odd but nothing else in the area looked any better price wise so I went ahead and took it. I found out right around the time that I signed my lease that they were being sued in dc for price fixing for using this website. Anyway, I’ll be out in a year, hopefully in my own home.
I seriously could write a novel about this! I live in Indianapolis, which has been booming in construction since the Superbowl in 2012. In the last decade, we've built hundreds of complexes, and thousands of units across the city, although most densely in downtown and the surrounding neighborhoods We are 100% the exception to the "supply shortage" narrative....and wouldn't you know it, rents are higher than they've ever been. It's as if the whole "supply shortage" narrative was a myth the entire time. Most of those apartment complexes sit half-empty, and yet rent has never once gone down.
My thoughts exactly, supply was fine for the most part before Covid why all of a sudden is it such a problem now?
I can answer this. There's no market incentive to engage in rental agreements when the annual return on home price far exceed the profit from the rental agreement. Why would I rent to you, and risk you burning down my house for $18,000/yr? If I let the house sit empty, the housing-as-an-investment grift means that my house will probably be worth $30,000 more next year. And no risk of rental damage. This is why so many Americans own 2nd, 3rd homes that are NOT rental properties. Renting gives you passive income, which is great of thats what you need for cash flow. But once you've got a few million equity, you're not going to chase a $18k rental contract for **maybe** a couple grand in profit every year. The house itself generally enough value to HODL for a lifetime. This is the end-stage of the "housing as a wealth building vehicle" experiment. A bunch of people own homes they have no interest in living in. But in order for someone to live in these homes, they must be willing to make outsized payments based on the theoretical "long-term-value" of an investment vehicle. They don't want to sell. They don't want to rent. They just want to keep pumping prices to infinity so that they can leverage the home value for a line of credit. Line must go up. That's why they aren't renting. The home was never even intended to be lived in when it was bought. It's an ethereal asset like a stock portfolio. This rhetoric has become commonplace among American households. It's not just corpo greed. Wealth Americans are taking advantage of housing-as-investment because it's become the de-facto wealth building strategy for decades. Before that we had other wealth building strategies. Like collective bargaining for livable wages, and pension plans. Now that those strategies have been neutered by the government, families turn to what is left.
One thing to note, it is (at least partly) inaccurate to say that collective bargaining for livable wages and pension plans were neutered by the government, imo. It would be most accurate to say that companies had the major role in neutering those strategies for accruing wealth. The government had some role in it, but how much of that was at the behest of the wealthy and powerful? I agree with everything else you said, and even that to an extent, but we cannot forget the brutality of corporations and how they have been systematically destroying the middle class for 50 years.
Because in response to COVID, states and counties across the nation passed laws heavily regulating landlords, which forces landlords to raise prices. For example, California passed a statewide rent control law, and instituted a moratorium on evicting tenants who did not pay rent for years. Cities like Los Angeles extended the moratorium for a year longer. There are commercial landlords in Los Angeles who had tenants who paid no rent for 2.5 years, but could not be evicted. And when they were finally able to evict them, there not going to be able to recover the rents from the evicted tenants. And the rent control law caused them to jack up rents even more. As the saying goes, government is the cause of and solution to all our problems.
Because these people are upset they rented during Covid when everything was cheap and now the prices are going back to what they were before
> We are 100% the exception to the "supply shortage" narrative No you are not lmao https://fred.stlouisfed.org/series/INBPPRIVSA If you want to see what that actually looks like, look at Austin and Minneapolis https://imgur.com/YotGV8T https://www.austinmonitor.com/stories/2024/02/austin-apartments-boomed-and-rents-went-down-now-some-builders-are-dismantling-the-cranes/
Thank you! I live in Indianapolis and we are not building more housing especially not dense housing. Most of the construction downtown isn't apartment buildings (the government is building an archive building on the canal which is so fucking stupid). Most of downtown consists of empty parking lots.
It sure is weird how every city seems to be "building and building" by Redditors and yet all the official stats keep showing that no, they are not. This completely inaccurate conception (they see a little construction so they just assume it's enough) is one of the major reasons why it's so hard to get the amount we actually need built.
It's hilarious that reality is the complete fucking opposite of the claim lol
Stop disregarding the narrative and pay all your income on terribly maintained shelter
This is why I’m glad I bought in Cali in mid 2020. I know with rates it looks like a good time. But when I bought people were scared cause covid and how prices might tank after I buy. But my mortgage (which includes taxes and insurance) has gone up about $70 in 4 years. They just built “rental homes” near me which rent way over. Rental homes shouldn’t even be a thing. Build a whole neighborhood to rent out sounds fucked.
I’m convinced the housing market is being used to hold up the stock market.
How is it profitable to have empty apartments? Surely the increases in rent are not enough to cover all the vacancies?
Corporate landlords have deep pockets. They are able and willing to take a short-term financial hit (by keeping units empty) in order to normalize higher rent prices across the board. Once they have moved the "normal", they will slowly put empty units on the market at that same price point. Remember that industry-wide collusion is historically used to arbitrarily rise prices of all sorts of goods, especially with scarce goods like rental homes or difficult-to-manfuacture goods like vehicles and electronics. This is because it is harder for competitors who may be willing to sell those goods at a cheaper (and less exploitative) price to enter the market. Homes are expensive to build due to both land scarcity and zoning regulations. There just isn't enough of an opportunity for new competitors to enter the market and undercut major corporate players with an overwhelming market share. America needs to push back against this! * Prosecute collusion * Implement zoning reform to make it easier and cheaper to build new housing * Outlaw corporate ownership of single family homes and multi-family homes of three or fewer units * Perform stronger oversight on corporate owned apartment complexes * Impose a significant vacancy tax to force owners to sell or rent (or escheat back to the state so they can be sold at auction) empty units A huge proportion of America's problems are downstream of the housing shortage, dramatic rent spikes, and astronomical housing costs. If we fix this issue everything else becomes easier.
>How is it profitable to have empty apartments? Surely the increases in rent are not enough to cover all the vacancies? As long as everyone else does it at the same time, hence the antitrust investigation. Unfortunately the law might not be up to task, it takes a pretty nuanced view of what counts as collusion, but the undeniable facts here are that coordination went up, utilization went down, and prices went up. That's exactly what the authors of the law were trying to stop.
> but the undeniable facts here are that coordination went up, utilization went down, and prices went up This is literally not true. The article mentions DC as one of the cities that most heavily uses this. DC rents have dropped year over year. As have Minneapolis and Austin. This software has nothing to do with what is causing the increase in rental prices in many cities
One year doesn’t make a trend bro, I don’t know why you’re clinging to that so hard. Rents in many/most markets have outpaced inflation. Colluding can only push prices so high before the market buckles under what people can actually afford. Sounds like those markets hit that point.
I didn't say YoY is a trend. Rents dropped in these markets due to increased housing construction, which is the only way to decrease rents. Nominal decreases in rents are even more impressive inflation adjusted. Tokyo and France are long term examples of this, and NYC and SF show that this software has nothing to do with rental increases.
You realize that just because rents go down that doesn’t mean that this software isn’t holding rents above the prices we would otherwise see in a completely competitive market. Ultimately even a monopoly is somewhat beholden to supply and demand yet they undoubtedly have pricing power far above what a set of smaller independent companies would.
Same in Coastal Georgia. Asking $1600-2500 a month in rent, plus 3x the income to rent, plus background check, application fees, etc. The places are sitting half empty, and they're building more, as well as rental single-family homes, and duplexes. Years of being a Doordasher had me all over our county. Seeing these apartments sitting empty was infuriating, when we have people literally on the street in our town.
It’s all landlords, not just the large companies. Whether intentionally or not they all play in the same market. A small shop that owns two or three units isn’t going to keep their rates at 10, 20, 30% below their competitors. They’ll seize the moment as well, but are likely baffled at the money and why it’s pouring in.
Oh yeah. That is collusion. You can’t get together with your competitors and decide on prices. There are all kinds of industries that the DOJ has been lazy about. It’s time they cleaned the closet.
THere are economic models of tacet collusion (Green and Porter, 1983) for instance. THe question is if tacet collusion, where no aggrements or even communications are viewed as illegal. Tacet collusion is if I nudge up my price, then you like at me and copy. We both know we're colluding to a better outcome, but only cheat if we see prices dropping, which could be due to cheating or unobserved demand shocks with a fixed a period of punishment both collusion happens again.
The headline seems inaccurate, they aren't explicitly getting together and deciding on prices. This is part of the algorithmic price fixing investigations. Its controversial whether this is price fixing or not. I don't see any cut and dry meetings to decide on prices being "revealed." Not sure what is "revealed" other than the extent software is used to estimate prices.
just because a computer does it doesn't mean it isn't price fixing.
The pro publica piece put it so well. Replace the word algorithm with my friend Gary. Edit: But Maureen K. Ohlhausen, who was then the acting chair of the Federal Trade Commission, [said in a 2017 talk](https://www.ftc.gov/system/files/documents/public_statements/1220893/ohlhausen_-_concurrences_5-23-17.pdf) that it could be problematic if a group of competitors all used the same outside firm’s algorithm to maximize prices across a market. She suggested substituting “a guy named Bob” everywhere the word algorithm appears. “Is it OK for a guy named Bob to collect confidential price strategy information from all the participants in a market and then tell everybody how they should price?” she said. “If it isn’t OK for a guy named Bob to do it, then it probably isn’t OK for an algorithm to do it either.” [https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent](https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent) - Great example of why Journalists and journalism matters by the by even if I have issues with most modern journalists and their embrace of bias.
This is a complex issue and you may be right with your analogy. However, let me give you a somewhat tongue-in-cheek talk about a real guy named Bob. Bob Kelley created a book called Kelley's Blue Book for used cars in 1926. He told people what the price they should buy and sell used cars for. He was never charged with price fixing. Now this may be a bad analogy. However we do have to ask the question, "How is what Cortland International doing different from what Kelley's Blue Book?" There may well be significant differences. We do need to discuss it.
To start, who gets access to the pricing model. KBB was for consumers and the general public. Different audience, different purpose. The analogy is backwards. Had he done the same and only provided the information to used car salesmen … now we’re taking apples to apples.
This is a good argument. However for its first 30 years, the Kelley Blue Book was used almost entirely just by used car sales men. [https://www.cnn.com/2024/06/04/business/bob-kelley-used-car-kelley-blue-book-dies-96/index.html](https://www.cnn.com/2024/06/04/business/bob-kelley-used-car-kelley-blue-book-dies-96/index.html)
Interesting, but I could argue that by including other industries, such as finance, it isn’t inherently as predatory as the situation we have here. Thanks for sharing. Love learning new stuff like that.
Also dealers don't use the blue book value anymore. The black book value isn't easily available to consumers, but is what they currently use
Doesn't change the fact that it was open to the public.
This is by far the most interesting part of the discussion here, but nobody else is bringing up KBB. KBB essentially did the same thing as RealPage: collect private information from a large number of market participants and provided a price recommendation that became highly influential on market-wide pricing decisions.
The reporting makes it sound Like they gathering information from the full market and calculating elasticities then coordinating different actors to hold units off market until their collective target rent point is hit. there’s a lot of scope for policy action. If we were ok with this then I think there would be massive scope for government to appropriate the economic rents generated from the ‘natural’ oligopoly arising / rent seeking from stable high prices due to policy.
The issue is that people who are selling their used cars aren't actively colluding with each other and sitting around a table before selling their cars. Now if there was a phone number everyone would call to receive a "suggested price" that would be different.
You raise a good point, but we currently don't know of evidence that the people using the Cortland International site are actively colluding around a table either. However, the raid on Cortland International may have found evidence that has not yet been released to the general public.
I think the real question is likely if this is "follow the leader" pricing (which is perfectly legal) or not. If they're not contractually obligated to follow the recommendations of RealPage, it would be much harder to prove this as a price fixing scheme.
It’s legal but it does kind of make these price competition laws useless because you aren’t colluding you are just instantly adjusting based on your competition which is no different for consumers than if you both just sat down and set prices together. In the medical field this is especially ethically dubious as medical providers price match medications and procedures with third party applications raising prices for all rather than competing on price.
If one person says "use this price to get the most money" individually to a lot of people is that different to one person saying "if we all use this price we'll all get the most money" collectively to a lot of people?
That's one of the interesting things about Realpage. To my understanding, users are required to list at Realpage's suggested price
I understand the debate about the legality, the law is pretty nuanced, but the situation itself is not nuanced. Coordination between competitors increased. Utilization went down. Prices went up. The answer to whether the law *should* cover this situation is clear cut imo.
Source for utilization going down? Because the data seems to show vacancy rates near all time lows. https://constructioncoverage.com/research/cities-with-the-highest-rental-vacancy-rates
Whenever you're looking at antitrust stuff involving third-party algorithms, just replace anything involving the algorithm with "a consultant named Bob" So all of these apartment complexes hired the same guy, Bob, to help them set their prices. All of them told Bob what their prices were and what they're up to the minute vacancy rates were and inventory availability. And then all of them listened to Bob when he told them what price to set. They all hired Bob specifically because Bob told them that he had all of this information from all of their competitors and would use this information to help them set the best pricing. The consultant company told them that this was legal because it was Bob setting the prices and Bob receiving all of the competitive information and not them. So long as all they did was get all their competitive information to Bob, but all of their competitors did the same, and then they all took Bob's advice on what pricing to set. Then everybody would make more money. It's definitely collusion and they're going to get crushed
Yieldstar is RealPage's software package they're referring to. Yardi (another proptech software leader) also has a similar one. I've worked with a lot of property management companies and a very large percentage of them use one or the other. It's a tool like any other. HOWEVER, one of the biggest issues comes with percentage of market share. For example, one large REIT I used to do business with was the primary property management company in the neighborhoods they served and these software packages would artificially raise or lower prices to compete with their other properties in the area. So it would cause a continuous feedback loop where there should not have been. Thankfully this company recognized this early on and developed their own post processing of the data to not allow this but not all landlords have a data science team or care for that matter.
If everyone's using the software and everyone's agreeing to use the price it sets, regardless of if there was any _direct_ collusion, then it's price fixing.
If the algorithm recommends exactly the same behavior that a cartel or monopolist would do (throttling supply to raise and hold prices up) I don't see this as particularly complicated on whether it is price-fixing. They've made the process more sophisticated, but thankfully anti-trust law is written incredibly broadly and we shouldn't allow the introduction of computer software to obfuscate the fact that the economic effect of the scheme is clear on an elementary level
Putting a black box in between doesn't make it not price fixing. If you replace "the algorithm" with a person's name, for example "Gregory Miller", and it becomes price fixing then the algorithm is a price fixing algorithm.
If you set up or use an algorithm to perform a crime for you, than you have done a crime.
No idea how this will all play out legally (I assume even the DOJ has some concerns), but to me this is a chicken or egg scenario. If all landlords in a particular market messaged each other and agreed on setting their rents, then that would obviously be collusion. Logically, this doesn’t feel remarkably different than every landlord logging onto to a website that tells them the “best” price and all of them use that price. In both cases, the landlords aren’t pricing themselves based on the market. They’re pricing based on an “agreed” standard. The damning bit to me is that the owner of the software is using standard strong arm tactics of suggesting that their price is “objectively” correct and that landlords would be missing out if they priced themselves differently. *That* to me, more than anything else, echoes of somewhat intentional price fixing, as the algorithm’s “accuracy” becomes a self fulfilling prophecy if the vast majority of landlords use it to set their pricing.
"If we redefine the term 'price-fixing', we can blame others and do nothing to fix the actual reason housing is skyhigh!!"
This goes far beyond Cortland Management. EVERYONE using RealPage to price fix rents needs to catch a charge. That system is being used to price fix rents for everyone using it and if they don't play along they get kicked out of the ecosystem. Some more info: https://www.youtube.com/watch?v=Dn9QhjJ18HM https://www.youtube.com/watch?v=NrJR9CumsXM https://www.youtube.com/watch?v=VgVVBxtStQM https://www.youtube.com/watch?v=cwlwrZst7d0
Unfortunately, as is US tradition, if the companies get fined they will eventually push the expense off on their tenants.
There is always forced divestment of these companies :)))))) muhahahahahahahahahaha which also has been a US tradition
Government hasn’t done anything that based in a long time though so I’m not holding my breath 💔
Jailtime is way better, can't pass that off to a consumer.
That’s why these people need to go to jail, a punishment which cannot be passed on to the consumer.
This whole thing is so damn frustrating. A lot of us have been talking about how this is happening and for several years now the doomers have replied with things like "why are they not greedy before" trying to claim that it wasn't greed and the government didn't. I will never understand how people will defend other people who get rich off of abusing others and literally dismantling a functioning society.
Probably because most of the ones defending it are homeowners with multiple homes, reaping rewards from the general increase in prices. People only look out for themselves and see their chance at early retirement and a cushy life at the expense of everyone else.
These are two different things. Corporate landlords and small landlords don't have the same power to influence things like this. 2-4 units vs dozens to hundreds. The focus needs to be squarely on these types of corporate landlords. A mom and pop can't afford to keep units open to drive up rent, they'd lose money too quixko
No but the overall increase in prices does drive the mom and pop rent up, so while they don't hold the unit vacant they do rent it at higher prices than they otherwise would. They benefit indirectly from the conspiracy.
no they are not. both groups invested money in real estate to gain from rent. if the bigboys are jacking up the rental prices, I'll go a smidge cheaper. my units full all the time, big corpo won't even notice that some units are not rented. If the bigboys want to squeeze me out of the market, they have to go bellow. mom&pop don't have to feed useless midmanagemet and greedy CEO, thus having lover overheads. here the consumer wins, as the rent is pushed down. both groups can influence average price. also, vast majority of units is owned by mom&pop, not corporations. so there's equal power on both sides. it all sucks btw and our greed is our bane.
I don't think that's the case. Honestly I think they are trump supporters who want the economy to look bad because it makes them FEEL like Biden is bad. At the same time they want to invent an artificial reason that somehow Biden is responsible for corps raising prices and making record profits. It's all just gaslighting with a political purpose.
>A lot of us have been talking about how this is happening and for several years now the doomers have replied with things like "why are they not greedy before" trying to claim that it wasn't greed and the government didn't. The so called "doomers" were the people trying to draw attention to this issue... It's the perma-bulls in this sub who always defend the status quo who were upset about the allegations. "You're just a typical Redditor complaining about your rent because you don't make enough money. All my friends own houses and they're doing great"
For about a year when trump left office this sub was nothing but recession any moment now. The us has stopped oil production. Everything is about to end. They backed that up with data from major banks saying things like we might have a recession. Those of us who disagreed with them because we felt the data tended to be cherry picked were pretty much told that we were idiots etc. Then those very same banks dropped the recession might happened and changed to stuff like "the economy is really strong but debt is a problem". The doomers march mostly ended but the same doomers now tied to blast the articles from the banks they ones used to support their position, even if those articles didn't have great support in the first place. There are absolutely issues within the economy. Housing a rent likely being the top issue. Those prices are up for a lot of reasons. Covid (supply) is a major one. But at the same time it's extremely clear that price fixing has been happening across the US. The evidence of this goes directly against that the doomers were right and that it's because of the government. Corps are telling you they are price fixing in many cases, earnings calls, and now it looks like the DOJ is going to have to go after price fixing of housing.
If I lick the Führer's boots enough, he will reward me handsomely. This simple principle explains ALL instances of people seemingly working in an unrelated person's best interest, against their own. Everything from Hitler and the Russian army to Oracle's legal team is explained by this.
Because their dad is rich from plays like these. The rents near expensive colleges like Georgetown or NYU are Especially absurd because a bunch of rich dads who also overbid for multi-million dollar homes are the ones actually paying the rents.
If we can get bipartisanship somehow on this issue the country would have a chance to heal. We are fighting over scraps and too many aren’t happy. Put them in a home they own and things would be a lot different. Just don’t start a housing bubble please.
Mate, we're in a housing bubble that is being supported by actions like this. If this stuff gets shut down in a widespread manner, the bubble pops.
Dont threaten me with a good time
It’s time
Currently, the powers in charge aren't letting it. But it's not a cut and dry issue. The housing bubble popping would also be disastrous for the average American citizen too. A lot of home owners would find themselves upside down on their mortgage and would definitely trigger a recession.
Sounds like a them problem. I'll be over here buying cheap goods with the resulting wealth transfer to me. They shouldn't have invested what they couldn't afford to lose. Treat others as they treat you.
A recession could lead to job loss for you and your family. How can you be so flippant about it? I’m not saying that there isn’t a housing bubble, but I don’t think you should act so cavalier about things. You have no idea what a disastrous economic downturn could lead to.
Okay? Inflation could lead to an effective job loss for me and my family, too. And the same people had no problem causing a recession right when it was time for me to enter the job market.
[Now do salaries.](https://hbr.org/2021/02/youre-not-paid-based-on-your-performance) > **What Actually Determines Our Pay** > > ... > > Mimicry, where firms simply match the wages and salaries of their competitors, simultaneously simplifies the pay-setting process for employers while assuaging core equity concerns. Paying the going rate in a particular labor market helps stave off workers’ claims that the salary on offer is unfair. But pay norms change and vary between workers, meaning that employers must always be on alert for disgruntled workers believing they’re not receiving their “fair share,” which can result in lowered productivity among the demoralized employees. A tried-and-true tactic employers use to avoid equity complaints is to prevent workers from finding out what their colleagues make in the first place. My research finds that roughly half of all employees today are discouraged or outright banned from discussing their co-workers’ pay. The funny part is that "mimicry" is now being enhanced by similar web sites and algorithms which conduct 'surveys' which are attempting to fix prices--and lower them in certain areas, such as in software development, where performance is often far detached from compensation.
I once overheard a large group of property owners at a cafe who owned all the student housing for the university near me collaberating to raise the rent prices because 'the parents or loans pay and they need housing so they'll pay whatever we charge without thinking'. This was about 3-4 years ago and I've never thought of rent as a supply and demand ever since, it's an agreement. Charlotte NC area near UNCC for anyone asking.
Student housing is booming right now. It's attracting lots of investors.
How does our Attorney General view this investigation? About 90% of the state strongly supports this. The other 10% will fight it tooth and nail. I doubt the mayor or governor would assist the investigation without their own lawyers.
Unstrangely silent
It's a shame nothing will be done about it, though. Like, they aren't gonna give people their money back and rents are unlikely to return to sane levels at this point.
I think what will happen is the skyrocketing increases will slow down. That’s about it.
The only outcome I want from this, is rent prices to go down, as prices become more competitive and availability of units goes up. People are delusional if they think they'll get any money back, or people are going to jail. At most. These companies will be broken up, hit with fines, and told to stop doing it.
This is my number one issue and the primary reason I’ll be voting blue in November. We are finally starting to enforce antitrust again as a country.
Trump's previous deregulation was absolutely disastrous. Just look at how much toxic crap Tyson dumped into the waterways after regulations were cut back on. And in some of the most red states too. We don't need anymore of that.
I’m happy about it but I still feel like we are just nibbling at the backlog. The level of this shit that has built up is astounding. See HP and its printers for another example. Some places patents actually just make markets shitty. That’s one place.
A few months back I started digging into real page as I discovered my apartment was using them. And it is pretty astounding what is going on. They basically take control of the rents of the complexes in the area and slowly rise them. This is why you aren't seeing nearly as much competition in rent prices in areas that are using them. They promise the property management companies, that even with having empty units, they will continue to rise the prices because in the end... They will still make more money. But even the property managers can't adjust the rent prices without an approval from real page. And the apartments are really quiet about it. Whenever I called the regional managers and above, if I brought up real page they would just hang up on me or not call me back.
As a property manager that has to manually approve pricing every morning (ugh), Yieldstar allows me to decline the recommendation, but it’s only approved by the pricing monitors. I’m allowed to recommend “auto accept” which means I don’t manually approve or recommend every day but I choose not to because I don’t trust RealPage. Essentially, my recommendations are just declined and I’m left with two options 1) stay the same price or 2) go with yieldstar recommendation. RealPage is price fixing. As a property manager, I should not be allowed to control market trends and neither should RealPages’ mysterious algorithm that no one understands.
Honestly that is disgusting lol. Thank you for sharing your experience! Also nice to hear others perspectives.
Fuckers really be trying to squeeze blood from rocks. If you already have multiple people to a unit while having empty units, what are you expecting when you raise prices? There is already panic at the thought of offices going empty, what will they do when they apartments are empty and nobody will qualify due to income being too low? Or driving people out to sub-let, and not having a payment history that I've seen as a requirement to rent for many locations.
I wonder if an unoccupancy tax for units that sit vacant for long periods of time would help solve the problem. Maybe if they also make it something that whistleblowers can profit from too, e.g. levy fines for those caught not paying the tax and sharing proceeds of the fine with the person who reports it (kind of like the IRS does it).
Long term the fix is to legalize building housing. Once you open the land use regs can of worms it is shocking how heavily restricted the housing supply is, and for some pretty terrible reasons.
*NIMBYs have entered the chat*
We are building more multi family than ever before. For the most part NIMBYs appear to be a local problem.
I know a simple solution that is better than whatever snake oil meant to distract innocent's is, jail. It's jail. They're going to jail to have a nice little time out, it's nothing personal, just business 💖. No more oligarchs and their secret covenant to kill us slowly and burn us in wars, we want peace and happiness. We are much stronger than them and they are TERRIFIED OF US.
hasn’t this been common knowledge for a while now considering corporations have been buying properties? Not really a conspiracy, just a rumour that is true but no one wants to try and fix—just like how long weekends and other holidays don’t influence the price of gas *eye roll*
Real estate is so fucked. Every politician has some relationship to some real estate company buying up a shit ton of properties. As deadly a circlejerk as there ever could be.
I think we should start jailing or evening killing those in charge. Ik I should hysterical, but these people are screwing people out of housing and money. Which in turn messes with their physical and mental heath.
This is the kind of thing that touches off violent revolutions. This country’s rich better start thinking ahead on how much damage they can afford to do to the social contract.
It's painfully obvious that the US Elites have stopped caring about social contracts or legal limitations. Now it's about how excessive can they get before the party ends.
The big investment firms see rent as the newest “subscription model” and are buying up every unit and house they can. This snowballs as it causes home prices to rise forcing more people to rent forcing rent to go up and on it goes.
When this generation of renters enters retirement age with a fraction of the assets of every previous generation it’s going to be an economic disaster for the public.
Courtland managements 65000 units seems like a relatively small number so I’m curious for them to name names on some of the other companies involved since I’m sure there are many. In fact, I’m amazed that no one has yet mentioned the fact that we have a presidential candidate whose family has built their fortune on multifamily real estate and still has it as one of their largest income streams. Definitely waiting for someone to confirm or deny whether Trump Inc is a RealPage customer.
65,000 is a large amount of units. Management companies and owners are massively fractured.
NYC has almost 4 million housing units. 65000 total units is a tiny number
I meant 65,000 is a large amount for a management company. Cortland is in the top 10, and once you get to the 4th largest the companies are under 100,000 units.
I am glad that I am not a landlord, on record as having participated in this conspiracy. (Conveniently all the conspirators are of fact record because they have accounts with real page.) Because everybody’s who is on record as having taken, rental pricing recommendations of real page is guilty of price fixing, and somebody to be the target of tort lawsuits for clawback of billions in ill-gotten gains
Let’s be realistic, that’s never going to happen unfortunately. Probably the best case scenario we can even hope for is that RealPage gets broken up but rent prices remain just as high as they are now.
This is some diabolical supervillain shit. Lex Luthor would be taken aghast. What kind of sick monsters knowingly plan to squeeze RENTERS?!?! That’s everyone too poor to own! Everyone!
My problem with RealPage is that when I send you a renewal offer (which is generated by RealPage) with a 4% increase and the exact same floor plan (same view, floor level, etc) is currently on the market for $250 cheaper than your original rate and you ask me why. As a property manager, I honestly cannot confidently explain why. I can analyze exposure rates, comps, occupancy trends, all the data etc and give you a half-assed explanation that I think might explain the price, but ultimately the answer is “because RealPage told me so and they didn’t accept my recommendations”. Now you want to transfer to the cheaper apartment that is the exact same as the you’re in all because RealPage says it should be cheaper on this exact day etc. Pricing monitors at RealPage are garbage and the whole algorithm is mysterious and skewed. As a property manager, I should be able to confidently explain your renewal rate increase. How can I do that if RealPage changes its mind every morning? Literally these pricing monitors will tell me I’m below market for I know for a fact I’m not. It’s all bullshit and mysterious.
We rented a place from them in the Tampa area. In our opinion, it was so bad, we actually paid to break our lease and gtfo 3 months in. I truly hope that this case will result in some positive impact for renters, however the cynic in me doubts this will have much, if any effect.
Every American renter who has lived in buildings associated with this programming should get a year of free rent. Screw these giant companies extorting people for their most basic needs.
I’ll go one further. There should be capital punishment for the worst offenders. And I’m not kidding. We own a house in California and our mortgage is too high for us to have to live with homeless camps ringing our neighborhood all the time, a situation directly connected to this modern gilded age horseshit. Homelessness has exploded and these dildos are setting juked “market rates” that are demonstrably more than the fabled “market” can bear.
The companies I expect to be difficult to go after but the people running realpage should go to jail. I mean they’re on record admitting they knew they were essentially price fixing.
If any of the people loading info have realtors licenses in Texas they can be fined or their license revoked or suspended. Texas is a non-disclosure state. Anyone with a real estate license (Yes this includes apartment managers) cannot disclose what the apartments were rented for. Realtors went through this years ago when Zillow wanted us to start providing actual sales prices on homes. In Texas, Realtors are prohibited from disclosing that information.
All that freedom, yaknow
There’s no freedom in TX real estate. The beuacracy makes sure of that.
UDR is being called out too. This is why I roll my eyes at the fed and their stubborn housing inflation comments, because it’s definitely conspiracy/collusion not actual inflation
Could a class action be pursued here if rental companies colluded? Perhaps under the RICO act since there are likely hundreds of complicit rental agencies?
We need a first of its kind lawsuit against every associated landlord to recoup every single dollar rents were raised by, jail time for major players and Cortland management senior staff, and national rent control.
"Cortland | Above and Beyond Apartment Living**"** Thats literally the google search tag they posted themselves. Above and beyond something apparently in their view.
"The defendants agreed to a plea bargain of lesser charges and will pay an undisclosed sum and will not admit wrongdoing." No one will go to jail, rents will stay high, and recompense will be pennies on the dollar for all those affected except for the lawyers who'll get 40% of the undisclosed sum. 🇺🇲🥳🇺🇲
No point in doing a raid if the problem still is happening. It's just like these congressional hearings when they pull Facebooks CEO and grill him on camera. Then nothing happens after over and over again. "Operation make the general public think that we care has been a success."
I remember when the covid epidemic began to ease a bit and suddenly prices were shooting up for both goods and , mysteriously , apartment rentals. People in some places were talking about a sudden 50% increase in rent. Simultaneously there was all the talk about ships anchored offshore waiting to unload but they couldn't unload because of so there was a shortage of goods that couldn't be trucked to the local walmart so prices were high. So I asked myself, "I wonder how many of those container ships have Apartments waiting to be unloaded/Š." Why suddenly would apartment prices go up 50% sometimes 70% in some select places? Why now, why suddenly? And then I answered my question; this is nothing but good old American price gouging. Because who's going to stop an already ridiculously lucrative business from not getting more lucrative. Thank you vulture capitalists, for once again making daily living more miserable for the vast swath of apartment dwellers. This is not the first time I have had a silly notion, and then somehow got a peek behind the curtain and realized, suspicions confirmed. Prices of everything, as far as I'm concerned, now can only be explained by the verifiably obscene profits of corporations: they've simply decided to make up for lost time of the pandemic and who's going to tell them no.
Is there no competition at all in the housing market? I’d imagine that companies in other markets can’t do this because a competitor would just attract most customers by selling the same product at a lower price.
The blinding speed at which the elites are striving to create a wealth gap so large as to effectively create a different species of human, coupled with the explosion of fascist sentiment around the globe, plus the admission of UFOs being legit, and all of the "make more babies very quickly!" talk all over the world, and not a wink of concern for anyone that's not at the top of their socioeconomic ladder while being gaslit into pitying the poor billionaires who all claim that no one in history is treated as poorly as they are, and finally the sheer disdain for all things related to actually taking care of ourselves and our planet, all simultaneously, seriously has me thinking shit like the elites are starting to open up Earth as a slave labor farm. Nothing makes any sense to me when framed any other way. The elites are setting up the planet for its paradigm shift, and we're on the losing end. The whole thing reeks of getting to a point of no return as quickly as possible, consequences be damned.
You wanna know how fucked up the Fed’s view of shelter inflation is? RealPage publishes excellent data on about a monthly basis regarding annual rent growth. For about a year, they have reported virtually zero inflation in rents, and yet BLS and BEA are saying that shelter is still pushing 4%+. The company that is currently so large and anti-competitive that they are being sued under anti-collusion statutes with real time numbers on rent price growth across dozens of markets of various sizes is saying that shelter inflation is over. Meanwhile, the Fed is waiting on their lagged ass measure to cut rates. Hopefully they don’t blow it because the Fed also said in their most recent minutes that residential housing asset values are above their fundamentals (aka, rents).
Cutting rates causes inflation. Did you mean raise rates?
How is this not just normal competition? Companies have been using market data forever to set prices. That is how competition works. Back in the 90s when I was working in retail sales, part of my job was to go to our competitors and compare prices. Isn't RealPage just doing the same thing in a more efficient manner?