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14 big landlords used software to collude on rent prices, DC lawsuit says (arstechnica.com)
submitted 1 year ago by return2ozma@lemmy.world to c/news@lemmy.world
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[-] BT_7274@lemmy.world 181 points 1 year ago

I work in this industry. The biggest problem with the software is it gave the management companies instant access to everyone else’s current prices. The industry has used “market surveys” for years but you had to actually call around and gather those prices yourself. It’s a very time consuming process so many only did their surveys sporadically.

With the software you had instant access to current price data and everyone pretty much raised their prices to match the market average. Then the newer/fancier properties saw the new higher average and thought “We’re a better property so we can raise our prices above the competition.” Which then led to a higher average that the rest then met again. Rinse and repeat and you have a de facto price fixing cartel.

[-] stella@lemm.ee 104 points 1 year ago

This is why 'competition lowers prices' is a load of bullshit.

Ya'll ever seen Walgreens and CVS? Same prices, right next to each other.

What about 2 gas station on opposite sides of the street, charging the exact same price for their fuel?

It's a gentleman's agreement at best, and a cartel at worst. Either way, no business is going to start an 'undercut war' because they don't want their opponents to do the same thing.

Here's another fine example: Nvidia and AMD. AMD releases worse GPUs, then just piggybacks off of Nvidia's ridiculous prices.

It's all a game to funnel as much money as possible to as few people as possible.

[-] dudewitbow@lemmy.ml 53 points 1 year ago

competition only lowers prices if supply isn't limited sadly. And due to how the housing system works, that would virtually never happen.

[-] dubyakay@lemmy.ca 4 points 1 year ago

It could. If something causes housing to be less in demand. Like negative population growth.

[-] SeaJ@lemm.ee 17 points 1 year ago

A duopoly is not a competitive market. It's only when you have lots of suppliers and lots of purchasers that a market is actually competitive.

[-] BT_7274@lemmy.world 7 points 1 year ago

While true, there are some markets where these properties are fighting for a very finite supply of tenants. If they see they are lagging behind in their leasing, they really don’t have any other choice than to lower their prices to make sure they don’t have any vacant units. The industry term is called “vacancy loss” and it’s the one thing the upper management money men actually fear. A unit without someone inside it is literally bleeding money from them so they’ll do nearly anything to fill it.

Hopefully soon they won’t be able to share their prices as easily and they’ll have to fight for their lives by lowering prices to fill vacancies before another property snaps them up.

[-] reversebananimals@lemmy.world 21 points 1 year ago

You're right, except in 99.9% of these situations they don't ACTUALLY lower prices. They just offer a "signing bonus" like 1 month free rent, then charge just as much as everyone else for the other 11 months.

That signing bonus doesn't appear in this tool, so prices don't actually go down.

[-] ChickenLadyLovesLife@lemmy.world 2 points 1 year ago

I had one landlord offer me $200 off my security deposit if I would clean the two-foot-high mound of actual dogshit from the kitchen before moving in. Like, not even a break on the actual rent, just a lowering of the deposit and she thought I'd be too stupid to know the difference. TBF she probably never returned anybody's deposit so in a sense she really would have been saving me money.

[-] stella@lemm.ee 5 points 1 year ago* (last edited 1 year ago)

there are some markets where these properties are fighting for a very finite supply of tenants.

True, but these aren't usually the markets in major cities. It's why rent is actually affordable outside of them.

[-] foyrkopp@lemmy.world 1 points 1 year ago

Office buildings would like a word with you.

It's the reason so many large corporations a talking about RTO, office real estate prices are set to plummet if everyone's keeping to WFH.

Sadly, that's only tangentially related to housing (although I believe to have read something about new subsidies for landlords converting office space into appartments).

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[-] anon_8675309@lemmy.world 69 points 1 year ago

Now as punishment, reset rent prices back a few years.

[-] stella@lemm.ee 15 points 1 year ago

This is the true affirmative action.

[-] jackalope@lemmy.ml 3 points 1 year ago* (last edited 1 year ago)

Reparations not affirmative action.

[-] MelodiousFunk@kbin.social 13 points 1 year ago

The 2020 Revenge Tour will continue until ~~morale improves~~ we decide we're done bleeding the plebs dry.

[-] trash80@lemmy.dbzer0.com 45 points 1 year ago

The complaint, filed earlier today by Attorney General Brian Schwalb, focuses on the multifamily landlords' use of software from Texas-based firm RealPage, which suggests rental prices based on a pricing algorithm. Key to those models, according to the suit, is the data fed in from the landlords and the pressure RealPage puts on them to stick to the code-derived rental rates.

Yes, I'm sure those poor landlords fought against raising rent tooth and nail.

[-] UltraMagnus0001@lemmy.world 44 points 1 year ago

Why do we have landlord monopolies

[-] funkless_eck@sh.itjust.works 34 points 1 year ago

my landlord owns 1400 properties. it's fucking insane.

[-] Bonskreeskreeskree@lemmy.world 23 points 1 year ago

There's companies that own over 100k single family homes, while regularly circle jerking each other on linked in about how "they are dedicated to provided affordable housing to those in need"

[-] Asafum@feddit.nl 3 points 1 year ago

Man those were some bad typos, I can't believe they missed them in the final edit.

It's supposed to read: We are dedicated to prying affordable housing away from those in need for our profit.

[-] bobs_monkey@lemm.ee 32 points 1 year ago

And are rent prices actually going to come down?

Survey: nope!

[-] garretble@lemmy.world 27 points 1 year ago

I thought basically every landlord now uses some software to make sure they charge “market prices” even though their properties are trash.

[-] njm1314@lemmy.world 15 points 1 year ago

Sounds like you're saying every landlord should be taken out the back and beaten.

[-] theuberwalrus@lemmy.world 18 points 1 year ago

That's a weird way to spell guillotine

[-] CADmonkey@lemmy.world 5 points 1 year ago

I don't have a guillotine. But everyone has a beating stick of some kind somewhere, and if not they're easy and cheap to make.

[-] greybeard@lemmy.one 4 points 1 year ago

Have you seen the rent on beating sicks these days?

[-] CADmonkey@lemmy.world 2 points 1 year ago

Sad, back in my day, people could craft their own.

[-] Adalast@lemmy.world 19 points 1 year ago

God, I want to become a mayor or governor or something so I can push a rule through that says only 5% of single-family properties in any jurisdiction are allowed to be rentals, and landlords have to purchase what amounts to "tokens" from the city that are priced inverse proportionally to the ratio of tenant income to rent to be able to keep the rental. Also, wage discrimination is not allowed. If a potential tenant comes forward with proof, the landleech has to prove that they did not discriminate or they will not be allowed to purchase tokens the next year.

Idk, something. Some limitations on the number that any individual can hold in a city and punish them for overcharging.

[-] JustZ@lemmy.world 8 points 1 year ago* (last edited 1 year ago)

There's something to this. Sounds like taxi medallions.

I would settle for a law requiring owners of rental properties to be residents of the same state so they can be properly hauled into court when they break laws.

[-] Adalast@lemmy.world 2 points 1 year ago

Screw "same state", make it "same municipality".

[-] Asafum@feddit.nl 3 points 1 year ago

I've seriously been considering checking out what it would take to build homes and just make a company that only builds starter homes that can't be sold to corporations. Fuck this system running out of control... Rent through the roof and no housing for the poor/lower middle class....

I absofuckinglutley do not in the slightest bit care about being rich, if the company could survive and support a "normal" life for me that would be more than enough.

It's absolutely absurd that we allow the market to run rampant like this and just shrug it off. "Housing crisis? I don't see one, we're selling large houses like hot cakes! Most well over asking price!"

[-] Adalast@lemmy.world 3 points 1 year ago

So something like a for (ethical) profit Habitat for Humanity? I have had a similar fantasy, start companies in each of the major problem sectors that operate openly and honestly only slightly above solvency and offer quality at good prices just to drive the greedy fucks out of business, then I just stay there. I don't take advantage of the monopoly, I just live as I have been. I envision putting the actual material and labor cost of each product on the packaging in plain English. Kinda like a dietary and ingredients info table for a television. Don't put in spyware, don't put in random hidden cameras behind a screen, don't take permissions on devices so I can listen in on people. Do a bank that micro-lends at a 1% markup from the interest rates on my savings accounts. Make everything repairable and put a wiring schematic on the inside of the case if it is a large enough unit. Etc. You know, be ethical in the way I treat my employees and customers. I know, radical concept. I guess that is just the effect of having a math degree, I'm used to radical concepts.

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[-] tsonfeir@lemm.ee 7 points 1 year ago

Humans are cannibals.

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this post was submitted on 01 Nov 2023
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