If it's illegal to fix prices by collaboration, it should also be illegal to fix prices by implicit collaboration.
I'm under the impression this would be clearly illegal if all these rental companies got in a room with some pencils and calculators and binders full of price data to do the same thing. Why is it different if they do that via a middleman?
If that's true then NIMBYism is also collaboration to inflate property prices. Perhaps we should also be cracking down on the policies that restrict supply despite such obviously high, and rich, demand.
>Why is it different if they do that via a middleman?
Because injecting a middleman into the situation creates a facade of plausible deniability. Obviously, such deniability is complete nonsense to anyone with eyes and a brain, but here we are.
That said, SF's sky high rents are largely due to decades of anti-growth policies that have prevented building enough housing to meet demand.
Yes. This reminds me of the way so much emphasis is put on trying to prevent people from sparking wildfires with cigarettes or abandoned campfires and ignoring the work that needs to be done for good forestry and controlled burns for decades.
It's incredibly short-sighted and irresponsible behaviour when it's done by individuals but institutions somehow get a pass.
I agree that a cartel that is simply moved to a third party should not be legal. But HN doesn’t seem to agree when we discuss the advertising cartel using GARM as a nonprofit to collude. To me it seems that most people are unprincipled about what types of anti competitive behavior is allowed, depending on their personal politics.
Knowing your competiotions pricing doesnt make ot a cartel. It is the agreement between compeotitors to regulate price that makes it a cartel. If I have a saas in industry X and I see that all my competitors price their saas between Y and Z usd/month. Then it isnt a cartel if I price my saas similar.
> [RealPage] Chief Executive Dana Jones said that the company’s software helps both landlords and renters, and that the root causes of rising rents are the lack of affordable housing, increasing demand and inflationary costs of building and insuring housing.
Yep. I do wonder how much the finger-pointing at companies like RealPage is an attempt to distract people from the actual reasons why real estate is so expensive here.
That being said, if RealPage and others are essentially helping landlords do price-fixing, they do need to face consequences, along with the landlords using their services.
As long as people don’t lose sight that the there’s a lot more inflating prices than this, going after collusion and price fixing—including mediating software—is still a worthwhile endeavor.
I worked in this space for a little under a year. There is lots of price fixing in apartment rentals, but it varies widely from city to city.
The place I worked had several different systems that relied on a number of tricks. One I remember off the top of my head would be used by property owners to signal price changes to one another through carefully crafted Craigslist apartment listings.
There are two different issues. One is a lack of housing that drives up rent. The other is collusion to artificially increase rents. In places with severe housing issues like CA, both of these are huge issues and both should be addressed aggressively.
I assumed this was the future around the time I started in going to Uni in 2019. Every apartment I have lived in since has used the same management software, so I assume they are all using the same price fixing systems as well.
Did they forget the lawsuit on the east coast, where their own documents said that they required 95% compliance, and that landlords had to write a reason for non-compliance, and they had their sales staff go above the heads of PMs who weren't following the software's advice.
"So, technically yes, you can reject the recommendations, but if you work for a PM company we will probably tell your boss you're ignoring the software they pay for".
If they accept the higher price suggested by the software, they risk being vacant for longer. A month of vacancy is generally not worth 100 extra dollars a month.
So if the price is too high, the landlord has a strong incentive to drop it.
The price suggestion isn't the issue, the lack of stock absolutely is.
> this software we pay lots of money for says we could be charging more money? No no, let’s ignore this suggestion for the good of our tenants
But the software doesn’t make the number go up. Landlords’ privileged bargaining position does. Collusion requires some prohibition on undercutting; otherwise it’s just markets being markets.
The thing I don't understand in all this is how on earth are rents secret? I mean, can't a landlord fix prices just by looking at nearby rental listings and matching?
Are there certain key details that that the software and its back-end can share that enable price fixing better than open listings?
If tenants were hard to get, looking at nearby listings would motivate the landlord to go cheaper. (I do understand that the platform in question encourages compliance with the recommended pricing.)
When the market conditions favor landlords, they have no reason to compete, though, no matter how they get wind of prices.
(Oh, but, wow! San Francisco is really socking it to the housing problem here with this ban they are seeking, yay!)
Advertise prices are not the actual prices that people are actually paying.
RealPage doesn’t just show the prices of other apartments around you. It gives a recommendation for what you should price your listings. The heart of the price fixing claim here is that this price is higher than landlords would select on their own.
I believe this is widespread. There are plenty of hotels who have 100 rooms, yet only 6 are occupied on any typical night, yet they still price the rooms at $150/night.
Any sane manager would discount the rooms to $75/night, pulling in all the guests from neighbouring hotels, filling the place, and raking in a tidy profit.
Yet 'head office' says discounts aren't allowed, even if it increases revenue. Presumably because the CEO is mates with the competing CEO's and they all decide not to undercut eachother.
In the case of hotel-casinos however I don't know if I believe in the posted prices at all as a lot of people are getting comps. My mother-in-law has a moderate gambling habit at the local casino and she gets free rooms all the time.
They opened a new hotel-casino near the Catskills that I was thinking about using as a base camp but I thought the posted room rates were insane but I'm sure if you were gambling you'd get a better deal.
Also they end their data in 2022 when the effect of the pandemic was still there to push occupancy down. I remember going to Buffalo a lot around that time and having Priceline put me in various Marriott group hotels at great rates.
It makes sense to use the software. It doesn’t make sense that they sign an agreement that they must use the software’s output. Requiring use of the output should be illegal.
> they sign an agreement that they must use the software’s output
They don't. This is the key weakness of the case and the reason that dozens of large landlords have already exited the class actions. Not everything that ProPublica prints is true.
This is the best way to bust the landlord monopoly (if there is one).
Build more houses than we need. Suddenly those landlords have to compete for good tenants. And monopolistic cooperation will suddenly become impossible: when vacancies go up, and finance costs stay the same... the pressure will be on, and all it takes is a single landlord to cave and lower his rent to break the whole thing apart.
Before I moved to Canada, I lived in a country with surplus housing. Renting there was not only incredibly cheap, but very easy to arrange. You could play prospective landlords off each other to get better rent or have them do minor renovations. Legislation makes little to no difference in the face of market power.
It was clear and understandable to me, but follows a format I've seen many times.
Headlines in English tend to have a style that's widely used, but would not be considered good usage outside of headlines, which I could expect to be troublesome for non-native speakers.
If SF just relaxed zoning laws people would actually be allowed to build more housing. That is the only way SF will ever be able to address the root problem of affordable housing. Things like this are a bandaid that will have minimal impact.
It's very Jacobin to pretend that the last-place mayoral candidate, a rich landlord, in San Francisco, the city with the worst housing crisis on the planet, has struck upon a useful and remarkable solution to bring down rents. The biggest problem in America today is that our socialists are the worst and stupidest socialists any country has ever suffered. We need better ones.
Smart and mild people on both sides of the aisle are critical, but you also need a handful of principles-first ideologues on both sides to keep the Overton window from speeding off to one side.
The problem is when the middle gets radicalized and the whole lot of them zoom off to the edge of sanity.
[+] [-] VyseofArcadia|1 year ago|reply
I'm under the impression this would be clearly illegal if all these rental companies got in a room with some pencils and calculators and binders full of price data to do the same thing. Why is it different if they do that via a middleman?
[+] [-] cfcf14|1 year ago|reply
[+] [-] maerF0x0|1 year ago|reply
[+] [-] barryrandall|1 year ago|reply
[+] [-] NickC25|1 year ago|reply
Because injecting a middleman into the situation creates a facade of plausible deniability. Obviously, such deniability is complete nonsense to anyone with eyes and a brain, but here we are.
[+] [-] EGreg|1 year ago|reply
[deleted]
[+] [-] Aloisius|1 year ago|reply
That said, SF's sky high rents are largely due to decades of anti-growth policies that have prevented building enough housing to meet demand.
[+] [-] chongli|1 year ago|reply
Yes. This reminds me of the way so much emphasis is put on trying to prevent people from sparking wildfires with cigarettes or abandoned campfires and ignoring the work that needs to be done for good forestry and controlled burns for decades.
It's incredibly short-sighted and irresponsible behaviour when it's done by individuals but institutions somehow get a pass.
[+] [-] blackeyeblitzar|1 year ago|reply
[+] [-] mint2|1 year ago|reply
The large towers of “luxury” apartments definitely are willing to let units go vacant to maintain rent
[+] [-] victorbjorklund|1 year ago|reply
[+] [-] kelnos|1 year ago|reply
Yep. I do wonder how much the finger-pointing at companies like RealPage is an attempt to distract people from the actual reasons why real estate is so expensive here.
That being said, if RealPage and others are essentially helping landlords do price-fixing, they do need to face consequences, along with the landlords using their services.
[+] [-] SllX|1 year ago|reply
[+] [-] reaperducer|1 year ago|reply
The place I worked had several different systems that relied on a number of tricks. One I remember off the top of my head would be used by property owners to signal price changes to one another through carefully crafted Craigslist apartment listings.
[+] [-] standardUser|1 year ago|reply
[+] [-] emorning3|1 year ago|reply
https://www.politico.com/news/2024/07/12/justice-department-...
[+] [-] 0x1ch|1 year ago|reply
[+] [-] hoofedear|1 year ago|reply
“Hm this software we pay lots of money for says we could be charging more money? No no, let’s ignore this suggestion for the good of our tenants”
[+] [-] FireBeyond|1 year ago|reply
"So, technically yes, you can reject the recommendations, but if you work for a PM company we will probably tell your boss you're ignoring the software they pay for".
[+] [-] tevon|1 year ago|reply
If they accept the higher price suggested by the software, they risk being vacant for longer. A month of vacancy is generally not worth 100 extra dollars a month.
So if the price is too high, the landlord has a strong incentive to drop it.
The price suggestion isn't the issue, the lack of stock absolutely is.
[+] [-] JumpCrisscross|1 year ago|reply
But the software doesn’t make the number go up. Landlords’ privileged bargaining position does. Collusion requires some prohibition on undercutting; otherwise it’s just markets being markets.
[+] [-] kazinator|1 year ago|reply
Are there certain key details that that the software and its back-end can share that enable price fixing better than open listings?
If tenants were hard to get, looking at nearby listings would motivate the landlord to go cheaper. (I do understand that the platform in question encourages compliance with the recommended pricing.)
When the market conditions favor landlords, they have no reason to compete, though, no matter how they get wind of prices.
(Oh, but, wow! San Francisco is really socking it to the housing problem here with this ban they are seeking, yay!)
[+] [-] natbennett|1 year ago|reply
Advertise prices are not the actual prices that people are actually paying.
RealPage doesn’t just show the prices of other apartments around you. It gives a recommendation for what you should price your listings. The heart of the price fixing claim here is that this price is higher than landlords would select on their own.
[+] [-] m_ke|1 year ago|reply
[+] [-] londons_explore|1 year ago|reply
Any sane manager would discount the rooms to $75/night, pulling in all the guests from neighbouring hotels, filling the place, and raking in a tidy profit.
Yet 'head office' says discounts aren't allowed, even if it increases revenue. Presumably because the CEO is mates with the competing CEO's and they all decide not to undercut eachother.
[+] [-] PaulHoule|1 year ago|reply
They opened a new hotel-casino near the Catskills that I was thinking about using as a base camp but I thought the posted room rates were insane but I'm sure if you were gambling you'd get a better deal.
Also they end their data in 2022 when the effect of the pandemic was still there to push occupancy down. I remember going to Buffalo a lot around that time and having Priceline put me in various Marriott group hotels at great rates.
[+] [-] daft_pink|1 year ago|reply
[+] [-] rwmj|1 year ago|reply
[+] [-] jeffbee|1 year ago|reply
They don't. This is the key weakness of the case and the reason that dozens of large landlords have already exited the class actions. Not everything that ProPublica prints is true.
[+] [-] declan_roberts|1 year ago|reply
"it's those greedy landlords fault"
[+] [-] FredPret|1 year ago|reply
Build more houses than we need. Suddenly those landlords have to compete for good tenants. And monopolistic cooperation will suddenly become impossible: when vacancies go up, and finance costs stay the same... the pressure will be on, and all it takes is a single landlord to cave and lower his rent to break the whole thing apart.
Before I moved to Canada, I lived in a country with surplus housing. Renting there was not only incredibly cheap, but very easy to arrange. You could play prospective landlords off each other to get better rent or have them do minor renovations. Legislation makes little to no difference in the face of market power.
[+] [-] ChrisLTD|1 year ago|reply
[+] [-] VyseofArcadia|1 year ago|reply
[+] [-] toomuchtodo|1 year ago|reply
[+] [-] hypeatei|1 year ago|reply
[+] [-] sangeeth96|1 year ago|reply
[+] [-] chongli|1 year ago|reply
[1] https://en.wikipedia.org/wiki/Headline#Headlinese
[+] [-] Something1234|1 year ago|reply
...seeks ban of software, critics say
[+] [-] EGreg|1 year ago|reply
I wrote this article about the wider phenomenon of memes and collusion in public markets:
https://magarshak.com/blog/?p=385
[+] [-] BrandoElFollito|1 year ago|reply
Is this sentence clear for a native speaker of English?
I read the article and as far as I understand there is software that makes it that rents are high and SF wants to ban it.
Now when I carefully parse the words it makes sense (~ "SF seeks to ban some software, and this software is criticized for making rents high")
Was the title clear and understandable to you after a single pass?
[+] [-] winthrowe|1 year ago|reply
[+] [-] ChrisArchitect|1 year ago|reply
San Francisco to ban software that "enables price collusion" by landlords
https://news.ycombinator.com/item?id=41133143
San Francisco to Ban Rent-Setting Software Amid Gouging Worry
https://news.ycombinator.com/item?id=41163936
[+] [-] ChrisArchitect|1 year ago|reply
Some more discussion: https://news.ycombinator.com/item?id=41133143
https://news.ycombinator.com/item?id=41163936
[+] [-] ChrisArchitect|1 year ago|reply
Algorithmic price-fixing of rents is here
https://news.ycombinator.com/item?id=41212616
[+] [-] Dig1t|1 year ago|reply
[+] [-] jeffbee|1 year ago|reply
[+] [-] FredPret|1 year ago|reply
The problem is when the middle gets radicalized and the whole lot of them zoom off to the edge of sanity.
[+] [-] unknown|1 year ago|reply
[deleted]
[+] [-] ChrisArchitect|1 year ago|reply
Algorithmic price-fixing of rents is here
https://news.ycombinator.com/item?id=41212616
[+] [-] euroderf|1 year ago|reply
And just like that, the USSR was magically reconstituted.