It’s a shift in collective power. At the core of the issue is landlords communicating together to all set fixed high rents has been illegal for decades. This is collective rent fixing with an extra step. The “AI” here is just a buzzword, it’s masking a black box where many landlords pump in lots of data and a black box algorithm spits out higher rents. The issue occurs when a critical mass of landlords use the same service. The market readjusts from free market competition to the maximum the market can bear without collapsing, exactly what the anti-collusion laws were design to prevent. The economic drivers are reversed.
Like generative AI for art, it doesn’t cleanly fit into any existing governance. I would assume new, and irritating complex, laws will be attempted to be written to control this development as it has more immediate real works impact than other forms of “AI”.
The only way to turn it into a real market, is some kind of collaboration software tools for renters or non-intimate partnerships to gang up.
We need tools that arent making choices based on profit increase but humanitarian necessity (which is probably impossible)
Tools such as :
- finding people to share mortgages with, negotiating problems encountered with roomates, ways to re-shuffle roomates around to find better compatibility, incentives for being less of a dick and contributing to happier roomatism
- collective action in an area such as purchasing cheap out of town space with lots of living area and "roughing it" for a while to put downward pressure on rent prices, maybe even negotiating particular prices to trigger a large number of renter signups ( no way this is legal, but it will get bad enough we are going to have to break some rules)
- shared mortgage investment that is based upon agreed lower reasonable profit, or even money parking, instead of maximizing real estate profit (there has to be some philanthropes who would put there money into this?)
- I hate to have to mention negative landlord tracking, but the worst of the worst gets away with so much shit, we need to come up as close to vigilantism we can get while not breaking laws. I foresee the need for tools where we can track exact letter of law harassment limits etc for the worst offenders who are getting away with too much uncaught illegal and immoral landlording
I had an argument with people the other day that it's not "free" as in unregulated markets that are good but "free" as in competitive ones. If you free a market from governmental influence but captured by private companies that don't meaningfully compete then it's also not free.
Exactly. As with the ongoing RealPage case, all the 'algorithm' and 'AI' stuff is just a system designed to enable price collusion without landlords directly talking to each other.
What if the largest landlords in a community just hired someone to canvas the city on a monthly basis and collect rental price data that way.
In most markets, comparative pricing of other vendors is always a solid baseline for where to start pricing your product. Market intelligence is a critical part of any go to market strategy.
Edit: Just to be clear, I think market collusion is anti-competitive. But where is the dividing line between market research and collusion? Clearly if landlords met in the back of a smoky bar the last sunday of every month to set rents - we'd call that collusion. But is such formal data sharing and price setting actually required to achieve the same effect - practically, landlords could just observe each other's rents to achieve a similar effect. Where should the law decide it is collusion?
If the seller is able to unilaterally hike rents beyond the level which people are willing to pay but they pay it anyway because the alternative is total life failure, then it's obviously not a functioning market.
I think it perfectly fine market. But we slowly going to social agreement that place to live is same basic need as water and food and education. The issue is that everyone wants fancy place and not a communal space.
They’re clearly willing to pay and they put a premium on living in a congested ice box over actual food or what normal people would consider quality of life.
I see nothing wrong with this market at all. The reality is that there’s plenty of people willing to live in these apartments, often splitting the rent with roommates. The more people that do that, the more the rent goes up because now it’s acceptable to have two or even three incomes paying what used to be the rent for a one bed room.
The only way for the little guy to win this game is to not play. Screw those overpopulated metros and go live somewhere else.
I live in an apartment complex that uses RealPage. My roommates and I re-signed the lease earlier this year, with a projected 15% rent price increase. We then walked to our leasing office to ask about it, they simply cancelled the increase. We're now paying the same rate we were last year.
I am fairly certain that 15% increase was the automatic recommendation by RealPage.
It may have been an illegal increase, any apartment built before 2018 in Ontario is subject to rent control, 2.5% was the max this year.
RealPage would only have an affect on new leases with new apartments.
Your lease does not renew, it automatically goes month to month. They can't cancel a lease, they would need a reason to evict and apply for it at the LTB.
The event horizon of ML offers much potential for “disruption” across the various markets. (I bet there will be products that actually do not do significant ML at this scale but claim they “do AI” if it lets them claim that it is transformative magic and not price collusion/copyright laundering/next thing.)
Of course, if your pricing assistant is trained on pricing & occupancy data across all landlords, you and other users are obviously colluding.
Apparently, though, you can successfully pretend you are not colluding. “AI told me to raise prices” and as we observe with copyright laundering so far legal system does not care what AI ingested. Inputs magically disappear into the black box of magic.
A lot of Americans complain how shitty they got it, For Canadians it is like heaven here. You can actually buy a house in a major city and afford nice things and earn a decent salary.
This is not possible in the majority of Canadian cities. Canada is a great place to visit but it is a shitty place to work and live, unless your parents own a house and have a couple of rentals (in Vancouver or Toronto) that you're going to inherit.
Even 100k salary in Toronto is poverty these days, I don't know how people do it anymore. Private industry pays like shit and unless your a Gov Employee it's just tough.
>ive lost all faith in my own country. there is no leadership, no rules, no regulation.
There most certainly is regulation, and that's why housing prices are so high. If you got rid of the regulation, builders would build new housing. It's like this all across Western nations now: they can't build new housing in the needed quantity because of zoning regulations.
This is all clearly a consequence of not enough supply
Question for anyone that knows: how does it end? Will some landlords go bust and get bought by 1 or 2 mega corpos, and then rinse and repeat until it's a McDonald's/Burger King monopoly? Will all rentals be owned by a single entity? Are they already owned by one? I heard all these corps are ultimately owned by Blackrock
I am just trying to see what possibly even worse crisis will spawn from this crisis. Population levels are expected to decrease over the coming decades. Will that trigger a collapse in rents? Where will "greed" move to, what novel forms of collusion and exploitation will we suffer instead of it being all focused on rent and property?
Edit: I just realised that the shift may already be happening in the form of other basic necessity industries colluding: utilities, car insurance, "public" transport, food
"“Everything starts at like $2,200 for a new place in Toronto, or even the old ones, if they’re renovated units,” she said, noting that her monthly take-home income is $3,100."
The article blames "AI" for raising rents, and then later says, "well actually, everyone raised rents".
You can have all the AI in the world, and even all the collusion you can manage, but competition still exists, raise rent to the point that people won't rent, you'll have an empty apartment. Lower it (i.e. ignore the collusion) and you'll fill that spot.
The law of Supply and Demand still works.
The only kind of collusion that might break that law is if landlords are forced by the agreement not to lower rent to compete.
It's really very simple: What's the vacancy rate? If it's low, prices are going up, it's as simple as that. Forget the boogeyman (AKA AI), build more houses.
The problem is on the supply side. It happens because of zoning restrictions. There actually is plenty of housing nationwide, but that isn't really usable because moving involves quite a bit of friction, as well as because of general market failures.
And because it's constantly talked about by activists: rent control doesn't work. It actually reduces supply (because people who would offer apartments at the top end of the market drop out of the market) and liquidity (because people who do and don't already have a lease are treated differently). This is one of the best agreed-upon results in economics.
> Across America, RealPage sells landlords commercial revenue management software. RealPage develops, markets, and sells this software to enable landlords to sidestep vigorous competition to win renters’ business. Landlords, who would otherwise be competing with each other, submit on a daily basis their competitively sensitive information to RealPage. This nonpublic, material, and granular rental data includes, among other information, a landlord’s rental prices from executed leases, lease terms, and future occupancy. RealPage collects a broad swath of such data from competing landlords, combines it, and feeds it to an algorithm.
Based on this process and algorithm, RealPage provides daily, near realtime pricing “recommendations” back to competing landlords. These recommendations are based on the sensitive information of their rivals. But these are more than just “recommendations.” Because, in its own words, a “rising tide raises all ships,” RealPage monitors compliance by landlords to its recommendations. RealPage also reviews and weighs in on landlords’ other policies, including trying to—and often succeeding in— ending renter-friendly concessions (like a free month’s rent or waived fees) to attract or retain renters. A significant number of landlords then effectively agree to outsource their pricing function to RealPage with auto acceptance or other settings such that RealPage as a middleman, and not the free market, determines the price that a renter will pay. Competing landlords choose to share their information with RealPage to “eliminate the guessing game” about what their competitors are doing and ultimately take instructions from RealPage on how to make business decisions to “optimize”—or in reality, maximize—rents.
Every residential land lord in Canada is increasingly rent the maximum legally allowed amount.
They don’t need AI or analysis.
Canada has record immigration levels. And at the same time cities across the country decided, with the support of voters, that new residential development can not be on undeveloped lands. It must be on previously developed lands and increase density
Of course redevelopment is more expensive, takes longer, requires more consultation and planning.
The result is a severe shortage of housing.
Instead of solving this with suburban sprawl, which isn’t ideal but is necessary, politician, voters, and density ideologist choose to blame a scapegoat.
Landlords are an obvious candidate. Adding AI to the mix makes it a trendy story.
This is specific to Ontario.
I was curious how they achieved this, given in BC all rent is controlled. There are workarounds, but it's not straightforward
The complaint outlined in the article is that landlords fed confidential data into Realpage, then used its recommendations to effectively launder price collusion through "AI".
Because doing it algorithmically may allow for market manipulation and monopolistic pricing schemes, particularly if competitors are effectively coordinating price changes via a 3rd party.
I'm so sick of these economic arguments about supply and demand over housing. Basic housing should be provided free of charge by the govt using taxes. Anything above basic and we can start talking about market forces.
Its like arguing about whether to eat apples or oranges on Mars when you can't even get to Mars. Its irrelevant. The alternative is society gets a lot worse for a lot of people and tinkering with plugging legal gaps doesn't address the issue of whether we think people are entitled to a place to live if they are part of our society.
Going back in time, do you think the local village is going to let its warriors or farmers sleep outside in the cold with no shelter then expect them to work as a community for the benefit of the village elders?
Its a core issue, everything else is just busywork at this stage.
We shouldn't permit "mega corporate landlords" to exist. It doesn't take a Marxist to see that consolidation of real estate into fewer and larger corporate holdings is going to snowball in really destructive ways.
Just remember that the entire modern tech ecosystem from pg to Garry to sama are super cool with the spokesperson in chief for handing the reigns of capitalism over to those who view competition, efficiency, markets and freedom with utter contempt:
I don't understand why is government sleeping when greedy landlords are trying to extremely abuse basic necessity. Housing is a basic necessity and landlords are being extremely exploitative and government can't do anything...
Canadian federal government just mandated 3 days in the office for all government employees.
Canadian businesses were lobbying as well as pressure from Ontario Premier Ford and Mayor Olivia Chow. The Ontario and Nova Scotia provincial governments have ordered return to office minimum 3 days a week by October.
Governments in Canada are not sleeping. Quite the opposite in fact.
Using RealPage software which is a Texas company that gathers information from landlords to then recommend prices that the landlords should then use.
So it’s not so much the company itself optimizing based on its own data but the argument goes, at least per the antitrust lawsuit against RealPage, that the landlords are all colluding together via an intermediary.
imagine they had 100m in assets. 100m is either 333 houses priced at 300k or 1 building priced at 100m. On top of that, owning 333 houses in 1 neighbourhood is very different to owning 1 house each in 333 neighbourhoods.
All the other comments aside, the idea that less than 0.1% but more than 0.01% is somehow "not a lot" when 100% is an entire country is baffling. You know that even fractional percentages translates to huge absolute numbers when you're starting with millions, right?
If you see "it only inconveniences forty thousand people" and think "well yeah, it's only forty thousand, that's a small number", you don't understand numbers. Even at just over 0.01%, that's five thousand lives being controlled to the point of being held hostage by one company.
No Canadian should accept that as "this is fine and normal and fair".
meeb|1 year ago
Like generative AI for art, it doesn’t cleanly fit into any existing governance. I would assume new, and irritating complex, laws will be attempted to be written to control this development as it has more immediate real works impact than other forms of “AI”.
beefnugs|1 year ago
We need tools that arent making choices based on profit increase but humanitarian necessity (which is probably impossible)
Tools such as :
- finding people to share mortgages with, negotiating problems encountered with roomates, ways to re-shuffle roomates around to find better compatibility, incentives for being less of a dick and contributing to happier roomatism
- collective action in an area such as purchasing cheap out of town space with lots of living area and "roughing it" for a while to put downward pressure on rent prices, maybe even negotiating particular prices to trigger a large number of renter signups ( no way this is legal, but it will get bad enough we are going to have to break some rules)
- shared mortgage investment that is based upon agreed lower reasonable profit, or even money parking, instead of maximizing real estate profit (there has to be some philanthropes who would put there money into this?)
- I hate to have to mention negative landlord tracking, but the worst of the worst gets away with so much shit, we need to come up as close to vigilantism we can get while not breaking laws. I foresee the need for tools where we can track exact letter of law harassment limits etc for the worst offenders who are getting away with too much uncaught illegal and immoral landlording
tdb7893|1 year ago
crooked-v|1 year ago
testfoobar|1 year ago
In most markets, comparative pricing of other vendors is always a solid baseline for where to start pricing your product. Market intelligence is a critical part of any go to market strategy.
Edit: Just to be clear, I think market collusion is anti-competitive. But where is the dividing line between market research and collusion? Clearly if landlords met in the back of a smoky bar the last sunday of every month to set rents - we'd call that collusion. But is such formal data sharing and price setting actually required to achieve the same effect - practically, landlords could just observe each other's rents to achieve a similar effect. Where should the law decide it is collusion?
BigParm|1 year ago
dools|1 year ago
rodgerd|1 year ago
refurb|1 year ago
If rents are paid no matter what, you dont need AI to tell you to set it high.
But we know rents arent limitless because ability to pay is not limitless.
para_parolu|1 year ago
ars|1 year ago
There are also people who can move to other locations.
If rents are up, you need more houses, it's really not that complicated.
koolba|1 year ago
I see nothing wrong with this market at all. The reality is that there’s plenty of people willing to live in these apartments, often splitting the rent with roommates. The more people that do that, the more the rent goes up because now it’s acceptable to have two or even three incomes paying what used to be the rent for a one bed room.
The only way for the little guy to win this game is to not play. Screw those overpopulated metros and go live somewhere else.
metrognome|1 year ago
I am fairly certain that 15% increase was the automatic recommendation by RealPage.
thisisnico|1 year ago
RealPage would only have an affect on new leases with new apartments.
Your lease does not renew, it automatically goes month to month. They can't cancel a lease, they would need a reason to evict and apply for it at the LTB.
anileated|1 year ago
Of course, if your pricing assistant is trained on pricing & occupancy data across all landlords, you and other users are obviously colluding.
Apparently, though, you can successfully pretend you are not colluding. “AI told me to raise prices” and as we observe with copyright laundering so far legal system does not care what AI ingested. Inputs magically disappear into the black box of magic.
Dare not think otherwise lest Nvidia tanks.
deisteve|1 year ago
ChumpGPT|1 year ago
A lot of Americans complain how shitty they got it, For Canadians it is like heaven here. You can actually buy a house in a major city and afford nice things and earn a decent salary.
This is not possible in the majority of Canadian cities. Canada is a great place to visit but it is a shitty place to work and live, unless your parents own a house and have a couple of rentals (in Vancouver or Toronto) that you're going to inherit.
Even 100k salary in Toronto is poverty these days, I don't know how people do it anymore. Private industry pays like shit and unless your a Gov Employee it's just tough.
-ExPat...never coming back.....
shiroiushi|1 year ago
There most certainly is regulation, and that's why housing prices are so high. If you got rid of the regulation, builders would build new housing. It's like this all across Western nations now: they can't build new housing in the needed quantity because of zoning regulations.
pjkundert|1 year ago
It’s caused several builders I know to close their businesses.
Congratulations! Sometimes, evidently, you get what you vote for?
markus_zhang|1 year ago
emeril|1 year ago
canada is better than most
stonethrowaway|1 year ago
ChrisArchitect|1 year ago
DOJ sues realpage for algorithmic pricing scheme that harms renters
https://news.ycombinator.com/item?id=41330007
collaborative|1 year ago
Question for anyone that knows: how does it end? Will some landlords go bust and get bought by 1 or 2 mega corpos, and then rinse and repeat until it's a McDonald's/Burger King monopoly? Will all rentals be owned by a single entity? Are they already owned by one? I heard all these corps are ultimately owned by Blackrock
I am just trying to see what possibly even worse crisis will spawn from this crisis. Population levels are expected to decrease over the coming decades. Will that trigger a collapse in rents? Where will "greed" move to, what novel forms of collusion and exploitation will we suffer instead of it being all focused on rent and property?
Edit: I just realised that the shift may already be happening in the form of other basic necessity industries colluding: utilities, car insurance, "public" transport, food
ars|1 year ago
The article blames "AI" for raising rents, and then later says, "well actually, everyone raised rents".
You can have all the AI in the world, and even all the collusion you can manage, but competition still exists, raise rent to the point that people won't rent, you'll have an empty apartment. Lower it (i.e. ignore the collusion) and you'll fill that spot.
The law of Supply and Demand still works.
The only kind of collusion that might break that law is if landlords are forced by the agreement not to lower rent to compete.
It's really very simple: What's the vacancy rate? If it's low, prices are going up, it's as simple as that. Forget the boogeyman (AKA AI), build more houses.
zahlman|1 year ago
The problem is on the supply side. It happens because of zoning restrictions. There actually is plenty of housing nationwide, but that isn't really usable because moving involves quite a bit of friction, as well as because of general market failures.
https://www.youtube.com/watch?v=3RSwkXbjaE0
And because it's constantly talked about by activists: rent control doesn't work. It actually reduces supply (because people who would offer apartments at the top end of the market drop out of the market) and liquidity (because people who do and don't already have a lease are treated differently). This is one of the best agreed-upon results in economics.
https://www.nmhc.org/research-insight/research-notes/2023/re... , among countless other links a basic search might turn up.
cortesoft|1 year ago
The complaint states:
> Across America, RealPage sells landlords commercial revenue management software. RealPage develops, markets, and sells this software to enable landlords to sidestep vigorous competition to win renters’ business. Landlords, who would otherwise be competing with each other, submit on a daily basis their competitively sensitive information to RealPage. This nonpublic, material, and granular rental data includes, among other information, a landlord’s rental prices from executed leases, lease terms, and future occupancy. RealPage collects a broad swath of such data from competing landlords, combines it, and feeds it to an algorithm.
Based on this process and algorithm, RealPage provides daily, near realtime pricing “recommendations” back to competing landlords. These recommendations are based on the sensitive information of their rivals. But these are more than just “recommendations.” Because, in its own words, a “rising tide raises all ships,” RealPage monitors compliance by landlords to its recommendations. RealPage also reviews and weighs in on landlords’ other policies, including trying to—and often succeeding in— ending renter-friendly concessions (like a free month’s rent or waived fees) to attract or retain renters. A significant number of landlords then effectively agree to outsource their pricing function to RealPage with auto acceptance or other settings such that RealPage as a middleman, and not the free market, determines the price that a renter will pay. Competing landlords choose to share their information with RealPage to “eliminate the guessing game” about what their competitors are doing and ultimately take instructions from RealPage on how to make business decisions to “optimize”—or in reality, maximize—rents.
giarc|1 year ago
>The rent increase guideline for 2025 is 2.5%.
>The guideline is the maximum a landlord can increase most tenants’ rent during a year without the approval of the Landlord and Tenant Board.
https://www.ontario.ca/page/residential-rent-increases
mcpherrinm|1 year ago
99_00|1 year ago
They don’t need AI or analysis.
Canada has record immigration levels. And at the same time cities across the country decided, with the support of voters, that new residential development can not be on undeveloped lands. It must be on previously developed lands and increase density
Of course redevelopment is more expensive, takes longer, requires more consultation and planning.
The result is a severe shortage of housing.
Instead of solving this with suburban sprawl, which isn’t ideal but is necessary, politician, voters, and density ideologist choose to blame a scapegoat.
Landlords are an obvious candidate. Adding AI to the mix makes it a trendy story.
andrewstuart|1 year ago
Actually maybe that future is now.
Fire-Dragon-DoL|1 year ago
CalRobert|1 year ago
bobbylarrybobby|1 year ago
Fire-Dragon-DoL|1 year ago
2Gkashmiri|1 year ago
what happened to "you paid $100 last year. now from january you pay $120 or vacate?"
jffry|1 year ago
Enginerrrd|1 year ago
unknown|1 year ago
[deleted]
globalnode|1 year ago
Its like arguing about whether to eat apples or oranges on Mars when you can't even get to Mars. Its irrelevant. The alternative is society gets a lot worse for a lot of people and tinkering with plugging legal gaps doesn't address the issue of whether we think people are entitled to a place to live if they are part of our society.
Going back in time, do you think the local village is going to let its warriors or farmers sleep outside in the cold with no shelter then expect them to work as a community for the benefit of the village elders?
Its a core issue, everything else is just busywork at this stage.
hungie|1 year ago
cwilby|1 year ago
benreesman|1 year ago
https://youtu.be/zI7hbEuopLI?si=MJaJ9lVGJqLVUiTG
cute_boi|1 year ago
somerandomqaguy|1 year ago
Canadian businesses were lobbying as well as pressure from Ontario Premier Ford and Mayor Olivia Chow. The Ontario and Nova Scotia provincial governments have ordered return to office minimum 3 days a week by October.
Governments in Canada are not sleeping. Quite the opposite in fact.
Findeton|1 year ago
makeitdouble|1 year ago
How do you convert an amount of money into a number of registered properties ?
vlovich123|1 year ago
So it’s not so much the company itself optimizing based on its own data but the argument goes, at least per the antitrust lawsuit against RealPage, that the landlords are all colluding together via an intermediary.
loktarogar|1 year ago
andrewjl|1 year ago
TheRealPomax|1 year ago
If you see "it only inconveniences forty thousand people" and think "well yeah, it's only forty thousand, that's a small number", you don't understand numbers. Even at just over 0.01%, that's five thousand lives being controlled to the point of being held hostage by one company.
No Canadian should accept that as "this is fine and normal and fair".
brigadier132|1 year ago
unknown|1 year ago
[deleted]