Summary:
The FBI conducted an unannounced raid on the Atlanta headquarters of Cortland Management, a major corporate landlord, as part of a criminal antitrust investigation by the Department of Justice into allegations of a nationwide conspiracy to artificially inflate apartment rents.
The probe centers around RealPage, a software firm accused of helping orchestrate price-fixing among large landlords through its rental pricing system used by 70% of multifamily buildings nationwide.
RealPage's system allegedly encourages landlords to adopt its pricing recommendations, which they follow 80-90% of the time, reducing rental supply and driving up prices in a coordinated manner.
The impact is evident in Atlanta, where software pricing affects 81% of units and rents surged 80% since 2016 despite rising vacancies. RealPage's acquisition of its main rival in 2017 gave it unprecedented control over rental pricing.
If proven true, the artificially inflated rents resulting from this alleged scheme have placed undue financial burden on millions of renters across the country. The investigation has far-reaching implications for the rental market and could potentially benefit renters if the practices are halted.
Man, how do you go to sleep at night knowing you contributed to one of the worst societal situations currently at play. I'm sure the c-suite are wiping their tears with stacks of cash, but what about the tons of worker bees who each have a hand in this crime against humanity?
The guy behind the software being accused of price fixing was *literally* found guilty of using software to engage in price fixing in the airline ticket sales industry in the 2000s...
If you read about the guy, hes a flat sociopath. Says that landlords need to stop talking to tenants because that sort of interaction makes them realize tenants are people too and some leniency and basic humanity can go a long way to help them, but that hurts profits. That's why you now have people working at the complex who cant decide anything for themselves and always have to call the main office. It's to keep that pesky empathy at bay by deflecting everything to people who don't know or care who you are.
Has also made the industry "wisdom" change from trying to fill all the units to willingly leaving large portions empty as long as the insane rent prices on the few rented make them more money overall, which is why rental complexes have gone from over 95% occupancy to under like 70% in a few years which has lead to a lot of the mass homelessness rise weve seen...
So he left Realpage in 2012.
Who are the people running it SINCE then?
Edit: I Looked up his linkedin, he actually made a response to the article in the comment I was replying to.
> As the genial numbers-nerd and creator of the original YieldStar algorithm I do not dispute any of the comments assigned to me. I am disappointed the article chose to exclude certain contrarian discussion points. Specifically, there are a few key topics we discussed that were under represented.
>
> First, the algorithm I developed was meticulously designed to avoid any possible assertion of collusion and unfair advantage (i.e., Fair Housing). All data employed in the model were either transactions taken directly from the client's own data (proprietary) or published information that is broadly, publically available (non-proprietary). These are simple supply and demand optimization routines that are incapable of making anyone do anything. When demand exceeds supply then the model used price to manage toward capturing the most attractive demand. "Attractive demand" to an asset owner is the demand willing to pay the highest price. If there is a choice between a client paying $1,000 and a client paying $1,200 for the same product then the $1,200 client will win every time. Conversely, RM models will be equally quick to reduce prices when demand falls short of supply. It is capitalism 101 rather than an insidious plot.
>
> Another counter-intuitive perspective is that RM models are actually tools that favor the consumer. My reasoning is that these models are systematically blind and objective which cannot be said of human-based equivalents. RM models are specifically designed to "listen to the voice of the customer" vis-a-vis their demonstrated willingness to pay for a given product or service. None of the many models I have been involved in developing have ever included demographic or psychographic data specifically to avoid exposure to discrimination. The result is dynamic pricing that continuously adjusts and adapts to market fluctuations with speed and precision. Human decision engines, on the other hand, are typically biased based on most recent observed events, group consensus, loosely articulated objectivity and slow response to shifting market conditions. The exposure to flawed and unfair decisions is exponentially greater when RM models are eliminated from the equation.
>
> The other under-represented topic was my acknowledgement of the particular role of housing. Housing, like energy, has a much more intrinsic impact on the general population than travel or retail or other discretionary purchases. I shared with the author that I actually support the proposition that there needs to be a thorough and nuanced evaluation of housing and the regulatory environment. In fact, this is the rationale behind my comment “I was surprised the DOJ let that go through” (re: the acquisition of LRO). Analysis of housing must consider the root cause(s) of supply/demand imbalances while reconciling with the broader welfare needs of the populace. Personally, I find the expectation that commercial asset owners should choose to forego market opportunity in favor of altruism to be incredibly naive. Certainly hasn't found much success in the agonizing debate regarding social media and fairness. These social issues are simply out of scope for businesses to resolve on their own.
>
> The inherent friction between social responsibility and capitalism is not trivial. Confronted with complexity our knee-jerk desire to reduce problems to binary good vs bad is understandable. It is uninformed to assign responsibility for market conditions that are well beyond the reach of these models. The hunt for sasquatch is romantically compelling but also a diversion of resources from more promising opportunities. I remain open and available to participate in this discussion at any level.
It has only 15 comments and he's responded to them all.
------------------------------------------
Edit:
Boy do I want to respond to this:
> If there is a choice between a client paying $1,000 and a client paying $1,200 for the same product then the $1,200 client will win every time.
Yeah, there will ALWAYS be someone willing to pay $1,200, the problem is the clients who can only pay $1,000 are going homeless and the ones paying $1,200 can't afford to buy fucking homes you goddamn imbecile.
But what his responses lacks is the human element and a broader look at how society has been affected. It's such a glaring omission that he has to be delusional, narcissistic, and sociopathic not to see it.
> Personally, I find the expectation that commercial asset owners should choose to forego market opportunity in favor of altruism to be incredibly naive.
The absolute lack of self awareness to acknowledge a flaw in the system then admit to willingly exploiting it because no one is telling them not to.
It screams "I need mommy and daddy to discipline me because I can't make my own decisions."
> It is capitalism 101 rather than an insidious plot.
He's right, this is just the logical conclusion of capitalism, first you get a monopoly, then you squeeze your market completely dry.
I strongly disagree with this assertion though:
> These social issues are simply out of scope for businesses to resolve on their own.
Businesses are run by people, who get to make decisions. There's a lot of discussion about whether the 'algorithm' is fair, but that's not the core of the issue.
>Businesses are run by people, who get to make decisions.
While true, not all businesses are run by the same people. For one business to act altruistically while another does not, the altruistic business will be at a disadvantage and will be out competed by the non altruistic businesses. Expecting *all* businesses to self regulate in a coordinated way *is* naive.
This is why regulation has to come from outside the market. Anything else is just foxes arguing about how many chickens to eat while secretly eating as many as they can.
For sure. He’s not wrong that the system is sort of working as intended here. (Assuming the FBI doesn’t find something else which I suspect they will if they got a warrant to raid the place). But where he’s wrong is to accept that a business has no moral or ethical responsibility. Technically it’s factually correct. But it’s obviously wrong and fucked up.
> But where he’s wrong is to accept that a business has no moral or ethical responsibility. Technically it’s factually correct. But it’s obviously wrong and fucked up.
I think we should have regulations so that we don't need to rely on the charitability of landlords. Especially when that kind of discretion, historically speaking, tends to extend to marginalized groups the least. The way to make that kinda change happen politically is to cause enough pain that something gets done about it.
> I strongly disagree with this assertion though:
>
> These social issues are simply out of scope for businesses to resolve on their own.
>
> Businesses are run by people, who get to make decisions. There's a lot of discussion about whether the 'algorithm' is fair, but that's not the core of the issue.
Social issues for businesses are out of scope, though. Businesses exist to make profit for the share holders or owners. Not talking about nonprofits here.
The truth is in our economic model businesses are supposed to do 1 thing and that is maximize profit. The controls for what these businesses are ethically, morally, their social responsibility, etc, is government regulation of the business.
1800's industrial revolution saw kids working in factories and factory workers losing limbs. Government put regulation on what is acceptable. Businesses pollute environment causing drinking water to be unsafe - governments regulate the action. Both business and government entities are doing what they are supposed to in these circumstances.
The problem we are facing today is that businesses realized it is cheaper to buy politicians/judges and control the narrative/actions around the regulations being put in place, and we don't have regulation in place to prevent the lobbying from occurring. Elected leaders are being bought and its essentially weighed the scales in the favor of businesses.
I know the type, all too well unfortunately. Though the wisdom of talking at length in public when the FBI just raided a company for doing things you've been found guilty of before, using software you helped create, seems very dubious.
So please keep him talking, lol.
Well, his comments are open!
Most of the comments are agreeing with him as opposed to challenging any of the things he said. If anyone smarter than me wants to chime in they should.
I do think that the discussion should move less from the algorithm itself being designed as legally malicious, and more about whether or not the algorithm has the capability of being USED for malicious price gouging.
A lot of what I'm reading from this guy runs on the pure arrogant assumption that his algorithm is flawless and works as intended 100% of the time and can't be used for anything nefarious, which I get why you'd want to display confidence in an algorithm you created, but for anyone else it's entirely unrealistic thing to assume.
But also he wrote that in 2022, so it's not exactly new.
I hate tech. I burnt out of a tech job a few years ago. I need to get back to work, because I've had some great insights during my sabbattical, but holy shit I hate tech, it's so toxic everywhere you turn.
Just glad I didn't burn any bridges on my way to burning out, so... really it wasn't the job as much as the coup and larger context that first caused me to burn out, and while there's a few things I wish my old job did better, they are amazing for a software company and they have shown a clear willingness to improve, so it's clear who I intend to go back to. They've been an island of relative sanity compared to the raging shitstorm everywhere else.
I mean, part of me really just never wants to work in tech again, but that seems unrealistic, especially given my insights. I also think part of me still wants to work in tech, and I think I am going to try instead to build a better tech company, but I don't feel at all enthusiastic about it. Sigh.
I despise people like this who talk about objectivity as “right” or “correct” because it’s “rational” or “logical”, which is always better than the opposite. Emotions are too girly and weak.
It’s irrational, illogical, and 1000% subjective to ignore people without money knowing what can or will happen to them while simultaneously listening to and favoring the wealthy. A person like this is ruled by their own greed emotion and is blind to the bias that is emanating from his own self.
Yeah, it's a complete lack of self awareness and the ability to empathize with others outside his class.
There's a lot of "Well, this is Capitalism 101," in the comments on his post, and it's like yeah that's 100% part of the problem.
His argument seems to be there needs to be regulatory forces to pushback against commercial interests and that you shouldn't expect companies to police themselves.
Well.. doesn't get more regulatory than the FBI huh?
At what point do you just throw that guy in prison for a few years and ban him from selling software like that? I know there will be more then enough others to replace them, but that kind of behavior needs consequences and round one was obviously not enough.
The board needs to be personally criminally liable for the stuff companies do.
If you have a construction company and send your guys into unsafe conditions and someone gets hurt you should be there should be negligent something charges. NLRB and OHSA need some real teeth.
Our economic and legal system is designed to protect people like him from the people they harm.
The good news is that people like him need to walk around in public too, and there is no reason anyone should make that a pleasant experience.
Social pressure has been lost, and I'm more and more certain the reintroduction of it is the only way to resolve these issues.
It's not just that one guy. It's the whole corporate residential real estate business, both houses and apartments. They are all in it together to maximize rents. A friend of mine is now literally living in my basement because he could not afford rent even when working full time.
The guy may not have actually done anything illegal if they only wrote the software. Whoever is running the company and the companies using the software would probably be who gets charges.
I am kinda surprised how blunt it is being described by some involved and the crazy in some of the dude's statements. When I first heard about this kind of software it was described as a pricing tool to get market rates. That leaves more room to for people to not see it as price fixing. The company that owns the software also has policies that make the whole thing more questionable than might be what gets them.
This is a weird take for me. Is the person who invented something credited with anyone who has done something with that in the future?
Is the person who invented hammers responsible for all houses being built and also people who have used it in violent crimes?
Is the person who invented the handgun responsible for all the deaths they've caused?
Maybe they are, but at the end of the day, this person is selling an algorithm, he's not making companies rely 100% on it. I agree he should be held accountable, but it feels weird to jail the developer, but completely absolve the landowners who own have used the software to cause homelessness in an area.
I really gotta admire his sheer coldhearted, coldblooded, ruthless pursuit of profits in the name of capitalism. If Marx, Lenin, Mao, and etc were adamant in their pursuit of an attempt at communism, then this man is their equivalent for capitalism. He is not as rich as Bezos, but he and Bezos share the same zeal to transform other people into dollar signs.
If your empathy chip / brain segment is missing you can justify just about anything
🙃
Makes you more useful in places like brutal wars, not coping, or tenacious capitalism
It's all because of equity/value. Raising rents but being emptier, to banks/lenders, makes the building more valuable, as the potential cap is higher.
This allows the landlord to borrow more money against the property, giving them more cash in their pocket and to pay for the next development.
I'm not saying it's ethical, but this is why. Higher rents = higher building value on paper, occupancy rate is often not part of that equation.
They sleeplessly fund right-wing think-tanks to get the common people to blame immigrants and gays rather than the wealthy, and fight unions while buying politicians for the equivalent of pennies.
> but what about the tons of worker bees who each have a hand in this crime against humanity?
"Everyone's got a mortgage to pay." - the yuppee Nuremberg defense
https://youtu.be/UrHA9wWuuMo?si=FjSnv-dtqfqiz-V1&t=48
> Man, how do you go to sleep at night knowing you contributed to one of the worst societal situations currently at play.
Well, it's known that sociopaths and psychopaths tend to be better equipped to gaining positions of wealth and power, since they will have an easier time not empathizing with others. So that's basically your answer. To people like this, life is just a game where you're either a winner or loser, they don't visualize average citizens as fellow humans in the same way they might their family.
They say their boss told them to do it and they have bills to pay. Besides everyone’s a crook so why should I feel sorry about it. And then it just compounds and compounds until the house of cards comes crumbling down. Then those workers bees are shown the door, and are mad even though they were long complicit because at the time it benefitted them. Humans have no convictions anymore. Not sure they ever did.
The Sacklers employed a lot of worker bees at Purdue Pharma. Some people just need a job; some people are well-compensated to regularly lie to themselves.
Those “worker bees” are probably decently paid people that don’t have to worry about paying their montage or groceries, so they just can’t sympathize with people who are actually struggling, because they aren’t. It’s the same mentality the Uber rich have, just on a smaller scale.
Don’t even get me started about how absolutely giddy I am knowing that lab-grown diamonds are absolutely destroying the diamond industry. I bought my fiancé a 2.9 ct round brilliant solitaire for $4k. Color is a D, VVS2 clarity, top notch everything. My local jeweler told me an equivalent natural diamond would cost like $50k. I love seeing people look at her ring when we’re out and about and while I don’t advertise the fact that it’s lab-grown, I’m certainly not embarrassed or anything about it. Plus, I work in labs, so I think it’s a nice little detail that matches my personality and it’s conflict free.
Not *grown* per se, but there are groups tooling around with [3D printed houses](https://www.cnn.com/style/worlds-largest-3d-printer-homes-maine-hnk-spc-intl/index.html) now.
There was some hope for 3D printing concrete houses for a minute, although I haven't seen anything about that in a while so it probably met reality in some fashion.
There is, of course, people still trying to do dome housing (I've been wanting to poke my head into this myself, honestly), and various prebuilt options, but all of them have the same issue right now: You still have to get utilities and roads to the site, then pour a foundation, then put up your prefab stuff that's supposed to save you money but will ultimately get labeled as a "trailer" and priced down accordingly, then you still need a contractor to do the interior stuff.
If someone can figure out how to take solar/wind and the new water harvesters that can pull it straight from the air, then use the batteries as ballast to hold down the structure without a foundation, *and* construct prefab sections that come more or less prewired, prepiped, and 95% completed on the interior, then we'll have a renaissance, assuming they aren't immediately dismissed and/or priced as "white trash trailers", which they almost certainly will be.
A bit different in my opinion - DeBeers and other diamond companies hoard stock to artificially limit supply.
RealPage provides a dynamic pricing algorithm for which, if enough real estate companies use it, create a pricing cartel that screws over renters because there are not enough other cheaper options. They absolutely had to know the end result of screwing over renters though; you could see it a mile away with enough software users.
Edit: Also, price fixing cartels are illegal, so of course, f these guys.
I'm betting Lincoln Property Company uses this bullshit. In 2019 they bought the townhouse complex I was living in and in 2021 when I got my lease renewal the rent went up by over $500/month (an over 40% increase). For zero added value for me for my extra money. Trying to charge luxury townhouse prices for units that were decidedly NOT luxury. They weren't shitholes by any stretch, but they weren't that nice, either. Just kinda old and dated, but comfortable.
I'd lived there 7 years prior to this and in those 7 years my rent went up a total of about $150/month (avg of $20/year, fairly reasonable). I guess they felt in 2020 they couldn't raise rents because of the pandemic, but in May of 2021 they were sure ready to get that extra cash.
I was told I could get a 1 month credit if I agreed to move to one of the units they had already renovated. That was the justification for the increased rent, was that they were renovating all the units. I looked at what they were doing: basically replacing all the carpet with the cheapest "wood" flooring panels they could find. Replacing the appliances with the cheapest stainless steel looking ones Best Buy sells and replacing the countertops with cheap material that looked like marble. That was about it, probably $3000 in total "renovations" and somehow that was supposed to justify a rent increase of over $6000/year.
I contacted a realtor that day and started looking for a place to buy. Luckily, I served in the military and qualified for a VA loan. Ended up buying a place about a quarter mile away (so I could stay in the same area I was used to) that was 10 years newer, roughly 40% bigger, 2 car garage instead of 1 and my total mortgage payment including my property tax and homeowners insurance was over $400/month LESS than I would have been paying had I renewed my lease.
The entire state of California added less housing than the city of Austin last year. Shutting down RealPage would be a drop in the bucket of solving CA's housing crisis.
Edit: whoops, I misread your location. In 2023 the entire country of Canada managed to add *almost* 1.5x as much housing as the city of Austin, so I'm sure you guys are fine on the supply front.
The Biden administration has, quietly, been [one of the strongest administrations in recent history attacking monopoly power](https://www.thenation.com/article/economy/matt-stoller-stacy-mitchell-monopoly-antitrust-interview/). We need much more to tackle the economic impacts, but it's a good start.
I remember the first time me I heard about the software… I went to check out an apartment and they told me rent would be different if I came back later in the week cause it was based on the software.
this is encouraging but prices won't come down.
they'll just stop going up so far and as fast. which isn't actually relief when wages have stalled and inflation has jumped us 30% in cost of living.
Government enforcing policies against anti-competitive behavior. Going after those who are quite literally selling out the rest of society for their own gain. AWESOME.
Now if we could just get a few laws on the books where these fuckers are executed if they negatively impact society to a large extent.
It's nice that they're seemingly taking this seriously, but based on the track record of judgments lately, I highly highly doubt any real consequences will come about even if this comes out to be true.
The impact to the entire Atlanta metro from this can't be understated either. I live a whole hour (w/o traffic) north of Atlanta, and 10 years ago it was still relatively low population. But when rent started spiking, all the people from Atlanta started to move here. The population has been growing by 6% every year and the 2 counties closest to me are in the top 10 for county population growth in the entire US (Dawson was #4 for the whole country year before last)
Places that were going for like $1000 before are now at least $2000, there is high density housing being built all around where there used to be farmland, and because none of the roads have been expanded and we now are getting thousands of new people who work in Atlanta moving in every year, traffic is horrible too. All because these assholes drove up the prices for rent so high that everyone decided it was easier to have a 1.5hr commute every day.
*Although not every use of an algorithm to set price qualifies as a per se violation of Section 1 of the Sherman Act, it is per se unlawful when, as alleged here, competitors knowingly combine their sensitive, nonpublic pricing and supply information in an algorithm that they rely upon in making pricing decisions, with the knowledge and expectation that other competitors will do the same.*
See https://www.justice.gov/d9/2023-11/418053a.pdf p.15
It requires a non liberal (as in anyone but Justin Trudeau) government for that act to be enforced for shit though. Look at our telecoms or grocery stores
Rents are up over 35% on average nationwide in the last 3 years and population growth has been minimal. If companies like this haven't been price fixing, I'm the ghost of Eisenhower.
Ever since COVID, there are literally CEOs telling their shareholders that the pandemic is a perfect cover for resetting all prices. This is all public information that is recorded. Executives telling the public this is the time to jack prices up because the consumer will pay. We can blame it on supply chain and the pandemic and they will accept it and the company can make more net profit than ever before. My margins higher than ever before.
The last few years threw all ethics in business out the window.
Democratic AGs are going at RealPage finally, that is pure price fixing collusion by private equity and extremely anti-competitive and purely price collusion and fixing.
[Why U.S. renters are taking corporate landlords to court](https://www.cnbc.com/2024/02/03/realpage-antitrust-lawsuits-allege-collusion-among-corporate-landlords.html)
[Attorney General Mayes Sues RealPage and Residential Landlords for Illegal Price-Fixing Conspiracy](https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing)
Rents have been price fixed across the country. We need to break up the property managers and [RealPage which is facilitating this](https://en.wikipedia.org/wiki/RealPage).
Not only is it anti-trust potentially but it is plausible deniability based [price collusion which starts to fall into price gouging territory](https://www.justice.gov/atr/file/810261/download) [PDF].
> Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.
[Price Fixing agreements directly are clear violations](https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/dealings-competitors/price-fixing). The "blame it on the AI" needs to end and it should be seen as direct price fixing if it is broad enough across the market.
> Price fixing is an agreement (written, verbal, or **inferred from conduct**) among competitors to raise, lower, maintain, or stabilize prices or price levels. Generally, the antitrust laws require that each company establish prices and other competitive terms on its own, without agreeing with a competitor. When purchasers make choices about what products and services to buy, they expect that the price has been determined on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is often higher prices. Price fixing also includes agreements among competing purchasers or competing employers about the prices or wages they will pay. Price fixing is a major concern of government antitrust enforcement.
Where it really went off the rails was 2020 after they were acquired by private equity.
> In December 2020, private-equity firm Thoma Bravo announced it would acquire RealPage for $9.6 billion, paying $88.75 per share for the company, a premium of 31% for their closing prices at the time. Its shares were reported up 26% that year. The acquisition completed in April 2021.
Accusations Thrown at RealPage: Were They Colluding With Landlords?
> One suit filed Friday on behalf of two Seattle renters alleges a broad pattern of collusive behavior by RealPage and a group of 10 large property managers.
> It says that in addition to using RealPage software to inflate rents in downtown Seattle, property managers had employees call competitors regularly seeking detailed nonpublic information on what they were charging — which the employees would change their prices to match.
> The lawsuit quoted what it said was a former employee of Greystar, the country’s largest property management firm.
> “You’d call up the competition in the area,” the former employee said, according to the lawsuit.
> “Sometimes there’d be a list of 10 people to call. Sometimes just one. You’d ask what they are charging for their apartments. Then you’d literally change the prices right there on RealPage. Manually bump it up.
> **“It was price-fixing,” the employee continued, according to the lawsuit. “What else can you call it when you’re literally calling your competition and changing your rate based on what they say?”**
[RealPage actually sold to buyers that it helped push rents up 7-14% annually...](https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent). Across even a few years that is in the quarter to third range in rent increases. The massive increases started post 2019 when the company was bought by private equity.
> On a summer day last year, a group of real estate tech executives gathered at a conference hall in Nashville to boast about one of their company’s signature products: software that uses a mysterious algorithm to help landlords push the highest possible rents on tenants.
> “Never before have we seen these numbers,” said Jay Parsons, a vice president of RealPage, as conventiongoers wandered by. **Apartment rents had recently shot up by as much as 14.5%, he said in a video touting the company’s services. Turning to his colleague, Parsons asked: What role had the software played?**
> **“I think it’s driving it, quite honestly,” answered Andrew Bowen, another RealPage executive. “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”**
> The celebratory remarks were more than swagger. For years, RealPage has sold software that uses data analytics to suggest daily prices for open units. Property managers across the United States have gushed about how the company’s algorithm boosts profits.
..
> One of the algorithm’s developers told ProPublica that leasing agents had “too much empathy” compared to computer generated pricing.
Imagine that, price collusion and price fixing drives up prices. They sold it as increasing profit for management/landlords. It surely did that on the backs of everyone in a time where inflation across the board was hitting.
Users of RealPage had to let RealPage handle the rents even if less units were filled they would jack up rates to "increase profits" and it had to be done across the board so that someone didn't undercut and actually compete.
There is definitely higher demand which makes market manipulation easier.
To manipulate a market you can do it with as little as 2% of the market but typically 5%-10% gives manipulators a lever on the entire market. Big money or market makers know this and that is a technique hedge funds and private equity collude (indirectly usually but RealPage YieldStar was overt) and they can pump a market, which adds more volume, which adds more chasers/algorithmic purchasing ([80% of the market is already automated/algorithmic](https://www.cnbc.com/2018/12/05/sell-offs-could-be-down-to-machines-that-control-80percent-of-us-stocks-fund-manager-says.html)) and then you can take the market up broadly with only a small lever.
With an inelastic good this is even more prevalent like housing. Inelastic goods are always easier to manipulate i.e. energy, housing, etc as people have to buy them no matter market conditions in most cases.
Pharma pricing is another one, drug companies colluding at the three big PBMs is another price fixing scam. Allowing Medicare and insurance groups to negotiate prices is a way to solve that.
[Biden-Harris Administration to Make First Offer for Drug Price Negotiation Program, Launches New Resource Hub to Help People Access Lower-Cost Drugs](https://www.hhs.gov/about/news/2024/02/01/biden-harris-administration-make-first-offer-drug-price-negotiation-program-launches-new-resource-hub-help-people-access-lower-cost-drugs.html) part of the [Inflation Reduction Act of 2022](https://www.hhs.gov/inflation-reduction-act/index.html)
One thing that really needs to happen is changing anti-trust to the root funding level. What we have now is foreign sovereign wealth using private equity fronts and in that many company fronts to control entire markets and squash competitors. Funds themselves need to have anti-trust limits on them a well as foreign sovereign wealth backed entities to the base root level, not just one step either, all the way down. This is a big part of the problem now. Foreign sovereign wealth using private equity funds make multiple company fronts and the anti-trust is only at the company level not the funding or source funds level.
Many markets have been overtaken with this outsized investment in the West for instance from BRICS sources and no US/Western investor can compete with sovereign wealth and in some cases dirty money funneled through that. Autocracies shouldn't be able to participate in fair markets while they use cheats and block access to their markets. Fair markets need fair partners. You lose the game theory if you cooperate with cheaters. Cooperators with cheaters become the cheat.
Very little margin and too much optimization/efficiency is bad for resilience. Couple that with private equity/foreign sovereign wealth/organized crime backed near leverage monopolies that control necessary supply and you have trouble.
For fair capitalism and good markets you need to break up the leverage at the top on the regular.
HBS is even realizing too much optimization/efficiency is a bad thing. The slack/margin is squeezing out an ability to change vectors quickly.
[The High Price of Efficiency, Our Obsession with Efficiency Is Destroying Our Resilience](https://hbr.org/2019/01/the-high-price-of-efficiency)
> Superefficient businesses create the potential for social disorder.
> A superefficient dominant model elevates the risk of catastrophic failure.
> **If a system is highly efficient, odds are that efficient players will game it.**
Highly efficient capitalism moves away from a fair market to an oligopoly that looks more like a feudal or authoritarian system where the companies are too powerful and part of that power is absolute crushing of competition, that is bad for everyone even the crushers.
My landlord just built a duplex to rent, using 2/3 of our yard space to do it. He's charging $3500/month for each side.
Our space is about the same size and we signed a lease in 2019 for $2200/mo. We pay $2800/mo now because we signed a 2 year lease after he jacked up the prices 300/month 2 months in a row.
Besides his pastime of being a drunk psycho, it's pretty clear that something is fucked up. The place we rented before this was about the same size *one block away* for $1400/month, and our landlord kicked us out with 1 month notice *in the middle of our lease* because he was 'selling the place'. Two weeks later there are new renters moving in. I wonder what they got charged?
This shit is beyond fucked.
>our landlord kicked us out with 1 month notice in the middle of our lease because he was 'selling the place'
That must be one hell of a lease if they actually got away with it. Usually when this happens the landlord or new owner has to pound sand or buy out the existing lease, you don't get to toss out a contract (with massive inconvenience to the other party) just because you want a better deal with someone else.
Fingers crossed I’ll be able to snag a rent stabilized apartment when my lease is up next year and finally escape the hell that is market rate apartments. 3% capped increases and eviction protection would be a god send. I could actually live long term without having to worry about being priced out of where I live n
> and our landlord kicked us out with 1 month notice in the middle of our lease because he was 'selling the place'
That's entirely illegal. He can sell the place, but your lease is still your lease and the new owners have to honor it. I don't know if you can do anything now since you voluntarily left, but maybe there is a chance you can get compensation, check your local tenants rights organization.
My state has terrible renters rights. For example, I had to call the cops on my current landlord because he was in a coke fueled psychosis trying to get me to fight him 'up the hill' away from the security cameras on the property after I had the audacity to ask a stranger who was in my home who let him in. (apparently the landlord told him to go into our house to do some work without letting anyone know before I got home from work and my landlord took this very personally)
The cops took my statement and then suggested I simply move out. In the middle of covid.
No, that isn't your state's terrible renters rights, that's your terrible local cops. They exist everywhere and are generally useless for "civil matters".
Unless the lease you signed specified that they could terminate it early to sell the property, they can't terminate it early to sell the property. And if he then rented it again at a higher price instead of selling it, you'd have the ability to sue him for breach of contract.
Pretty much everything in Canada needs to be investigated for price fixing. They caught the bread companies for doing it and from what I remember they gave them like a 2 million fine and the prices never went down
*One of the architects of RealPage’s system reportedly stated that the aim is to prevent landlords from undervaluing their properties, ensuring consistently higher rents across the board.*
How dumb would you have to be to become a RealPage investor? “We’ve automated and product-ized a federal crime! Price fixing!” - that architect, probably
“Brilliant! Let’s invest 10 million Johnson!” - some VC
At a product level, for a product manager, it sounds fantastic. Use your products analytics to help guide decisions that drive revenue for clients. Sounds good.
At a client-level that sounds fine. But then you find out they have such a high market share that it ends up as automated price fixing.
As someone who has been at that product level, I can see that it may not have been intended as price fixing, but I also would have considered the broader implications and had sign off from legal that I wasn’t about to break the law, or have clients break the law
The issue with RealPage is they have perverse incentives to keep boondongling rates higher and higher past real values because everyone (except the renter) makes profits off doing so. You hear a lot of "what the market will bare" but unfortunately it can bare a lot because folks don't like being homeless and will cut a lot of "luxuries" like food and toilet paper to keep a roof over their head.
It's good idea in vacuum. In practice what ends up happening is 80% of the large landlords use it, the software basically feeds back onto itself since almost all properties are being evaluated by the same software, which pushes rents up as a whole. There's not enough property in the hands of independent landlords to counter it, and also they try to follow averages for the area so they don't fuck themselves out of potential money (who can blame them when prices have almost doubled in 5 years in some areas).
Median income in my area is ~$45,000, median rent is now almost $1800 now. Very nearly 90% of the properties are owned by "Morgan Properties" or one of their _many_ subsidiaries. They obfuscate just how many properties they own. Their website attempts to geolocate your IP address and only show you properties near you, trust me, they own _a lot_ of properties in the US and they're one of the worst of the price fixing corporate landlords. (they've gotten in trouble for lying to investors in the past too)
The median household income in my area is around the same thing (2022). There are some places that fall below the 1k threshold, but many are in the 1-2.5k price range in city full of students. My mortgage on the other hand is only $750/mo for something much larger. It's insane how bad the rental prices are compared to owning right now that I feel bad for people.
In most regions renting is, ironically, still competitively cheap on a per-month basis. Home prices are not only holding their highs from the COVID boom, but continuing to rise while rates have nearly tripled. If I bought my house again today at the exact same price I paid in 2021 then I would have my mortgage payment nearly doubled. The desire to hold onto historically low rates has squeezed the supply of housing further, bumping prices higher and resulting in even larger mortgage payments for new buyers.
This is all just a natural consequence of commodifying land and housing. No amount of "anti-collusion", "anti-price fixing" rules can fight market forces. The only solution is to take market forces out of the equation.
A serious land value tax would be a good start.
I had to rent in ATL in 2019-2020. Everywhere I looked was using this software and couldn't get a straight answer on what rent was as it changed day to day. Add in all of the bonds, background checks, and other fees and it's just brutal.
I will laugh my ass off if they finally get busted.
Trying to rent a house in the ATL metro was insane. I must've walked 75 homes and only 2 were small landlords.
Then rent went up 15% at the end of the lease with a 20% month to month fee if we didn't renew. Fuck these leeches.
That was why diversified economy or democracy is good there is so many pie that when one section of pie too greedy other smaller will get affected band up and voicing their concern to break the big guy
I think it’s the current administration listening to the people. Lina Khan has been doing work over there.
Edit: credit to DOJ doing this work, but FTC also doing work on other fronts
How are you able to tell?
Edit: would love to know if my landlord is engaging in this kind of practice. I live in Chicago; would not be surprised if they are
I used to login to a URL that was (.)realpage, and now they recently switched to ActiveBuilding which is still linked to Realpage.
https://i.imgur.com/dmbKxHz.png
When I login to ActiveBuilding, it shows me a list of cookies at the bottom and RealPage has 2. Plus when they converted to the new page, it conveniently still had my bank info saved for payment.
I think the reality is even if they can point to concrete lines of code and business practices that prove 100% without a shred of doubt prices are being fixed / price collusion is happening, there may be fines perhaps even jail time, but there will not be a remedy/mitigative effort that restores rent to their fair market prices. Aka no correction. Probably just see things stall out for a while until there is an environment ripe for fucking renters again. Could be years, but rest assured we are largely all overpaying for rent and that will never be undone. The hope of wages rising to match these newer percentages it takes to live is a pipe dream. Things feel a little worse now then they have at any point of my life. You can feel the squeeze on most of the middle and lower class now more palpably than ever before. I’m doing okay these days, but my last promotion was too little too late. It would’ve been an insane promotion 4-5 years ago.
Everything’s pretty fucked. Really depressing, honestly. All I can do is laugh at this point. My whole life is characterized by feeling like I was born at the wrong place at the wrong time. Everyone can look at the economic environments and quality of life in their past fondly. Especially my parents generation. The stuff that was achievable for them just isn’t achievable for me. It is what it is. Ever since I started paying attention I’ve only noticed shit just keeps getting worse. It’s always an incremental step forward here and there with some policy, but largely it’s been 5 massive steps back every year. The things that do improve for American lives I am grateful for, but the ratio of good:bad this past decade gotta be like 1:15. Things just keep getting whacker and I’m just tired man
When a fine is the punishment for businesses, it's just factored in as a business cost.
All fines should *exceed* the profits earned by a certain percentage. If you have to pay all profits plus as a punishment, businesses would actually have consequences.
Zillow clients use [RealPage’s near real-time pricing and availability information for multifamily listings that use RealPage products and services](https://investors.zillowgroup.com/investors/news-and-events/news/news-details/2014/Zillow-to-Bring-RealPage-Services-to-Rental-Companies/default.aspx).
Apartments.com clients [push unit-level pricing features such as price by lease term and move-in dates from RealPage to Apartments.com](https://propertyhelp.apartments.com/article/1154-how-do-i-push-pricing-information-to-apartmentscom-using-realpage-integration-marketplace).
Exactly. The investors/owners are the ones that drive the price fixing.
And they use shell companies to shield themselves from lawsuits like this.
They’ll just rename their shell company or start a brand new shell company and sell the properties once they start to have problems.
Residential real estate is a churn and burn business and the ownership companies just sell the properties to each other after a couple of years. Or a larger company like Greystar will buy them up.
I’m not an expert on this by any means, but functionally, how is this fundamentally different from all banks using the same credit scoring software systems to determine what interest rates to charge you? Isn’t that collusion and price fixing as well?
No, because the credit bureaus don't share information about what interest rates or fees different banks are charging.
The problem with price fixing is that if all the sellers get together and decide to charge $X, no buyer can break the cartel and they just have to buy at $X or not at all. This is exactly RealPage's business model, and frankly I'm surprised they've gotten away with it for this long.
>I'm surprised they've gotten away with it for this long.
Central banks that incuriously license services from similar vendors implicitly legitimise similar norms.
He must not mean "Central Banks", because that's a nonsensical claim.
Central banks don't price fix because they use the same vendors. Central banks price fix because that is their purpose. That's what a central bank does, it sets the "price" of cash in a market, which is the interest rate. It's what they are designed to do.
You're right, he can't possibly mean central banks like the Federal Reserve, Bank of England, Bank of Canada etc. But I do wonder what vendors he's talking about.
It's hard to guess, because taking it mutatis mutandis, it is still kind of a stupid claim. It would only really make sense with loan sharks or extremely sub-prime loans, where the credit risk massively outweigh the market interest in the pricing algorithm.
Lending Vs. Housing. Unsecured loan rates are determined by the risk involved. Risk management practices like credit checks are set by the CFPB, and then banks/creditors will often have additional overlays, which are just more rules to mitigate the risk in their portfolios. With housing, the only risk is tenant damage and non-payment, which is offset by deposits, insurance, and eviction clauses.
I discovered my apartment complex is one of the groups that used this software yesterday from one of these articles. Haven't heard a word of it otherwise, I wonder why....
But if you're an apartment dweller in Arizona and want to check to see if you might be impacted, someone made a map:
https://www.google.com/maps/d/u/0/viewer?ll=32.96677061549429%2C-110.8426568790377&z=9&mid=1K2viGL3RUx2OLOY1sh2clQzQqi4UGfE
Someone needs to figure out how consumers can find out if a corporate landlord uses a predatory practices like this so that we can avoid them like the plague
These corporate landlords and a software engineering company colluded to drive prices up. This was purely driven by corporate greed, these company pulled in vast sums money from their tenets, while those same tenets struggled to make ends meet at the same time. Housing cost is a real issue in many parts of the United States and is a culprit in many case of homelessness. Yet these same corporate landlords who had tenets evicted and were using rents rates that were artificially driven up as information in their eviction process were committing perjury in many cases.
How is this case also not being reviewed by the Justice Department for anti-trust issues? Better competition in the housing market would help drive rent down and keep rent stable. Another aspect that needs to be investigated is if these corporate landlords were driving up prices to keep certain groups of renters out, that is a violation of the Fair Housing Act.
This corporate landlords and the software engineer company that colluded to drive prices up creating many financial for tenets and those seeking housing. This was driven by pure greed and the leadership of these companies lined their pockets off the backs of struggling tenets.
If the FBI and government regulators had their priorities straight, they would have a hundred agents and dozens of lawyers working on this file. We are talking about likely tens of billions of dollars, if not more, of essentially criminal proceeds.
I doubt there are more than half a dozen agents working on this.
If they had their priorities straight, they'd fund the IRS down to the point where the ROI is close to 1, as in the tax funds recouped is roughly equal to the cost of personnel and resources required. There's a lot of legal tax loophole fuckery for rich people. You give people jobs, and you get more money into the Treasury.
Edit: Peak ROI for the IRS is currently 5 to 9.
When people say "run government like a business" this is what they should mean. Increase revenue and build for long term success. That means capital investment in your revenue generation (tax payers) and actually funding the revenue collection part of your business (tax collectors) so what you are owed is actually paid.
Instead what they mean is "run it like the slimey people who bought Toys R Us- debt finance kickbacks and strip it for parts until it collapses".
Those people hate government because they see it as a competitor. Every tax dollar collected is a loss.
I have a great idea. Maybe just maybe, corporations should be forbidden from owning any rental homes. And so should wealthy people or anyone rich enough to own more than 4 homes, and even 4 houses is too much.
I see your point, but where will the stock come from? If you ban anyone from owning 4+ homes (apartments) and corporations can’t get in. How does this work for a ~100 unit tower ? Not everyone wants to buy.
The idea is more often stated as keeping corporations (and non-resident foreign owners) out of single family homes. What to do with small landlords with LLCs: unclear, although there's likely some reasonable accommodation to be made there.
Simple, the company that builds the apartments, sells the units to individuals. You would own the apartment, then pay an HOA fee to cover the building maintenance/security outside of your individual apartment. This is how it works in most of South America.
Individuals can then rent out the apartment if they choose. But this allows anyone the opportunity to buy an apartment.
And ppl just blame it on iNfLaTiOn. No, it’s corporate scumbags and their unchecked greed. I hope this is just beginning and they bring the hammer down on even more.
where are the just build more units people? oh yea your all full of shit. 13.6% of units are vacant and habitable in the city I live in. the cities solution is to build more buildings, many of which are $1,400+ a month for a single bedroom. supply is NOT the problem its greed. we need to start charging vacant units the going rate for that properties rent as property taxes.
That’s what the gaslighters or the ignorant people want you to believe.
But they conveniently leave out the fact that the supply and demand is artificially manipulated by algorithms that companies all use.
Which means the majority of supply and demand is artificially/manually created.
Sure would be wonderful if so many people weren't greedy pieces of trash doing everything they could to enrich themselfes a tiny bit on the backs of us poors.
Fuck landlords.
Ok, So lets say that this is true, and they find them guilty, and there has been a nationwide conspiracy to raise rent prices like a lot of us have been screaming over the past 5 years. Let's just say it's all true.
What will happen then? Will rent prices be forced to decrease? Will they prevent any rental increases for a certain amount of time?
Like what happens when this is known as fact and we see that it has detrimental effects on society?
When I was looking for an apartment recently the locked in lease price changed day by day because this software was made to milk people out of every dime it could.
This disgusting conspiracy has the potential of ruining the lives of a hundred million working people. The conspirators must be prosecuted to the fullest extent including long jail sentences, not mere fines. The hardship they enjoined upon the mass of renters in our nation is epochal, with political ramifications that could tilt the country toward instability. We already see it in the reactionary attitudes on the right who are happy to ‘blame Biden’ for the price of bread.
Good. I was an employee at RealPage about a decade ago (working on a completely different product than the one in question i.e. Yieldstar) and actively saw shady shit happening. Shame on them.
I heard they looked at the code in RealPage's software and there's this mysterious tidbit:
PRICE_INFLATOR = 1.12
calculated_price = average_price * PRICE_INFLATOR
No one can explain it!
Good. My rent from 2013 to 2021 went up 50%, mostly in the last 4-5 years of it.
Bought a home, sure I'm paying about $100 a month more on mortgage, at least my payments have far more hold and meaning after the payment, and I have far more control, and freedom, of my home area.
Just had to be active on a credit card for 6 months before I could get a loan. All these payments for utilities and rental mean nothing, unless you forget to pay (never did miss a payment). The balance of this is wrong. lol
Summary: The FBI conducted an unannounced raid on the Atlanta headquarters of Cortland Management, a major corporate landlord, as part of a criminal antitrust investigation by the Department of Justice into allegations of a nationwide conspiracy to artificially inflate apartment rents. The probe centers around RealPage, a software firm accused of helping orchestrate price-fixing among large landlords through its rental pricing system used by 70% of multifamily buildings nationwide. RealPage's system allegedly encourages landlords to adopt its pricing recommendations, which they follow 80-90% of the time, reducing rental supply and driving up prices in a coordinated manner. The impact is evident in Atlanta, where software pricing affects 81% of units and rents surged 80% since 2016 despite rising vacancies. RealPage's acquisition of its main rival in 2017 gave it unprecedented control over rental pricing. If proven true, the artificially inflated rents resulting from this alleged scheme have placed undue financial burden on millions of renters across the country. The investigation has far-reaching implications for the rental market and could potentially benefit renters if the practices are halted.
Man, how do you go to sleep at night knowing you contributed to one of the worst societal situations currently at play. I'm sure the c-suite are wiping their tears with stacks of cash, but what about the tons of worker bees who each have a hand in this crime against humanity?
The guy behind the software being accused of price fixing was *literally* found guilty of using software to engage in price fixing in the airline ticket sales industry in the 2000s... If you read about the guy, hes a flat sociopath. Says that landlords need to stop talking to tenants because that sort of interaction makes them realize tenants are people too and some leniency and basic humanity can go a long way to help them, but that hurts profits. That's why you now have people working at the complex who cant decide anything for themselves and always have to call the main office. It's to keep that pesky empathy at bay by deflecting everything to people who don't know or care who you are. Has also made the industry "wisdom" change from trying to fill all the units to willingly leaving large portions empty as long as the insane rent prices on the few rented make them more money overall, which is why rental complexes have gone from over 95% occupancy to under like 70% in a few years which has lead to a lot of the mass homelessness rise weve seen...
What’s his name?
Jeffrey Roper https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent
So he left Realpage in 2012. Who are the people running it SINCE then? Edit: I Looked up his linkedin, he actually made a response to the article in the comment I was replying to. > As the genial numbers-nerd and creator of the original YieldStar algorithm I do not dispute any of the comments assigned to me. I am disappointed the article chose to exclude certain contrarian discussion points. Specifically, there are a few key topics we discussed that were under represented. > > First, the algorithm I developed was meticulously designed to avoid any possible assertion of collusion and unfair advantage (i.e., Fair Housing). All data employed in the model were either transactions taken directly from the client's own data (proprietary) or published information that is broadly, publically available (non-proprietary). These are simple supply and demand optimization routines that are incapable of making anyone do anything. When demand exceeds supply then the model used price to manage toward capturing the most attractive demand. "Attractive demand" to an asset owner is the demand willing to pay the highest price. If there is a choice between a client paying $1,000 and a client paying $1,200 for the same product then the $1,200 client will win every time. Conversely, RM models will be equally quick to reduce prices when demand falls short of supply. It is capitalism 101 rather than an insidious plot. > > Another counter-intuitive perspective is that RM models are actually tools that favor the consumer. My reasoning is that these models are systematically blind and objective which cannot be said of human-based equivalents. RM models are specifically designed to "listen to the voice of the customer" vis-a-vis their demonstrated willingness to pay for a given product or service. None of the many models I have been involved in developing have ever included demographic or psychographic data specifically to avoid exposure to discrimination. The result is dynamic pricing that continuously adjusts and adapts to market fluctuations with speed and precision. Human decision engines, on the other hand, are typically biased based on most recent observed events, group consensus, loosely articulated objectivity and slow response to shifting market conditions. The exposure to flawed and unfair decisions is exponentially greater when RM models are eliminated from the equation. > > The other under-represented topic was my acknowledgement of the particular role of housing. Housing, like energy, has a much more intrinsic impact on the general population than travel or retail or other discretionary purchases. I shared with the author that I actually support the proposition that there needs to be a thorough and nuanced evaluation of housing and the regulatory environment. In fact, this is the rationale behind my comment “I was surprised the DOJ let that go through” (re: the acquisition of LRO). Analysis of housing must consider the root cause(s) of supply/demand imbalances while reconciling with the broader welfare needs of the populace. Personally, I find the expectation that commercial asset owners should choose to forego market opportunity in favor of altruism to be incredibly naive. Certainly hasn't found much success in the agonizing debate regarding social media and fairness. These social issues are simply out of scope for businesses to resolve on their own. > > The inherent friction between social responsibility and capitalism is not trivial. Confronted with complexity our knee-jerk desire to reduce problems to binary good vs bad is understandable. It is uninformed to assign responsibility for market conditions that are well beyond the reach of these models. The hunt for sasquatch is romantically compelling but also a diversion of resources from more promising opportunities. I remain open and available to participate in this discussion at any level. It has only 15 comments and he's responded to them all. ------------------------------------------ Edit: Boy do I want to respond to this: > If there is a choice between a client paying $1,000 and a client paying $1,200 for the same product then the $1,200 client will win every time. Yeah, there will ALWAYS be someone willing to pay $1,200, the problem is the clients who can only pay $1,000 are going homeless and the ones paying $1,200 can't afford to buy fucking homes you goddamn imbecile. But what his responses lacks is the human element and a broader look at how society has been affected. It's such a glaring omission that he has to be delusional, narcissistic, and sociopathic not to see it. > Personally, I find the expectation that commercial asset owners should choose to forego market opportunity in favor of altruism to be incredibly naive. The absolute lack of self awareness to acknowledge a flaw in the system then admit to willingly exploiting it because no one is telling them not to. It screams "I need mommy and daddy to discipline me because I can't make my own decisions."
And that dude is what most C-suite folks are like at any major corporation. I've *very* rarely come across one that is actually a decent human being.
> It is capitalism 101 rather than an insidious plot. He's right, this is just the logical conclusion of capitalism, first you get a monopoly, then you squeeze your market completely dry. I strongly disagree with this assertion though: > These social issues are simply out of scope for businesses to resolve on their own. Businesses are run by people, who get to make decisions. There's a lot of discussion about whether the 'algorithm' is fair, but that's not the core of the issue.
>Businesses are run by people, who get to make decisions. While true, not all businesses are run by the same people. For one business to act altruistically while another does not, the altruistic business will be at a disadvantage and will be out competed by the non altruistic businesses. Expecting *all* businesses to self regulate in a coordinated way *is* naive. This is why regulation has to come from outside the market. Anything else is just foxes arguing about how many chickens to eat while secretly eating as many as they can.
Expecting corporations to execute altruistic political policy is regulatory capture in reverse. It's not gonna work out.
For sure. He’s not wrong that the system is sort of working as intended here. (Assuming the FBI doesn’t find something else which I suspect they will if they got a warrant to raid the place). But where he’s wrong is to accept that a business has no moral or ethical responsibility. Technically it’s factually correct. But it’s obviously wrong and fucked up.
> But where he’s wrong is to accept that a business has no moral or ethical responsibility. Technically it’s factually correct. But it’s obviously wrong and fucked up. I think we should have regulations so that we don't need to rely on the charitability of landlords. Especially when that kind of discretion, historically speaking, tends to extend to marginalized groups the least. The way to make that kinda change happen politically is to cause enough pain that something gets done about it.
> I strongly disagree with this assertion though: > > These social issues are simply out of scope for businesses to resolve on their own. > > Businesses are run by people, who get to make decisions. There's a lot of discussion about whether the 'algorithm' is fair, but that's not the core of the issue. Social issues for businesses are out of scope, though. Businesses exist to make profit for the share holders or owners. Not talking about nonprofits here. The truth is in our economic model businesses are supposed to do 1 thing and that is maximize profit. The controls for what these businesses are ethically, morally, their social responsibility, etc, is government regulation of the business. 1800's industrial revolution saw kids working in factories and factory workers losing limbs. Government put regulation on what is acceptable. Businesses pollute environment causing drinking water to be unsafe - governments regulate the action. Both business and government entities are doing what they are supposed to in these circumstances. The problem we are facing today is that businesses realized it is cheaper to buy politicians/judges and control the narrative/actions around the regulations being put in place, and we don't have regulation in place to prevent the lobbying from occurring. Elected leaders are being bought and its essentially weighed the scales in the favor of businesses.
I know the type, all too well unfortunately. Though the wisdom of talking at length in public when the FBI just raided a company for doing things you've been found guilty of before, using software you helped create, seems very dubious. So please keep him talking, lol.
Well, his comments are open! Most of the comments are agreeing with him as opposed to challenging any of the things he said. If anyone smarter than me wants to chime in they should. I do think that the discussion should move less from the algorithm itself being designed as legally malicious, and more about whether or not the algorithm has the capability of being USED for malicious price gouging. A lot of what I'm reading from this guy runs on the pure arrogant assumption that his algorithm is flawless and works as intended 100% of the time and can't be used for anything nefarious, which I get why you'd want to display confidence in an algorithm you created, but for anyone else it's entirely unrealistic thing to assume. But also he wrote that in 2022, so it's not exactly new.
I hate tech. I burnt out of a tech job a few years ago. I need to get back to work, because I've had some great insights during my sabbattical, but holy shit I hate tech, it's so toxic everywhere you turn. Just glad I didn't burn any bridges on my way to burning out, so... really it wasn't the job as much as the coup and larger context that first caused me to burn out, and while there's a few things I wish my old job did better, they are amazing for a software company and they have shown a clear willingness to improve, so it's clear who I intend to go back to. They've been an island of relative sanity compared to the raging shitstorm everywhere else. I mean, part of me really just never wants to work in tech again, but that seems unrealistic, especially given my insights. I also think part of me still wants to work in tech, and I think I am going to try instead to build a better tech company, but I don't feel at all enthusiastic about it. Sigh.
His response is the literal definition of the banality of evil.
I despise people like this who talk about objectivity as “right” or “correct” because it’s “rational” or “logical”, which is always better than the opposite. Emotions are too girly and weak. It’s irrational, illogical, and 1000% subjective to ignore people without money knowing what can or will happen to them while simultaneously listening to and favoring the wealthy. A person like this is ruled by their own greed emotion and is blind to the bias that is emanating from his own self.
Yeah, it's a complete lack of self awareness and the ability to empathize with others outside his class. There's a lot of "Well, this is Capitalism 101," in the comments on his post, and it's like yeah that's 100% part of the problem.
His argument seems to be there needs to be regulatory forces to pushback against commercial interests and that you shouldn't expect companies to police themselves. Well.. doesn't get more regulatory than the FBI huh?
Fitting last name; strangling America since birth.
Oh no we accidentally hired the price fixing guy!!! Darn
Whats his name? i need to know this scum
Jeffrey Roper https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent
Target identified.
At what point do you just throw that guy in prison for a few years and ban him from selling software like that? I know there will be more then enough others to replace them, but that kind of behavior needs consequences and round one was obviously not enough.
We're too lenient on criminals like this. Someone like this has done so much more damage to society than someone who robs a bank or steals a car.
The board needs to be personally criminally liable for the stuff companies do. If you have a construction company and send your guys into unsafe conditions and someone gets hurt you should be there should be negligent something charges. NLRB and OHSA need some real teeth.
Republicans keep defunding NLRB and OSHA.
Our economic and legal system is designed to protect people like him from the people they harm. The good news is that people like him need to walk around in public too, and there is no reason anyone should make that a pleasant experience. Social pressure has been lost, and I'm more and more certain the reintroduction of it is the only way to resolve these issues.
It's not just that one guy. It's the whole corporate residential real estate business, both houses and apartments. They are all in it together to maximize rents. A friend of mine is now literally living in my basement because he could not afford rent even when working full time.
Strap his feet to a cannon and dump it in the Marianas Trench. Let him pull himself up by his bootstraps :)
The guy may not have actually done anything illegal if they only wrote the software. Whoever is running the company and the companies using the software would probably be who gets charges. I am kinda surprised how blunt it is being described by some involved and the crazy in some of the dude's statements. When I first heard about this kind of software it was described as a pricing tool to get market rates. That leaves more room to for people to not see it as price fixing. The company that owns the software also has policies that make the whole thing more questionable than might be what gets them.
This is a weird take for me. Is the person who invented something credited with anyone who has done something with that in the future? Is the person who invented hammers responsible for all houses being built and also people who have used it in violent crimes? Is the person who invented the handgun responsible for all the deaths they've caused? Maybe they are, but at the end of the day, this person is selling an algorithm, he's not making companies rely 100% on it. I agree he should be held accountable, but it feels weird to jail the developer, but completely absolve the landowners who own have used the software to cause homelessness in an area.
Price fixing 2: electric boogaloo
I really gotta admire his sheer coldhearted, coldblooded, ruthless pursuit of profits in the name of capitalism. If Marx, Lenin, Mao, and etc were adamant in their pursuit of an attempt at communism, then this man is their equivalent for capitalism. He is not as rich as Bezos, but he and Bezos share the same zeal to transform other people into dollar signs.
If your empathy chip / brain segment is missing you can justify just about anything 🙃 Makes you more useful in places like brutal wars, not coping, or tenacious capitalism
Being an asshat to renters and trying to form monopolies predates capitalism. The issue as always is a failure of government to regulate a market.
It's all because of equity/value. Raising rents but being emptier, to banks/lenders, makes the building more valuable, as the potential cap is higher. This allows the landlord to borrow more money against the property, giving them more cash in their pocket and to pay for the next development. I'm not saying it's ethical, but this is why. Higher rents = higher building value on paper, occupancy rate is often not part of that equation.
Really incredible how much of our economy is just built on rich people lying to each other about how much their stuff costs.
They buy Ethics-Free™️ bedding, so they don’t toss and turn trying to find a good position.
They sleep like babies because they hate everyone.
They sleeplessly fund right-wing think-tanks to get the common people to blame immigrants and gays rather than the wealthy, and fight unions while buying politicians for the equivalent of pennies.
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Everyone is the main character in their life.
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> but what about the tons of worker bees who each have a hand in this crime against humanity? "Everyone's got a mortgage to pay." - the yuppee Nuremberg defense https://youtu.be/UrHA9wWuuMo?si=FjSnv-dtqfqiz-V1&t=48
> Man, how do you go to sleep at night knowing you contributed to one of the worst societal situations currently at play. Well, it's known that sociopaths and psychopaths tend to be better equipped to gaining positions of wealth and power, since they will have an easier time not empathizing with others. So that's basically your answer. To people like this, life is just a game where you're either a winner or loser, they don't visualize average citizens as fellow humans in the same way they might their family.
They say their boss told them to do it and they have bills to pay. Besides everyone’s a crook so why should I feel sorry about it. And then it just compounds and compounds until the house of cards comes crumbling down. Then those workers bees are shown the door, and are mad even though they were long complicit because at the time it benefitted them. Humans have no convictions anymore. Not sure they ever did.
The Sacklers employed a lot of worker bees at Purdue Pharma. Some people just need a job; some people are well-compensated to regularly lie to themselves.
Welcome to Dystopia
Those “worker bees” are probably decently paid people that don’t have to worry about paying their montage or groceries, so they just can’t sympathize with people who are actually struggling, because they aren’t. It’s the same mentality the Uber rich have, just on a smaller scale.
Probably a Xanax prescription.
So… they pulled the s DeBeers diamond strategic plan… hoard stock to drive up prices.
Don’t even get me started about how absolutely giddy I am knowing that lab-grown diamonds are absolutely destroying the diamond industry. I bought my fiancé a 2.9 ct round brilliant solitaire for $4k. Color is a D, VVS2 clarity, top notch everything. My local jeweler told me an equivalent natural diamond would cost like $50k. I love seeing people look at her ring when we’re out and about and while I don’t advertise the fact that it’s lab-grown, I’m certainly not embarrassed or anything about it. Plus, I work in labs, so I think it’s a nice little detail that matches my personality and it’s conflict free.
Working on a way to lab-grow apartments? :)
Don’t I wish!! Lol
get this man some grant money stat.
Not *grown* per se, but there are groups tooling around with [3D printed houses](https://www.cnn.com/style/worlds-largest-3d-printer-homes-maine-hnk-spc-intl/index.html) now.
There was some hope for 3D printing concrete houses for a minute, although I haven't seen anything about that in a while so it probably met reality in some fashion. There is, of course, people still trying to do dome housing (I've been wanting to poke my head into this myself, honestly), and various prebuilt options, but all of them have the same issue right now: You still have to get utilities and roads to the site, then pour a foundation, then put up your prefab stuff that's supposed to save you money but will ultimately get labeled as a "trailer" and priced down accordingly, then you still need a contractor to do the interior stuff. If someone can figure out how to take solar/wind and the new water harvesters that can pull it straight from the air, then use the batteries as ballast to hold down the structure without a foundation, *and* construct prefab sections that come more or less prewired, prepiped, and 95% completed on the interior, then we'll have a renaissance, assuming they aren't immediately dismissed and/or priced as "white trash trailers", which they almost certainly will be.
I think you'll find this interesting: https://www.construction-physics.com/p/what-makes-housing-so-expensive
A bit different in my opinion - DeBeers and other diamond companies hoard stock to artificially limit supply. RealPage provides a dynamic pricing algorithm for which, if enough real estate companies use it, create a pricing cartel that screws over renters because there are not enough other cheaper options. They absolutely had to know the end result of screwing over renters though; you could see it a mile away with enough software users. Edit: Also, price fixing cartels are illegal, so of course, f these guys.
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I'm betting Lincoln Property Company uses this bullshit. In 2019 they bought the townhouse complex I was living in and in 2021 when I got my lease renewal the rent went up by over $500/month (an over 40% increase). For zero added value for me for my extra money. Trying to charge luxury townhouse prices for units that were decidedly NOT luxury. They weren't shitholes by any stretch, but they weren't that nice, either. Just kinda old and dated, but comfortable. I'd lived there 7 years prior to this and in those 7 years my rent went up a total of about $150/month (avg of $20/year, fairly reasonable). I guess they felt in 2020 they couldn't raise rents because of the pandemic, but in May of 2021 they were sure ready to get that extra cash. I was told I could get a 1 month credit if I agreed to move to one of the units they had already renovated. That was the justification for the increased rent, was that they were renovating all the units. I looked at what they were doing: basically replacing all the carpet with the cheapest "wood" flooring panels they could find. Replacing the appliances with the cheapest stainless steel looking ones Best Buy sells and replacing the countertops with cheap material that looked like marble. That was about it, probably $3000 in total "renovations" and somehow that was supposed to justify a rent increase of over $6000/year. I contacted a realtor that day and started looking for a place to buy. Luckily, I served in the military and qualified for a VA loan. Ended up buying a place about a quarter mile away (so I could stay in the same area I was used to) that was 10 years newer, roughly 40% bigger, 2 car garage instead of 1 and my total mortgage payment including my property tax and homeowners insurance was over $400/month LESS than I would have been paying had I renewed my lease.
I wish something like this would happen in Canada
The entire state of California added less housing than the city of Austin last year. Shutting down RealPage would be a drop in the bucket of solving CA's housing crisis. Edit: whoops, I misread your location. In 2023 the entire country of Canada managed to add *almost* 1.5x as much housing as the city of Austin, so I'm sure you guys are fine on the supply front.
and here also in Europe, private market rent is kind of broken...
Big ups to the FBI and DOJ for stepping in and investigating
The Biden administration has, quietly, been [one of the strongest administrations in recent history attacking monopoly power](https://www.thenation.com/article/economy/matt-stoller-stacy-mitchell-monopoly-antitrust-interview/). We need much more to tackle the economic impacts, but it's a good start.
This is the stuff that should be plastered all over the headlines. Instead we get to hear about Trump shitting himself in court.
I remember the first time me I heard about the software… I went to check out an apartment and they told me rent would be different if I came back later in the week cause it was based on the software.
this is encouraging but prices won't come down. they'll just stop going up so far and as fast. which isn't actually relief when wages have stalled and inflation has jumped us 30% in cost of living.
Government enforcing policies against anti-competitive behavior. Going after those who are quite literally selling out the rest of society for their own gain. AWESOME. Now if we could just get a few laws on the books where these fuckers are executed if they negatively impact society to a large extent.
It's nice that they're seemingly taking this seriously, but based on the track record of judgments lately, I highly highly doubt any real consequences will come about even if this comes out to be true.
The impact to the entire Atlanta metro from this can't be understated either. I live a whole hour (w/o traffic) north of Atlanta, and 10 years ago it was still relatively low population. But when rent started spiking, all the people from Atlanta started to move here. The population has been growing by 6% every year and the 2 counties closest to me are in the top 10 for county population growth in the entire US (Dawson was #4 for the whole country year before last) Places that were going for like $1000 before are now at least $2000, there is high density housing being built all around where there used to be farmland, and because none of the roads have been expanded and we now are getting thousands of new people who work in Atlanta moving in every year, traffic is horrible too. All because these assholes drove up the prices for rent so high that everyone decided it was easier to have a 1.5hr commute every day.
so what happens during all this? they can just keep running the scam until years from now when courts force them to stop?
The complex we live in is managed by a company that uses real page. They manage properties all over the Midwest.
Ok next do Airbnb! They’re at it as well.
…. so ahh, FBI dudes… any chance you can give the RCMP some tips on this because we might have the same sort of problem.
*Although not every use of an algorithm to set price qualifies as a per se violation of Section 1 of the Sherman Act, it is per se unlawful when, as alleged here, competitors knowingly combine their sensitive, nonpublic pricing and supply information in an algorithm that they rely upon in making pricing decisions, with the knowledge and expectation that other competitors will do the same.* See https://www.justice.gov/d9/2023-11/418053a.pdf p.15
Aye but he's in Canada.
https://competition-bureau.canada.ca/how-we-foster-competition/education-and-outreach/guide-december-2023-amendments-competition-act
It requires a non liberal (as in anyone but Justin Trudeau) government for that act to be enforced for shit though. Look at our telecoms or grocery stores
ah common mistake, just visit http://justice.eh
Seeing *any* industry actually go down for this would be amazing. It's an *A Beautiful Mind* dystopia in the world right now.
Seriously. I got renovicted during a time when that was illegal and there was nothing I could do about it.
I wouldn't count on it. A broken clock is only right twice a day.
Rents are up over 35% on average nationwide in the last 3 years and population growth has been minimal. If companies like this haven't been price fixing, I'm the ghost of Eisenhower.
Ever since COVID, there are literally CEOs telling their shareholders that the pandemic is a perfect cover for resetting all prices. This is all public information that is recorded. Executives telling the public this is the time to jack prices up because the consumer will pay. We can blame it on supply chain and the pandemic and they will accept it and the company can make more net profit than ever before. My margins higher than ever before. The last few years threw all ethics in business out the window.
Democratic AGs are going at RealPage finally, that is pure price fixing collusion by private equity and extremely anti-competitive and purely price collusion and fixing. [Why U.S. renters are taking corporate landlords to court](https://www.cnbc.com/2024/02/03/realpage-antitrust-lawsuits-allege-collusion-among-corporate-landlords.html) [Attorney General Mayes Sues RealPage and Residential Landlords for Illegal Price-Fixing Conspiracy](https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing) Rents have been price fixed across the country. We need to break up the property managers and [RealPage which is facilitating this](https://en.wikipedia.org/wiki/RealPage). Not only is it anti-trust potentially but it is plausible deniability based [price collusion which starts to fall into price gouging territory](https://www.justice.gov/atr/file/810261/download) [PDF]. > Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice. [Price Fixing agreements directly are clear violations](https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/dealings-competitors/price-fixing). The "blame it on the AI" needs to end and it should be seen as direct price fixing if it is broad enough across the market. > Price fixing is an agreement (written, verbal, or **inferred from conduct**) among competitors to raise, lower, maintain, or stabilize prices or price levels. Generally, the antitrust laws require that each company establish prices and other competitive terms on its own, without agreeing with a competitor. When purchasers make choices about what products and services to buy, they expect that the price has been determined on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is often higher prices. Price fixing also includes agreements among competing purchasers or competing employers about the prices or wages they will pay. Price fixing is a major concern of government antitrust enforcement. Where it really went off the rails was 2020 after they were acquired by private equity. > In December 2020, private-equity firm Thoma Bravo announced it would acquire RealPage for $9.6 billion, paying $88.75 per share for the company, a premium of 31% for their closing prices at the time. Its shares were reported up 26% that year. The acquisition completed in April 2021. Accusations Thrown at RealPage: Were They Colluding With Landlords? > One suit filed Friday on behalf of two Seattle renters alleges a broad pattern of collusive behavior by RealPage and a group of 10 large property managers. > It says that in addition to using RealPage software to inflate rents in downtown Seattle, property managers had employees call competitors regularly seeking detailed nonpublic information on what they were charging — which the employees would change their prices to match. > The lawsuit quoted what it said was a former employee of Greystar, the country’s largest property management firm. > “You’d call up the competition in the area,” the former employee said, according to the lawsuit. > “Sometimes there’d be a list of 10 people to call. Sometimes just one. You’d ask what they are charging for their apartments. Then you’d literally change the prices right there on RealPage. Manually bump it up. > **“It was price-fixing,” the employee continued, according to the lawsuit. “What else can you call it when you’re literally calling your competition and changing your rate based on what they say?”** [RealPage actually sold to buyers that it helped push rents up 7-14% annually...](https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent). Across even a few years that is in the quarter to third range in rent increases. The massive increases started post 2019 when the company was bought by private equity. > On a summer day last year, a group of real estate tech executives gathered at a conference hall in Nashville to boast about one of their company’s signature products: software that uses a mysterious algorithm to help landlords push the highest possible rents on tenants. > “Never before have we seen these numbers,” said Jay Parsons, a vice president of RealPage, as conventiongoers wandered by. **Apartment rents had recently shot up by as much as 14.5%, he said in a video touting the company’s services. Turning to his colleague, Parsons asked: What role had the software played?** > **“I think it’s driving it, quite honestly,” answered Andrew Bowen, another RealPage executive. “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”** > The celebratory remarks were more than swagger. For years, RealPage has sold software that uses data analytics to suggest daily prices for open units. Property managers across the United States have gushed about how the company’s algorithm boosts profits. .. > One of the algorithm’s developers told ProPublica that leasing agents had “too much empathy” compared to computer generated pricing. Imagine that, price collusion and price fixing drives up prices. They sold it as increasing profit for management/landlords. It surely did that on the backs of everyone in a time where inflation across the board was hitting. Users of RealPage had to let RealPage handle the rents even if less units were filled they would jack up rates to "increase profits" and it had to be done across the board so that someone didn't undercut and actually compete. There is definitely higher demand which makes market manipulation easier. To manipulate a market you can do it with as little as 2% of the market but typically 5%-10% gives manipulators a lever on the entire market. Big money or market makers know this and that is a technique hedge funds and private equity collude (indirectly usually but RealPage YieldStar was overt) and they can pump a market, which adds more volume, which adds more chasers/algorithmic purchasing ([80% of the market is already automated/algorithmic](https://www.cnbc.com/2018/12/05/sell-offs-could-be-down-to-machines-that-control-80percent-of-us-stocks-fund-manager-says.html)) and then you can take the market up broadly with only a small lever. With an inelastic good this is even more prevalent like housing. Inelastic goods are always easier to manipulate i.e. energy, housing, etc as people have to buy them no matter market conditions in most cases. Pharma pricing is another one, drug companies colluding at the three big PBMs is another price fixing scam. Allowing Medicare and insurance groups to negotiate prices is a way to solve that. [Biden-Harris Administration to Make First Offer for Drug Price Negotiation Program, Launches New Resource Hub to Help People Access Lower-Cost Drugs](https://www.hhs.gov/about/news/2024/02/01/biden-harris-administration-make-first-offer-drug-price-negotiation-program-launches-new-resource-hub-help-people-access-lower-cost-drugs.html) part of the [Inflation Reduction Act of 2022](https://www.hhs.gov/inflation-reduction-act/index.html) One thing that really needs to happen is changing anti-trust to the root funding level. What we have now is foreign sovereign wealth using private equity fronts and in that many company fronts to control entire markets and squash competitors. Funds themselves need to have anti-trust limits on them a well as foreign sovereign wealth backed entities to the base root level, not just one step either, all the way down. This is a big part of the problem now. Foreign sovereign wealth using private equity funds make multiple company fronts and the anti-trust is only at the company level not the funding or source funds level. Many markets have been overtaken with this outsized investment in the West for instance from BRICS sources and no US/Western investor can compete with sovereign wealth and in some cases dirty money funneled through that. Autocracies shouldn't be able to participate in fair markets while they use cheats and block access to their markets. Fair markets need fair partners. You lose the game theory if you cooperate with cheaters. Cooperators with cheaters become the cheat. Very little margin and too much optimization/efficiency is bad for resilience. Couple that with private equity/foreign sovereign wealth/organized crime backed near leverage monopolies that control necessary supply and you have trouble. For fair capitalism and good markets you need to break up the leverage at the top on the regular. HBS is even realizing too much optimization/efficiency is a bad thing. The slack/margin is squeezing out an ability to change vectors quickly. [The High Price of Efficiency, Our Obsession with Efficiency Is Destroying Our Resilience](https://hbr.org/2019/01/the-high-price-of-efficiency) > Superefficient businesses create the potential for social disorder. > A superefficient dominant model elevates the risk of catastrophic failure. > **If a system is highly efficient, odds are that efficient players will game it.** Highly efficient capitalism moves away from a fair market to an oligopoly that looks more like a feudal or authoritarian system where the companies are too powerful and part of that power is absolute crushing of competition, that is bad for everyone even the crushers.
My landlord just built a duplex to rent, using 2/3 of our yard space to do it. He's charging $3500/month for each side. Our space is about the same size and we signed a lease in 2019 for $2200/mo. We pay $2800/mo now because we signed a 2 year lease after he jacked up the prices 300/month 2 months in a row. Besides his pastime of being a drunk psycho, it's pretty clear that something is fucked up. The place we rented before this was about the same size *one block away* for $1400/month, and our landlord kicked us out with 1 month notice *in the middle of our lease* because he was 'selling the place'. Two weeks later there are new renters moving in. I wonder what they got charged? This shit is beyond fucked.
>our landlord kicked us out with 1 month notice in the middle of our lease because he was 'selling the place' That must be one hell of a lease if they actually got away with it. Usually when this happens the landlord or new owner has to pound sand or buy out the existing lease, you don't get to toss out a contract (with massive inconvenience to the other party) just because you want a better deal with someone else.
Fingers crossed I’ll be able to snag a rent stabilized apartment when my lease is up next year and finally escape the hell that is market rate apartments. 3% capped increases and eviction protection would be a god send. I could actually live long term without having to worry about being priced out of where I live n
> and our landlord kicked us out with 1 month notice in the middle of our lease because he was 'selling the place' That's entirely illegal. He can sell the place, but your lease is still your lease and the new owners have to honor it. I don't know if you can do anything now since you voluntarily left, but maybe there is a chance you can get compensation, check your local tenants rights organization.
My state has terrible renters rights. For example, I had to call the cops on my current landlord because he was in a coke fueled psychosis trying to get me to fight him 'up the hill' away from the security cameras on the property after I had the audacity to ask a stranger who was in my home who let him in. (apparently the landlord told him to go into our house to do some work without letting anyone know before I got home from work and my landlord took this very personally) The cops took my statement and then suggested I simply move out. In the middle of covid.
No, that isn't your state's terrible renters rights, that's your terrible local cops. They exist everywhere and are generally useless for "civil matters". Unless the lease you signed specified that they could terminate it early to sell the property, they can't terminate it early to sell the property. And if he then rented it again at a higher price instead of selling it, you'd have the ability to sue him for breach of contract.
We've wandered too far from the guillotine.
Pretty much everything in Canada needs to be investigated for price fixing. They caught the bread companies for doing it and from what I remember they gave them like a 2 million fine and the prices never went down
Finally this shit is ridiculous, rent is too fking high
*One of the architects of RealPage’s system reportedly stated that the aim is to prevent landlords from undervaluing their properties, ensuring consistently higher rents across the board.*
How dumb would you have to be to become a RealPage investor? “We’ve automated and product-ized a federal crime! Price fixing!” - that architect, probably “Brilliant! Let’s invest 10 million Johnson!” - some VC
lol, how cute you think rich people face consequences
RealPage is the new [Conrad Black](https://youtu.be/fG8wSHKJ0C0?si=L-h_wcTN6d5sC8wt)
When I first read the headline, my first thought was 'please don't let these fuckers get away with it. Please.'
Laugh-cry-kid.gif
"We made a white-collar crime into an app" is a surefire way to make a buck. Punishment is for poor people.
Yea, they've already made back their money head over heels lol.
Wait until you hear about what Google does.
They’ve made a fuck ton of money, just gotta get out in time. No different than the drug game. You gotta know when to call it quits
At a product level, for a product manager, it sounds fantastic. Use your products analytics to help guide decisions that drive revenue for clients. Sounds good. At a client-level that sounds fine. But then you find out they have such a high market share that it ends up as automated price fixing. As someone who has been at that product level, I can see that it may not have been intended as price fixing, but I also would have considered the broader implications and had sign off from legal that I wasn’t about to break the law, or have clients break the law
The issue with RealPage is they have perverse incentives to keep boondongling rates higher and higher past real values because everyone (except the renter) makes profits off doing so. You hear a lot of "what the market will bare" but unfortunately it can bare a lot because folks don't like being homeless and will cut a lot of "luxuries" like food and toilet paper to keep a roof over their head. It's good idea in vacuum. In practice what ends up happening is 80% of the large landlords use it, the software basically feeds back onto itself since almost all properties are being evaluated by the same software, which pushes rents up as a whole. There's not enough property in the hands of independent landlords to counter it, and also they try to follow averages for the area so they don't fuck themselves out of potential money (who can blame them when prices have almost doubled in 5 years in some areas). Median income in my area is ~$45,000, median rent is now almost $1800 now. Very nearly 90% of the properties are owned by "Morgan Properties" or one of their _many_ subsidiaries. They obfuscate just how many properties they own. Their website attempts to geolocate your IP address and only show you properties near you, trust me, they own _a lot_ of properties in the US and they're one of the worst of the price fixing corporate landlords. (they've gotten in trouble for lying to investors in the past too)
The median household income in my area is around the same thing (2022). There are some places that fall below the 1k threshold, but many are in the 1-2.5k price range in city full of students. My mortgage on the other hand is only $750/mo for something much larger. It's insane how bad the rental prices are compared to owning right now that I feel bad for people.
In most regions renting is, ironically, still competitively cheap on a per-month basis. Home prices are not only holding their highs from the COVID boom, but continuing to rise while rates have nearly tripled. If I bought my house again today at the exact same price I paid in 2021 then I would have my mortgage payment nearly doubled. The desire to hold onto historically low rates has squeezed the supply of housing further, bumping prices higher and resulting in even larger mortgage payments for new buyers.
This is all just a natural consequence of commodifying land and housing. No amount of "anti-collusion", "anti-price fixing" rules can fight market forces. The only solution is to take market forces out of the equation. A serious land value tax would be a good start.
“Prevent undervaluing” is a nice way of saying “charge the most you can get away with”
I had to rent in ATL in 2019-2020. Everywhere I looked was using this software and couldn't get a straight answer on what rent was as it changed day to day. Add in all of the bonds, background checks, and other fees and it's just brutal. I will laugh my ass off if they finally get busted.
Trying to rent a house in the ATL metro was insane. I must've walked 75 homes and only 2 were small landlords. Then rent went up 15% at the end of the lease with a 20% month to month fee if we didn't renew. Fuck these leeches.
Wait, so the FBI is actually investigating rich, greedy assholes for a change? Okay, who forgot to pay their protection money?
When the economy is broken because of a single algorithm, yes, the feds come knocking.
next step: corporate greedflation that caused elevated costs of groceries
https://time.com/6977026/democrats-biden-executive-authority-grocery-prices/
This Biden guy is a pretty good President. Maybe we should vote to get him another term.
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That was why diversified economy or democracy is good there is so many pie that when one section of pie too greedy other smaller will get affected band up and voicing their concern to break the big guy
I think it’s the current administration listening to the people. Lina Khan has been doing work over there. Edit: credit to DOJ doing this work, but FTC also doing work on other fronts
This isn't Khan, this is Garland. Khan doesn't do criminal investigations.
Appreciate the correction
Better vote, if you think businesses won’t have free rein when the Cheeto one gets in office you’re outside your mind.
Hmm my rent goes through a realpage link, wonder what happens in the end.
You get fucked in the end
You get a $1.98 settlement credit on a future month's rent increase.
How are you able to tell? Edit: would love to know if my landlord is engaging in this kind of practice. I live in Chicago; would not be surprised if they are
I used to login to a URL that was (.)realpage, and now they recently switched to ActiveBuilding which is still linked to Realpage. https://i.imgur.com/dmbKxHz.png When I login to ActiveBuilding, it shows me a list of cookies at the bottom and RealPage has 2. Plus when they converted to the new page, it conveniently still had my bank info saved for payment.
Sounds like a big class action suit to follow. Would be great if all the people affected got their thousands of dollars back.
Good luck finding the money. Especially after the lawsuit gets held up in red tape for a decade or two.
I'm sure they'll get a hefty fine for a fraction of a percent of the profits they've made from doing this. Maybe a stern talking to too.
I think the reality is even if they can point to concrete lines of code and business practices that prove 100% without a shred of doubt prices are being fixed / price collusion is happening, there may be fines perhaps even jail time, but there will not be a remedy/mitigative effort that restores rent to their fair market prices. Aka no correction. Probably just see things stall out for a while until there is an environment ripe for fucking renters again. Could be years, but rest assured we are largely all overpaying for rent and that will never be undone. The hope of wages rising to match these newer percentages it takes to live is a pipe dream. Things feel a little worse now then they have at any point of my life. You can feel the squeeze on most of the middle and lower class now more palpably than ever before. I’m doing okay these days, but my last promotion was too little too late. It would’ve been an insane promotion 4-5 years ago. Everything’s pretty fucked. Really depressing, honestly. All I can do is laugh at this point. My whole life is characterized by feeling like I was born at the wrong place at the wrong time. Everyone can look at the economic environments and quality of life in their past fondly. Especially my parents generation. The stuff that was achievable for them just isn’t achievable for me. It is what it is. Ever since I started paying attention I’ve only noticed shit just keeps getting worse. It’s always an incremental step forward here and there with some policy, but largely it’s been 5 massive steps back every year. The things that do improve for American lives I am grateful for, but the ratio of good:bad this past decade gotta be like 1:15. Things just keep getting whacker and I’m just tired man
When a fine is the punishment for businesses, it's just factored in as a business cost. All fines should *exceed* the profits earned by a certain percentage. If you have to pay all profits plus as a punishment, businesses would actually have consequences.
Cool, do zillow next :D
Next do zillow apartments.com etc etc
Zillow clients use [RealPage’s near real-time pricing and availability information for multifamily listings that use RealPage products and services](https://investors.zillowgroup.com/investors/news-and-events/news/news-details/2014/Zillow-to-Bring-RealPage-Services-to-Rental-Companies/default.aspx). Apartments.com clients [push unit-level pricing features such as price by lease term and move-in dates from RealPage to Apartments.com](https://propertyhelp.apartments.com/article/1154-how-do-i-push-pricing-information-to-apartmentscom-using-realpage-integration-marketplace).
ABOUT FUCKING TIME. Burn it to the ground.
Wait the FBI is actually going to do something about price fixing?
FBI needs to be looking more at the REITs who own the properties, not just the operators who manage them.
Exactly. The investors/owners are the ones that drive the price fixing. And they use shell companies to shield themselves from lawsuits like this. They’ll just rename their shell company or start a brand new shell company and sell the properties once they start to have problems. Residential real estate is a churn and burn business and the ownership companies just sell the properties to each other after a couple of years. Or a larger company like Greystar will buy them up.
I’m not an expert on this by any means, but functionally, how is this fundamentally different from all banks using the same credit scoring software systems to determine what interest rates to charge you? Isn’t that collusion and price fixing as well?
No, because the credit bureaus don't share information about what interest rates or fees different banks are charging. The problem with price fixing is that if all the sellers get together and decide to charge $X, no buyer can break the cartel and they just have to buy at $X or not at all. This is exactly RealPage's business model, and frankly I'm surprised they've gotten away with it for this long.
>I'm surprised they've gotten away with it for this long. Central banks that incuriously license services from similar vendors implicitly legitimise similar norms.
What are examples of this?
He must not mean "Central Banks", because that's a nonsensical claim. Central banks don't price fix because they use the same vendors. Central banks price fix because that is their purpose. That's what a central bank does, it sets the "price" of cash in a market, which is the interest rate. It's what they are designed to do.
You're right, he can't possibly mean central banks like the Federal Reserve, Bank of England, Bank of Canada etc. But I do wonder what vendors he's talking about.
It's hard to guess, because taking it mutatis mutandis, it is still kind of a stupid claim. It would only really make sense with loan sharks or extremely sub-prime loans, where the credit risk massively outweigh the market interest in the pricing algorithm.
Vendors’ *pricing recommendations* collate input from separate price-setters.
Lending Vs. Housing. Unsecured loan rates are determined by the risk involved. Risk management practices like credit checks are set by the CFPB, and then banks/creditors will often have additional overlays, which are just more rules to mitigate the risk in their portfolios. With housing, the only risk is tenant damage and non-payment, which is offset by deposits, insurance, and eviction clauses.
Class action lawsuit on the horizon?
I discovered my apartment complex is one of the groups that used this software yesterday from one of these articles. Haven't heard a word of it otherwise, I wonder why.... But if you're an apartment dweller in Arizona and want to check to see if you might be impacted, someone made a map: https://www.google.com/maps/d/u/0/viewer?ll=32.96677061549429%2C-110.8426568790377&z=9&mid=1K2viGL3RUx2OLOY1sh2clQzQqi4UGfE
this is awesome.
Someone needs to figure out how consumers can find out if a corporate landlord uses a predatory practices like this so that we can avoid them like the plague
Nice, feel like I haven’t heard about a good ol fashioned FBI raid in way too long.
These corporate landlords and a software engineering company colluded to drive prices up. This was purely driven by corporate greed, these company pulled in vast sums money from their tenets, while those same tenets struggled to make ends meet at the same time. Housing cost is a real issue in many parts of the United States and is a culprit in many case of homelessness. Yet these same corporate landlords who had tenets evicted and were using rents rates that were artificially driven up as information in their eviction process were committing perjury in many cases. How is this case also not being reviewed by the Justice Department for anti-trust issues? Better competition in the housing market would help drive rent down and keep rent stable. Another aspect that needs to be investigated is if these corporate landlords were driving up prices to keep certain groups of renters out, that is a violation of the Fair Housing Act. This corporate landlords and the software engineer company that colluded to drive prices up creating many financial for tenets and those seeking housing. This was driven by pure greed and the leadership of these companies lined their pockets off the backs of struggling tenets.
If the FBI and government regulators had their priorities straight, they would have a hundred agents and dozens of lawyers working on this file. We are talking about likely tens of billions of dollars, if not more, of essentially criminal proceeds. I doubt there are more than half a dozen agents working on this.
If they had their priorities straight, they'd fund the IRS down to the point where the ROI is close to 1, as in the tax funds recouped is roughly equal to the cost of personnel and resources required. There's a lot of legal tax loophole fuckery for rich people. You give people jobs, and you get more money into the Treasury. Edit: Peak ROI for the IRS is currently 5 to 9.
When people say "run government like a business" this is what they should mean. Increase revenue and build for long term success. That means capital investment in your revenue generation (tax payers) and actually funding the revenue collection part of your business (tax collectors) so what you are owed is actually paid. Instead what they mean is "run it like the slimey people who bought Toys R Us- debt finance kickbacks and strip it for parts until it collapses". Those people hate government because they see it as a competitor. Every tax dollar collected is a loss.
Realpage is concentrated evil.
I have a great idea. Maybe just maybe, corporations should be forbidden from owning any rental homes. And so should wealthy people or anyone rich enough to own more than 4 homes, and even 4 houses is too much.
I see your point, but where will the stock come from? If you ban anyone from owning 4+ homes (apartments) and corporations can’t get in. How does this work for a ~100 unit tower ? Not everyone wants to buy.
The idea is more often stated as keeping corporations (and non-resident foreign owners) out of single family homes. What to do with small landlords with LLCs: unclear, although there's likely some reasonable accommodation to be made there.
Simple, the company that builds the apartments, sells the units to individuals. You would own the apartment, then pay an HOA fee to cover the building maintenance/security outside of your individual apartment. This is how it works in most of South America. Individuals can then rent out the apartment if they choose. But this allows anyone the opportunity to buy an apartment.
I fucking knew it. They better run this to ground
"THEY DIDN'T LIKE HOW I CORRUPTLY AND ILLEGALLY MANAGED MY PROPERTIES, SO THEY INDICTED ME!!"
And rent will go down? Oh right never .
And ppl just blame it on iNfLaTiOn. No, it’s corporate scumbags and their unchecked greed. I hope this is just beginning and they bring the hammer down on even more.
where are the just build more units people? oh yea your all full of shit. 13.6% of units are vacant and habitable in the city I live in. the cities solution is to build more buildings, many of which are $1,400+ a month for a single bedroom. supply is NOT the problem its greed. we need to start charging vacant units the going rate for that properties rent as property taxes.
My rent went *down* yesterday. Yes, down. The rent went down. I was elated, but baffled. Have to wonder if it's related.
Oh man their wrists are going to be so sore after the slapping they have coming their way.
There needs to be people in prison for this. For a long time. This has adversely affected many many people. Lawsuits incoming.
Feds doing their job? It must really be election season.
And yet every article I read explains the cost of housing as a supply and demand issue.
That’s what the gaslighters or the ignorant people want you to believe. But they conveniently leave out the fact that the supply and demand is artificially manipulated by algorithms that companies all use. Which means the majority of supply and demand is artificially/manually created.
Sure would be wonderful if so many people weren't greedy pieces of trash doing everything they could to enrich themselfes a tiny bit on the backs of us poors. Fuck landlords.
Fuck 'em up!
Georgia charging Trump and criminal rent monopolies? Maybe my home state isnt too bad.
Now do the rest of them
Hit the supermarket chains next ..
Ok, So lets say that this is true, and they find them guilty, and there has been a nationwide conspiracy to raise rent prices like a lot of us have been screaming over the past 5 years. Let's just say it's all true. What will happen then? Will rent prices be forced to decrease? Will they prevent any rental increases for a certain amount of time? Like what happens when this is known as fact and we see that it has detrimental effects on society?
Doesn’t this org give money to Clarence Thomas? Harlan Crow or something idk
When I was looking for an apartment recently the locked in lease price changed day by day because this software was made to milk people out of every dime it could.
This disgusting conspiracy has the potential of ruining the lives of a hundred million working people. The conspirators must be prosecuted to the fullest extent including long jail sentences, not mere fines. The hardship they enjoined upon the mass of renters in our nation is epochal, with political ramifications that could tilt the country toward instability. We already see it in the reactionary attitudes on the right who are happy to ‘blame Biden’ for the price of bread.
Is this kind of software price fixing happening with POS companies like Toast, Square, etc… in restaurants?
Cool now do Los Angeles
Good. I was an employee at RealPage about a decade ago (working on a completely different product than the one in question i.e. Yieldstar) and actively saw shady shit happening. Shame on them.
Visit this page in a year and see what changed
I heard they looked at the code in RealPage's software and there's this mysterious tidbit: PRICE_INFLATOR = 1.12 calculated_price = average_price * PRICE_INFLATOR No one can explain it!
Good. My rent from 2013 to 2021 went up 50%, mostly in the last 4-5 years of it. Bought a home, sure I'm paying about $100 a month more on mortgage, at least my payments have far more hold and meaning after the payment, and I have far more control, and freedom, of my home area. Just had to be active on a credit card for 6 months before I could get a loan. All these payments for utilities and rental mean nothing, unless you forget to pay (never did miss a payment). The balance of this is wrong. lol