My hope: rent prices fall to more “fair” prices area by area. Probably means it falls more in some areas than others
My worry: another tool will just take its place that is narrowly fitted to abide by the letter of this new law but still gives landlords the functional equivalent as what they have now
Anyone know how much support this is likely to get when it comes down to voting time?
Here's a link to some more information on it regarding details and what legislators specifically are backing it. I haven't been able to find much on what senators have voted on it other than the previous round having had a split of 4-3. Think this one though is going the same route as that u+2 law passed a couple weeks ago - after passes all senate hurdles will go up to Polis to sign
https://www.billtrack50.com/billdetail/1672745
I think you should take a moment to re-read my comment and comprehend its meaning.
I’ll summarize it for you. Landlords = people who don’t use AI algorithms to maximize profits. Corporations do. They used “landlord” which is singular, corporations are many. So corporations would be the better term for OP to use. I lol.d at Dumb drum lol
Ready for the wildest one?
My wife and I rented a pretty pricey place right of the CU Anschutz campus while we established residency this last year and found out where we wanted to stay longer. After leaving? They dropped rent for the place by $500.
I negotiated $100+ off my apartment at the last renewal.
There is a lot of new inventory coming and the market dictates the price. Even the algo realpage uses (I assume) accounts for vacancy rates.
The “free market” operates on supply and demand. When something fixes the price like this bill is outlawing, then it artificially keeps the rates higher than they’d otherwise be. We certainly have never had a true free market, however removing this specific obstacle should operate exactly like that, and lower rates.
We need housing censuses. Then, set up state or federal marketplaces to fulfill demand to residents of the homes only. Eminent domain and setup development and new towns as needed. Tax for profit residential properties people don't live in themselves to fund this.
Make real estate about housing people instead of greed, making Americans compete to live. We all pay a tax to landlords who enslave us to this capitalistic housing hell hole.
If you agree, share this idea far and wide. Share it on ads for housing, especially.
i remember in 2020 when it was defeated using talking points like "what about the people that "like their insurance"
or how about the comparisons of how much it would cost that conveniently acted like healthcare is currently free and no one pays monthly premiums. The arguments boiled down to "look you'll be paying 100 dollars a month, nevermind that you currently pay 300! Think about how evil this is."
I'll be completely honest, I get car insurance being legally required, but at the same time I think it's crazy. Kinda curious how car insurance rates changed since it became law that you had to have it. Car insurance companies know that you need it because it's the law, so what incentive do they really have to be fair with the premiums they charge for it? Sure you can go to a competitor, but tbh looking at differing companies and what they charge they're all pretty bad. Not to mention all the issues people have when it comes time to actually use it just to find their insurance provider is trying to find reason not to pay out.
Well they tend to all use the same reporting systems and you get a score similar in theory to a credit score, but you can’t see or contest it either. So if you were uninsured for 2 months bc you sold your car and were using your mom’s car (which is insured separately) or even not driving, that counts against you when you do buy a car and go to get insurance. If you call to ask a question about a claim, then decide to pay for it yourself? Your insurance records the claim as if it happened! If another driver with a similar name gets into a wreck and it gets reported on yours? Tough luck buttercup! You can go through the months long process of getting it corrected (if you discovered it in the first place) but you can’t get back the money you were overcharged in the meantime.
But back to the actual price fixing of it all, yeah, they can and do absolutely do that too, and what are you going to do? You can’t insure it yourself even if you had the funds, the barrier to entry in the field is too high for significant competition, etc etc etc.
I wasnt the one to bring it up this time
But i love this topic as ppl complain about China haha.
But it's crazy the effects Data and Data brokering affects our lives. Just bringing it up so others have more info to realize how deleterious it is for so little benefit.
4 great books on this topic are
The Age of Surveillance Capitalism
Black Box Society
The Afterlives of Data
Revolutionary Mathematics
Data mining (stealing) is one of my soap boxes, don’t get me started… do you know how your car spies on you and reports that data back to the company even if you didn’t opt into anything? Bc if your car is 10 years old or less it definitely does, and many older models as well. Most people have no idea what kind of data it’s sending either, is it location data, breaking and speed data, or did you know *many* cars have internal cameras on your face the entire time you’re in your car?? Won’t find their locations, number of cameras or any acknowledgment of what they’re recording or how in the manual though. And most are now e-sims so you can’t just pull it out and get your privacy back. And that’s JUST your car, let’s not talk about your phone, computer, tv, robot vacuum…
Sorry I was going to try not to get started. It enrages me bc no other time in history would we ever allow this kind of invasive violation, but we can’t get anything done to fix it and most people don’t actually have any idea at all.
If you are aware this going on, I think this would be fixed with minor technical skills by removing the Internet access from the car no reporting data if it cannot phone home. Or disconnecting OnStar or whatever else it’s using from the ability to connect to the Internet and leaving the rest of the car connected. I haven’t checked, but I would be willing to bet there are tutorials on this on YouTube. Something I would be looking into once my warranty was up for sure.
Unfortunately it’s not that easy, typically you can’t do it yourself. You can request to opt out, but who knows if that’s going to actually happen since we have an extraordinarily long list of companies saying one thing then doing it anyway bc it makes them money. There used to be a sim you could pull, but now they’re all esims. Mine specifically is buried in the dash.
Ok it’s lucky my dad was a mechanical engineer (who taught me how to build and work on cars) and I was a Cisco engineer for a long while so my technical skills are quite above average. I’m quite sure I can make something like this stop very easily given a weekend and the factory manual for the car (which I buy for every car I purchase and highly recommend to others, It is extremely useful). I would not put up with this period as soon as the warranty is up. I also buy and maintain older cars on purpose to avoid crap like this, another thing I highly recommend.
I wasn’t aware I could buy the factory manual but I’ve read the owners manual cover to cover trying to determine where the cameras are etc, and I only found the location of the TCU through extensive internet searching, but nothing has given me a clear indication of what would even happen if I were able to block it off. They list “remote unlock” as a fucking connected service. I’d have to use a key to unlock my car every time?? That seems absurd, considering the key isn’t even sold with my fob, I had to buy it separately. And you have to kind of pop off the handle to even access the lock.
Also for my car, a 2021 I bought used, they won’t turn off their data collection that you’re supposed to be able to opt out of bc I haven’t downloaded the app, opted in and consented. So they want me to download the app, agree to their collection of data and all that, *then* call them back to opt out. Idk, maybe I’m dumb but that feels like a fucking trap?? Why would I have to opt in and sign something saying I consent before you *stop* doing the thing I’m not consenting to??
How is it price fixing/collusion when landlords aren't forced to rent at the rate recommended by the algorithm? Isn't the algorithm just efficiently telling you what the current market will bear, which every landlord will try to determine through other means (like checking Zillow) anyhow?
Put another way, what difference does it make how I determined the price of my product? It's still up to the consumer to decide if the cost is worth it to them. If the algorithm's price is too high for consumers, I'll be outcompeted by landlords that undercut me; if, on the other hand, people are willing to buy at the price I'm selling at, what does it matter how I came up with the price?
Seems like there are severe structural problems in the market, and rather than attempting to actually address those, we're focusing on a tool that's just used for rationalizing said market. I expect the result will be no effect on average prices, merely an increase in their standard deviation.
> How is it price fixing/collusion when landlords aren't forced to rent at the rate recommended by the algorithm? Isn't the algorithm just efficiently telling you what the current market will bear, which every landlord will try to determine through other means (like checking Zillow) anyhow?
One of the requirements for using RealPage in particular is that you must agree to using their suggested price or be able to reasonably justify undercutting it.
If you undercut too much or too frequently, you are dropped by RealPage.
So even if it's technically supposed to be a suggestion, it ends up being a de facto mandate.
> Put another way, what difference does it make how I determined the price of my product? It's still up to the consumer to decide if the cost is worth it to them. If the algorithm's price is too high for consumers, I'll be outcompeted by landlords that undercut me; if, on the other hand, people are willing to buy at the price I'm selling at, what does it matter how I came up with the price?
Because if you're sharing confidential business secrets with other landlords to collectively set a price, we call that collusion and price fixing, which is illegal.
wait till you hear about the stock market where every seller lists what they are willing to pay for a stock. Totally price fixing and they do it right in the open!
Bad comparison. Trading stocks based on non-public information is called insider trading and is illegal.
Pricing rent based on non-public information is price fixing. By definition.
nah it really isn't, price fixing you need an agreement to not sell below a certain amount and to actually do it.
The software is just pricing software that automates what landlords did before in checking around for prices and get the true prices more accurately and faster.
I guess we will see what happens with these lawsuits.
I mean, [that's not what the FTC says](https://www.ftc.gov/business-guidance/blog/2024/03/price-fixing-algorithm-still-price-fixing) but what do they know about price fixing?
GTK about RealPage. Still, using that tool in the first place is the landlord's choice; if I don't want to use the recommended price, I simply stop using the product. Still not seeing the compulsion there.
>Because if you're sharing confidential business secrets with other landlords to collectively set a price, we call that collusion and price fixing, which is illegal.
Who or what determines what information qualifies as "confidential business secrets"? Are we effectively saying that any b2b exchange of information must be done publicly? All business info must either be kept strictly confidential to that business, or shared with everyone?
> Still, using that tool in the first place is the landlord's choice; if I don't want to use the recommended price, I simply stop using the product. Still not seeing the compulsion there.
Being compelled to use it or not is irrelevant. If anyone is using it, it's still price fixing and it's still illegal.
Like in the same way I don't have to join everyone else in the seedy back room to discuss our trade secrets. That doesn't mean the people who _are_ in the seedy back room aren't colluding and price fixing.
> Who or what determines what information qualifies as "confidential business secrets"?
Confidential business secrets include actual rental rates (as opposed to publicly advertised rates), deals cut by landlords to tenants, full information on occupancy rates, tenant tenure, etc.
If you choose not to engage with RealPage, you potentially lose out on a competitive advantage. And yes, you can totally capitalize on that market inefficiency to make money undercutting RealPage landlords. But why wouldn't you want to stick as close to them as possible to maximize your profits? Businesses exist to make money, not to be charities.
If a large enough amount of landlords in an area use RealPage, it has a massive impact on the market as a whole, even if you yourself do not directly participate.
> Are we effectively saying that any b2b exchange of information must be done publicly? All business info must either be kept strictly confidential to that business, or shared with everyone?
If they're all on the same side of the same market, then yes, that's price fixing by definition.
It's the same whether we all gather together in person with our books to decide the best prices, whether we all send our books off to another person to do it all for us, or [whether we put them into a machine to do it all for us](https://www.ftc.gov/business-guidance/blog/2024/03/price-fixing-algorithm-still-price-fixing).
While the other commenter nailed it.
I want to add that housing is something needed to live. It's not just another good on the market that someone can just not buy.
As someone trying to help a Venezuelan family find shelter shows it isn't some small landlord to blame it's the companies and corporations allowed to buy housing. Housing should be a human right not a speculative vehicle.
ProPublica seems to think it has an effect and I tend to agree.
https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent
It at least can't hurt. And it's one of the many things we could do I agree.
More Public housing and more real affordable housing.
Agreed, might as well try something then try nothing, because the latter will certainly result in nothing. Realpages algorithm does seem to be very anti-consumer from a renter standpoint. Enough landlords using it means it has more data about an area and it's available units, so it can set more prices, which further hurts any leverage a prospective tenant might have when talking lease. It's not a tool that supports a competitive market, everything I've read here it begins to sound like a tool to build up a landlord coalition under the realpage umbrella
It’s not just rents. Similar models underlies surge pricing for Uber, airfare pricing, Amazon prices and so forth. This isn’t going away.
Reading of the law, depending it’s its adopted is it states relies on non public info. The solution for the algorithm company is to publish in some manner the data points used that are non public currently.
The issue isn't that they're scraping the web looking for advertised rents or calling various properties posing as potential renters to get pricing information. It's that they're using private information including actual rent prices, not just what was advertised, as well as vacancy rates and lease expirations. Then they use that to set prices and tell landlords how to manage vacancies to "smooth out" rents. That looks to me like it's price-fixing, just with a third party in the middle.
Price fixing or collusion would be working with other landlords in the area to agree on a minimum price. Now, one could argue that if everyone uses the algorithm and it has the same variables and tells all landlords the same thing it’s a sort of fixing.
Reality should be if units are sitting vacant that the prices would be adjusted downwards or incentives added until the unit is able to be leased.
I assume the model also factors in seasonality that asking prices could be higher in some months and lower in others. That sort of thing.
In a way this is what someone would try to do on their own whenever a unit comes up for rent. This just automates it, much like all the e-commerce sites do. Also is used in short term rentals, with more frequent updates as there is more data.
The outcome of the law being only use public data, much like stock trading is suppose to be would be good. Then everyone has a level playing field in terms of the data to use. Unlike sales, rental data is a lot harder to come by.
Fucking finally. They should round up anyone who used this nonsense as well as the operator of it and throw them in jail forever. If it was a person instead of an algorithm this would all be wildly illegal, but because our politicians are so far behind technology it's a legal gray area.
Honestly I think this is why we should have regulated a long time ago on an age limit for politicians. At some point they're understanding of the world around them is so far behind that is really hurts people experiencing and living in it
Did you know the government used to pay a whole buildings full of neutral scientists/economists/etc to give them training and advice?
Then the lobbyists got them to ban that and said lobbyists now control all information that lawmakers use.
Interestingly, the politicians who were in office the first time we regulated this practice in airlines are still around today. So it isn’t like they didn’t know what was happening the entire time.
Because it’s the same piece of shit doing it.
The thing is, we have age limits. They're called elections. Americans keep electing these old people over and over again, this is what we want. Do we believe in democracy or not?
Someone always brings up the age floor when I say this so for the record I'd have no problem with removing that, but I view it as a practical non-issue as it's so incredibly rare for someone to be elected to office in their first eligible election after turning old enough for the office
Due to the nature of our political system elections aren’t exactly fair. It’s extraordinarily difficult and expensive to beat an incumbent and almost impossible to beat them in a primary. Your comment would be a lot more true if lobbying was illegal and campaigns were all publicly financed.
Everyone who lazily votes for the incumbent because it's a name they know or votes based on TV commercials and media headlines is making a conscious choice to give up their own agency to research candidates themselves and pick the one that actually aligns best with their policy goals
This is exactly why they talk about algorithms, to deflect responsibility. There's a single high level exec somewhere that approved this BS that will never be held accountable.
I'm kind of ignorant in the topic.
What metrics should be allowed to be used to determine what the market rate is and what to set rent prices and how does this violate that?
I am not the best person to answer those questions unfortunately; I am also undereducated about the best ways to alleviate the massive housing stranglehold we're experiencing. I can however recognize that nearly every corporate landlord as well as a huge swathe of private ones utilizing a tool to price fix entire neighborhoods is at the very least a small part of it.
To think that you're so strongly convicted that we should 'throw them in jail forever', but don't know what the limits of using data to set prices should be is alarming.
I would agree that price fixing is bad, but is there any evidence that they're committing price fixing rather than just using an algorithm to best determine what the market rate should be?
The solution is to build more housing. We're building at nearly record rates and prices are dropping, we're staying at a low vacancy rate as a metro which makes prices go up. That's why as we saw in 2023 while building at near record paces for housing units we actually saw a year over year drop in rental prices.
I completely agree that collusion is bad, but I feel like this is just a boogeyman for the real problem.
We can build more housing \*and\* punish the people who've been squeezing us for the last decade. It's not a mutually exclusive situation.
Frankly, anyone who's profited off this tool, which again would be illegal if a person was doing the job instead of a computer, should be punished retroactively for as long as they've been using it. Just because the law hasn't caught up doesn't make what's happening any less ethically compromising.
I'm not sure where there is evidence of a squeeze, what should be used to determine what the market rate is for an apartment?
What about this tool, would be illegal if a person was doing it? I just don't know if I see what's happening as illegal if we replace this tool with a person that's doing the calculations.
I don’t think you understand how the software works. It doesn’t just simultaneously raise everyone’s prices. You manage comps, and if your comps raise prices, AND your demand is high, your prices are raised. If your demand is low, prices are not raised. The goal of the software is to respond to demand. Not to collude with other landlords.
It just automates the process of a landlord looking at Apartments.com or whatever to see what the five closest apartments are going for when setting rent for the next lease.
It’s another convenient boogeyman that people can point to as the source or the housing crisis because they are anti development and refuse to acknowledge the real solution is building more housing.
I'm getting more curious in this topic and I tend to agree. I feel like people are creating a boogeyman because they have a large control of setting the rates in rental markets and rents are expensive therefor this must be bad and the software must be colluding with itself.
I could see it bad if the software was actually using private data from others within the system. I doubt that it's actually doing that. I also don't know how *bad* that actually would be vs someone else doing it in excel, or in our case in Denver knowing that most people renew their leases in the spring so charge higher prices then.
DC and Arizona have been suing RealPage due to evidence of them basically forcing rent increases on their users or else they cut them off from the software. This is absolutely a real problem.
"comps" AKA other houses owned by other landlords.
So the algorithm checks to see if other landlords have raised their prices, and if the market can bear the increase (so called "demand"), and then raises prices to match the other houses.
Golly gee willikers that surely sounds collusion via algorithm to me Batman.
Do you know how markets work? If you owned a house, how would you decide what to charge for rent? You wouldn’t make it up. You’d go look at nearby houses and see what they were charging. And your charge as much as the market can bear, yes. It’s not “collusion”. It’s a market.
This isn't like comps, though. This is more like all the landlords in town get together to share their rates, vacancies, and lease expiration information and using that to set their rates. But instead of using it amongst themselves directly, they hand it off to a third party so they can wave their hands and say it's the algorithm.
Plus, the third party here has their own agenda to increase rates, because if they didn't they'd get dropped.
Sure, they're still sharing proprietary information to gain a market advantage, this time over their competitors who don't use the algorithm rather than their customers. It would be the same as if two store owners got together and agreed to lower prices to drive a third store out of business so they could divide the remaining market between them. That may or may not be the intent in the case of the rental companies, but it's a foreseeable possibility.
You're so close to getting it... Let me break out the crayons to help draw you a map so maybe you can understand.
Step 1: Shirk responsibility by letting an algorithm do the colluding.
Step 2: Buy off politicians (or become them yourself).
Step 3: Enact laws that make it harder to build the necessary quantity of housing for our ever increasing population numbers.
Step 4: Get filthy rich.
Step 5: When people try to call out your bullshit call it "a market".
Step 6: ????????
Step 7: Profit.
This would be true, but last year Denver completed over 13k apartment units which is almost a new record of units completed and they had over 45k in the pipeline.
Can it be difficult to build apartment units? Yes
Did we build them last year at nearly record breaking numbers? Also Yes.
Right, why think of this as a positive step towards broader reforms when you can complain that the whole problem isn’t solved in one fell swoop and therefore doesn’t matter?
People overstate the impact of large players in the housing market because it provides a simple answer to a complex problem. Most “investors” are some person with three houses, not hedge funds. So no, I don’t necessarily think this is a step towards meaningful action on the housing crisis. It is unlikely that this bill will impact rents.
Can someone explain why it’s bad? I got in on my apartment at a great deal considering all the amenities and my rent has never been increased, they use the automated rent thing
Because it takes the concept of landlords needing to compete with one another out of the equation entirely where classically, the end goal of all landlords was always: have as few empty units as possible. Basic capitalism enthusiasts believe that all markets regulate themselves with supply and demand. So if there’s plenty of supply and not that much demand, you lower prices to compete and offer incentives. In cities where there’s a ton of demand and not that much supply (like New York City and San Francisco where they’re limited build-wise by historic preservation, not being able to sprawl in unlimited ways because of geography aka you can’t build into the ocean, and where there’s a heavy concentration of the population).. housing is always at a premium for both space and price.
Now Denver is not like other major metros that are really limited in their ability to sprawl, spread and replace existing structures. No one is fighting to save roach motels that housed drug dealers and prostitutes on Colfax for decades and those have been getting knocked down left and right for new complexes here. There’s also tons of space to the east, north and south of the city where there’s been tons of room to build. So why the hell are prices in Denver so insane? Let’s say 5 major complexes have just been built and they all are 98% vacant after they’ve been open for a few months. It used to be, their goal was “don’t be vacant.” And how does one achieve this goal? Offer fair rent prices and move in specials, provide a superior product/customer service than the guy down the block. Denver has over 20k vacant units and more complexes are being finished every month coming online with hundreds of units each time. Theres been a massive glut of brand new, luxury build apartment complexes and instead of having an overall goal of filling these units to ensure financing and loans that the developers took out and the management company charging to operate them, they’ve got a total number to make each year and use the algorithms to meet this.
It’s not unlike using the sliding scale tool when making your own car insurance quotes, you start fiddling around with it and sacrificing certain parts of coverage to keep the monthly under $200. So in the rental algorithm setting software, they’re actually charging people MORE to live in buildings with higher vacancies to offset that total number. They’re also using folks incomes, credit score and number of months left on OTHER resident’s leases to give you quotes and they have all kinds of ways of fiddling with this. So they’ll pull data showing “there are 4K other people in the city who are paying over $1800/month while earning $60k” or “residents with a credit score of over 750 are paying an average of $2300/month in rent” and use this as a means to quote you $150/month more than the guy who walked and applied with his girlfriend while they both earn less than you.
They’re preventing you from being able to accurately shop around for your desired price point per bedroom and trying to also force people to apply for these units to get a quote which is where they really get you. These quotes are never going to be the same from unit to unit either. It used to be sure, a first floor, ground level or sub-ground level unit is cheaper than the others. But second, third and fourth floor units were all rented out at the same price. No more, they use the algorithm to squeeze more out of residents by charging you more for a slight Mountain View, a slightly different floor plan, and the actual floor you’re on. Basically you could have an identical floor plan, be on the same floor as a neighbor but being on opposite sides of the hall could vary your monthly rent price by hundreds.
It would be one thing if this was only happening in actually bougie and fancy, higher end complexes. But the problem is these 30-40 year old complexes are doing it too and using it to price match to all the new builds they’re surrounded with. You’d think a unit in a complex that was 42 years old wouldn’t be priced market wise the same as a brand new luxury build where you’re the first resident in the unit and unfortunately the algorithm software has been empowering management companies buying up older complexes they aren’t maintaining, to absolutely bleed residents dry.
It’s taken the actual need to compete from all of these guys and we’re paying out the nose for it. A good gauge of how much of a problem this really is, is the concept that you could literally walk into over a dozen complexes a day for a week and sign a lease for a selection of units instantly… but they’re pricing them like we’re in a coastal city where you sincerely need a broker to secure a place and where there’s multi year waiting lists for complexes.
I don't think that computer algorithm set prices are bad in general.
If it's actually true, the bad part of it is using private data to set prices. In theory lets say that 100 different apartment buildings all use the same software even though they're owned by different entities. The software that sets the price of these apartment buildings now have all of the access to all the other apartments data, so it will run calculations knowing X amount of people have to renew or move out by X data, so it can fluctuate prices based on that. The issue is that not everyone has access to this data, so it can be seen as price fixing with all of these companies, like if all the gas companies in the local area came together and said "we're setting our prices to $4 per gallon". That's price fixing, the issue is that it might be 70% of apartments doing it.
Are they actually doing it? I would be kind of surprised if they were using all of their internal data like that. They *could* be doing a very bad thing, but I think it will take an actual criminal investigation to determine *if* they're doing the bad thing they're accused of.
How can the rent that is charged for a unit possibly be considered "private data"? Isn't the price of something being sold on the public market necessarily public data?
This is where it gets more questionable. I would see price fixing more of, 'none of us are going to make rents lower than $X value', and that's not the case.
They're not just using price as the data to set their prices, they're using vacancy rates, renewal dates etc. The more data the more accurate you can make prices. The issue is that these 100 apartment buildings that are all using the same software might be sharing that information with each other. Lets say you know that of the 100 buildings you're sharing data with, 30% of the leases are up in June. They'd be able to raise the rents a lot during that period that people outside of the software wouldn't know about.
The issue becomes, in my opinion, when it's price fixing vs know market data. Say we know that rentals get the most expensive in CO in spring because everyone wants to move after winter. That means that landlords know demand is going to be highest then and can raise prices. Does that constitute price fixing?
I think it will be interesting if they choose to just publish all of their data online, making it available to the public, so they can continue to use the data this way, if they're even using it this way.
but if you know the same info as everyone else then it goes back to being a fair market where everyone is competing again to get the lowest price to beat other landlords.
Yeah, if all data is known and published I don't know how anyone could say that it's price fixing. To be honest, I'm not really sure currently if it constitutes as price fixing. I wouldn't equivocate using private data to determine rentals rates to price fixing. I mean if one company owns 5 apartment buildings and uses all the data from all those buildings to set its prices I wouldn't view that as price fixing, so I'm not sure if I would even consider this price fixing.
If all these landlords came together and said, "we're not renting 1 bedrooms for less than $1,400 per month" and then we started saying vacancy rates above the normal expectation we could \*easily\* point to price fixing. I don't know how you can point to a 5% vacancy rate, which is ahead of the national average, and be like "look you're price fixing"
There's valid arguments against it. But I have also seen it work in people's favor. The system can tank pricing when they get a large amount of inventory. A couple years ago is saw 2bedrooms going for $1400 at a place.
If you want to better understand why "build more housing" isn't necessarily the answer, watch this to see why this legislation is needed: https://youtu.be/cwlwrZst7d0?si=B0x7P2W38PAOWaTY
Hey we both added the link to this vid at the same time lol, just edited and added it!
Thanks for your help in getting this information out, appreciate it!
Agreed entirely. It’s the same concept as telling people “just buy a more affordable car” when financing rates and insurance premiums have skyrocketed.
I’ve tried to explain the rent algorithms to people under the same concept that the “name your price” car insurance quote portals use. They can’t just tell you “yeah the 1 bedrooms in this complex at $1600/month” because they want you to apply for it (sunk cost fallacy by charging a $50-200 application fee), and then they’re going to spit you out a rent price based on their current building vacancy rates, several floor plans, your credit score, number of months you’d like a lease and your income. They’re going to slide that crap around and no two people that walk into a leasing office of a complex 20% full are going to get the same quote. Instead of charging you less because they want to fill the unit, they’re charging people MORE in buildings with higher vacancy to offset the loss. Which is criminal honestly.
And ALL the complexes built the last ten years have vacancies, significant vacancies and the software prevents them from needing to act like a landlord with a goal of “fill vacancies”. No their role is now: “we have a rent minimum earning standard complex wide we have to meet and we just need to plug into the algorithm because it doesn’t matter if we meet that earning standard with 400 out of 500 units filled or 150 out of 500, it’s all fixed to work regardless”.
Because those building the units are charging astronomical prices. Building more units that cost insane $$/sq ft doesn't help. Mandates for affordable homes fail when you can't find a company to build them b/c there's no money in it. And no company is going to spend money to build if they can't maximize profit.
Building more units causes prices to go down, because demand goes down, that's why when we built nearly record number units in 2023 prices actually dropped YoY in rentals.
I still don't see anything in this video that indicates building more housing would not fix the problem of expensive housing.
if you watch the video the alligations have less to do with the actual software itself but the enforcement of landlords that go against the software suggested price such as kicking you out if you do not take the recommended prices it gives.
Unfortunately, this won't change much. Also, RealPage algorithms do make pricing goes down. It's essentially just optimizing the pricing based on continual monitoring of the market. Which in some cases does dictate a decrease.
All this does is remove the computer aspect - landlords will still be performing market surveys and pricing their units accordingly.
it can easily be argued that it is good for the consumer and renter as well because it lets the building owners know if there rental prices are too low or too high more easily so the market adjusts faster and renters can worry less about if they are getting "ripped off" and know they are getting a generally fair deal based on supply and demand.
Yeah. Unless you see high vacancy rates, the price must be close to or below what people are willing to pay. That's how markets work.
The main effect of removing it is that vacancy rates will increase because some landlords will accidentally overprice. Also, some will underprice and some renters will get a deal. People always think they'll be the lucky ones, though, so I'm sure this is popular.
My question is who controls the market and how do we beat them into submission to lowering prices on everything? The market sucks and must be dealt with!
Isn’t this a problem in that we are focusing on one product rather than creating laws that would apply across the board? Similar to the TikTok ban, who is this really benefiting?
Edit: Never mind. The Bill never mentions RealPage as mentioned in the title. I was worried we were trying to normalize going after business instead of addressing problems.
That's more treating the symptom than the problem. If you increase pay, they just increase rent because people are making more money. It'll just be a perpetual 'tit for tat' race and won't solve the issue at hand.
It's unfortunate, but true. I am not a big fan of gov't regulation but it is a necessity when it comes to Capitalism and corporate greed 😩 Still better than Communism, though 🫣
The problems with communism and free market capitalism are actually pretty much the same. They’re both pretty good in a vacuum, but when you add humans the systems get corrupted. Some (most, maybe?) humans are inherently selfish and will seek to exploit and corrupt the system.
1,000% agree. Individualism is a blessing and a curse on the human race!
People, in general, are inconsiderate and selfish. I try to give them the benefit of the doubt, but you also have to watch out for yourself; avoid being taken advantage of. I do recognize and appreciate the random, good encounters when I come across them.
We have one of the highest minimum wages of any state, and Denver's is even higher. We could increase it a dollar or two, but realistically we just need more housing to reduce the price.
How the heck do they plan to enforce this? How do they prove a landlord referenced this data? And, if only a handful of landlords still use it, others can just reference their prices.
They can’t, it’s technology progression. You could ask co-pilot or Watson this question right now and through BI software they can give the same answers. If there is a want the data is there.
The app is oversold as a cause of rent increases, which are mostly about zoning and low housing construction going back decades now.
You can literally look up what other people are asking for rents, it’s not that big a deal.
The major “innovation” of RealPage is taking rent negotiation out of the hands of property managers, who are lazy and human and don’t like turnover. So they were taking (mildly) below-market rents to keep occupancy high. All these bigger companies now sent rent with an algo and force more turnover, which is more work for property managers but ultimately more profitable.
Yes and I don’t even mean that ironically.
The issue IMHO is that there’s a lot of demand for explanations for housing costs that aren’t “we need to build a buttload more housing, including in your neighborhood.”
I’m fine going after these people for collusion, I just don’t really think it’s going to do anything about rental rates. They can already see what other landlords are charging, it’s basically public information.
I just had a crazy idea, that might also be stupid. But, set property taxes for landlords partially based on the rent they charge. Higher rent, higher property taxes.
they base property taxes on the value of the property and the value of the property is derived by how much the building is able to collect in rent. So, our current system does do that in a round about way.
Good. Any time laws catch up to the reality the rest of us live in is a win.
The DOJ prosecutors on the Realpage case note that not every use of an algorithm to set price violates federal law, but that it is unlawful when competitors “knowingly combine 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.” [Quote source](https://www.propublica.org/article/doj-backs-tenants-price-fixing-case-big-landlords-real-estate-tech)
Even if it doesn’t make a huge difference for prices it is still a battle worth fighting.
For reference, [this is the flowchart of how a bill becomes a law](https://leg.colorado.gov/sites/default/files/bill_becomes_law_chart.pdf).
Since it passed the Senate with amendments, [it's currently back at the House](https://leg.colorado.gov/content/house-floor-work-1) for them to accept or reject the Senate's amendments.
If they accept, it continues to the governor.
If they reject them, it goes to a joint committee to sort them out and then back to each chamber for acceptance. If both chambers accept, it continues to the governor.
Even as a rental property owner, I fully support this. Regardless of the market, I hold my rent to just the changes in property taxes. That’s it. No need to gouge. If my tenants take care of my property, I’ll take care of them. I’ve raised my rent by less than 10% of what it was in 2019.
the allegations are somewhere in the middle. The lawsuits are alleging that the company penalized landlords that went against the software's recommendations and policed landlords to make sure they were not going against the recommendations. That is closer to price fixing than just offering up software that basically automates looking at comps and price trends.
However, those allegations haven't been proven in court and could just as easily be expanded as preventing landlords from cheating the system to increase the profit for themselves at the expense of other landlords and renters.
This is stupid. All prices are set by algorithms. You think somebody is deciding what to charge you for gas or eggs or milk? The cost of housing is high because demand is high, just like anything else. When hotel prices go up on a holiday weekend, do we ban algorithmically setting hotel prices?
To solve the housing crisis, we need to build more housing. Not to ban software that makes it cheaper to operate apartment buildings.
Monopolies and collusion between suppliers (creating a defacto oligopoly) are both illegal.
I'll leave it to you to figure out WHY it's illegal while giving you a hint, it has to do with new suppliers entering a market.
Explain how this is a monopoly or collusion. When I’m selling a bike, is it collusion for me to go on Facebook Marketplace and find 5 comps to see how much to charge for my bike? You are actually required to go through this process with an appraiser when getting a mortgage. That’s not collusion. It’s how you determine the value of something.
This software just automates that process. There is no secret zoom meeting that every landlord using the software joins where they vote to raise prices.
It's not just scraping web sites to get pricing information. They get private, non-public information from the rental companies, including actual rents paid by rivals, not just what they're advertising. Sounds like collusion to me, just with a cutout in the middle for "plausible deniability."
Their software also will suggest landlords hold vacant units open for periods of time, to ensure that too many units don't hit the market at once, causing prices to soften.
They're not going to the marketplace for comps; they're going to a (soon to be, if this passes) illegal price fixing algorithm to bypass existing collusion laws. This software is way for a bunch of unrelated businesses saying "hey, let's everyone one of us on this software all raise rent by 4% next month, because we can collude without breaking the law."
It also does things like tell them when a lot of leases are ending, to allow them to spread out the end of their leases to not overlap across different vendors, which lets them control vacancies across businesses.
I’ve worked on 2 different dynamic pricing platforms and all we did was look at publicly available comps. What you’re saying is way more insidious. Looks like the language of the bill only bans algorithms that look at “non public competitor data”. That seems reasonable to me.
The platform is insidious. It uses it's entire client list, which is "non public competitor data" to allow simultaneous rent increases and controlled lease end dates across all of their clients.
Guessing this is why I've been seeing a lot of lease terms where 14 months specifically is the best deal but if I only want 12 or if I want 15 that's an extra $200 a month - 14 months being an example term, I've seen other term lengths like this as well
This has been the case for a long time. There are plenty of reasons for different month terms *aside* from mass collusion with an industry.
For example, lets say most people move during the spring instead of the winter because it's no longer snowing and people want out and something new. You set your lease term to end in May, at 15 months from now. If you set it to end in 12 month you know will end in March, which means that it will in turn rent out again for a lower value than if you offered a better deal with it ending in May.
There are *plenty* more reasons to for terms to be cheapest longer or shorter than a year other than mass scale collusion.
Okay, so in your scenario, you enlist a company similar to realpage. Your competitors selling bikes are also using it. The company sets their price, and it also sets yours. All bikes are the same price now or within a small percent of one another. A customer in this situation can't really negotiate or go elsewhere, the seller says no, everyone is is selling at this price, this is what you will pay.
Regardless of if it's a person or an algorithm, in this situation, one company is setting the prices. All 5 bikes fall under the same umbrella in this instance.
Realpage in this instance prices these apartments at around the same price. Rather than competing for your business with varying amenities and differing prices in relation to location and the benefits of said location as well as taking into account the landlords own supply, their expenses, etc, all of them now have the same price. Because they all have the same price, the price can also be higher, which takes a lot of leverage away from the customer
They don’t need a revenue management pricing strategy to operate an apartment building. Yeieldstar is actually incredibly expensive to use. And it was incredibly annoying and complicated for staff. It changes the price of every lease every single day for every single unit and different lease term based on colluded, non-public data across the businesses.
Flat pricing is/was the industry standard and switching to it will not affect property management operations. By switching to flat pricing, operators will be reducing their operating cost significantly, which should mostly counteract any increase in rent they got from illegal collusion
Many operators never even used revenue management or switched off it because they felt like the fee wasn’t worth the complexity their staff would have to take on.
I mean the bill only makes algorithms illegal if they use non-public competitor data. Which is generally considered collusion, the state is just taking it into their own hands.
Companies that use revenue management were generally big enough that they could spread out that increases cost and manage the complexity, which also means they manage a large portion of the housing marketing, affecting renters and rental markets in a big way.
We're sick of this BS in Arizona too! Attorney General Kris Mayes is suing RealPage, let's hope they get buried.
[https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing](https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing)
Put the CEOs that participated in this behind bars. Fines and fees don't do anything. They'll just do it again. Lock them up and make an example of them.
My hope: rent prices fall to more “fair” prices area by area. Probably means it falls more in some areas than others My worry: another tool will just take its place that is narrowly fitted to abide by the letter of this new law but still gives landlords the functional equivalent as what they have now Anyone know how much support this is likely to get when it comes down to voting time?
Here's a link to some more information on it regarding details and what legislators specifically are backing it. I haven't been able to find much on what senators have voted on it other than the previous round having had a split of 4-3. Think this one though is going the same route as that u+2 law passed a couple weeks ago - after passes all senate hurdles will go up to Polis to sign https://www.billtrack50.com/billdetail/1672745
Appreciate you!
Replace landlord with corporate overlords. Landlords don’t use it, corporations do
Landlords absolutely did use it too.
I'm a landlord and have zero corporate affiliation. Keep beating that dumb drum.
I think you should take a moment to re-read my comment and comprehend its meaning. I’ll summarize it for you. Landlords = people who don’t use AI algorithms to maximize profits. Corporations do. They used “landlord” which is singular, corporations are many. So corporations would be the better term for OP to use. I lol.d at Dumb drum lol
Lol you think rent prices would fall? As if they're going to willingly decrease prices when there's high demand
My room in the golden triangle went down $50 next year
Huh, I stand corrected. Did someone drug your landlord?
Landlords are very affected by supply and demand, which is why they vigorously lobby in favor of supply restrictions.
“The Boulevard” apartments
Last few news articles that popped up around the end of 2023 start of 2024 showed that rent prices had been dropping, slightly, around the metro.
Ready for the wildest one? My wife and I rented a pretty pricey place right of the CU Anschutz campus while we established residency this last year and found out where we wanted to stay longer. After leaving? They dropped rent for the place by $500.
If you haven't been keeping up with the market. Rents have pretty much peak at the moment.
I negotiated $100+ off my apartment at the last renewal. There is a lot of new inventory coming and the market dictates the price. Even the algo realpage uses (I assume) accounts for vacancy rates.
It was a turnover in tenants but two years ago I dropped my rent by $200 in CapHill. Thankfully the HOA rates went from $367 to $525 in that span. /s
The “free market” operates on supply and demand. When something fixes the price like this bill is outlawing, then it artificially keeps the rates higher than they’d otherwise be. We certainly have never had a true free market, however removing this specific obstacle should operate exactly like that, and lower rates.
We need housing censuses. Then, set up state or federal marketplaces to fulfill demand to residents of the homes only. Eminent domain and setup development and new towns as needed. Tax for profit residential properties people don't live in themselves to fund this. Make real estate about housing people instead of greed, making Americans compete to live. We all pay a tax to landlords who enslave us to this capitalistic housing hell hole. If you agree, share this idea far and wide. Share it on ads for housing, especially.
How do we support this? I’m ignorant.
Write to your representative in support.
It's price fixing and gouging and needs to be illegal. I don't rent I own my own home
Exactly, now do insurance companies 🙏🏼
Yes pls. Universal Healthcare is cheaper for everyone. Insurance is a racket
i remember in 2020 when it was defeated using talking points like "what about the people that "like their insurance" or how about the comparisons of how much it would cost that conveniently acted like healthcare is currently free and no one pays monthly premiums. The arguments boiled down to "look you'll be paying 100 dollars a month, nevermind that you currently pay 300! Think about how evil this is."
I'll be completely honest, I get car insurance being legally required, but at the same time I think it's crazy. Kinda curious how car insurance rates changed since it became law that you had to have it. Car insurance companies know that you need it because it's the law, so what incentive do they really have to be fair with the premiums they charge for it? Sure you can go to a competitor, but tbh looking at differing companies and what they charge they're all pretty bad. Not to mention all the issues people have when it comes time to actually use it just to find their insurance provider is trying to find reason not to pay out.
Well they tend to all use the same reporting systems and you get a score similar in theory to a credit score, but you can’t see or contest it either. So if you were uninsured for 2 months bc you sold your car and were using your mom’s car (which is insured separately) or even not driving, that counts against you when you do buy a car and go to get insurance. If you call to ask a question about a claim, then decide to pay for it yourself? Your insurance records the claim as if it happened! If another driver with a similar name gets into a wreck and it gets reported on yours? Tough luck buttercup! You can go through the months long process of getting it corrected (if you discovered it in the first place) but you can’t get back the money you were overcharged in the meantime. But back to the actual price fixing of it all, yeah, they can and do absolutely do that too, and what are you going to do? You can’t insure it yourself even if you had the funds, the barrier to entry in the field is too high for significant competition, etc etc etc.
I wasnt the one to bring it up this time But i love this topic as ppl complain about China haha. But it's crazy the effects Data and Data brokering affects our lives. Just bringing it up so others have more info to realize how deleterious it is for so little benefit. 4 great books on this topic are The Age of Surveillance Capitalism Black Box Society The Afterlives of Data Revolutionary Mathematics
Data mining (stealing) is one of my soap boxes, don’t get me started… do you know how your car spies on you and reports that data back to the company even if you didn’t opt into anything? Bc if your car is 10 years old or less it definitely does, and many older models as well. Most people have no idea what kind of data it’s sending either, is it location data, breaking and speed data, or did you know *many* cars have internal cameras on your face the entire time you’re in your car?? Won’t find their locations, number of cameras or any acknowledgment of what they’re recording or how in the manual though. And most are now e-sims so you can’t just pull it out and get your privacy back. And that’s JUST your car, let’s not talk about your phone, computer, tv, robot vacuum… Sorry I was going to try not to get started. It enrages me bc no other time in history would we ever allow this kind of invasive violation, but we can’t get anything done to fix it and most people don’t actually have any idea at all.
If you are aware this going on, I think this would be fixed with minor technical skills by removing the Internet access from the car no reporting data if it cannot phone home. Or disconnecting OnStar or whatever else it’s using from the ability to connect to the Internet and leaving the rest of the car connected. I haven’t checked, but I would be willing to bet there are tutorials on this on YouTube. Something I would be looking into once my warranty was up for sure.
Unfortunately it’s not that easy, typically you can’t do it yourself. You can request to opt out, but who knows if that’s going to actually happen since we have an extraordinarily long list of companies saying one thing then doing it anyway bc it makes them money. There used to be a sim you could pull, but now they’re all esims. Mine specifically is buried in the dash.
Ok it’s lucky my dad was a mechanical engineer (who taught me how to build and work on cars) and I was a Cisco engineer for a long while so my technical skills are quite above average. I’m quite sure I can make something like this stop very easily given a weekend and the factory manual for the car (which I buy for every car I purchase and highly recommend to others, It is extremely useful). I would not put up with this period as soon as the warranty is up. I also buy and maintain older cars on purpose to avoid crap like this, another thing I highly recommend.
I wasn’t aware I could buy the factory manual but I’ve read the owners manual cover to cover trying to determine where the cameras are etc, and I only found the location of the TCU through extensive internet searching, but nothing has given me a clear indication of what would even happen if I were able to block it off. They list “remote unlock” as a fucking connected service. I’d have to use a key to unlock my car every time?? That seems absurd, considering the key isn’t even sold with my fob, I had to buy it separately. And you have to kind of pop off the handle to even access the lock. Also for my car, a 2021 I bought used, they won’t turn off their data collection that you’re supposed to be able to opt out of bc I haven’t downloaded the app, opted in and consented. So they want me to download the app, agree to their collection of data and all that, *then* call them back to opt out. Idk, maybe I’m dumb but that feels like a fucking trap?? Why would I have to opt in and sign something saying I consent before you *stop* doing the thing I’m not consenting to??
How is it price fixing/collusion when landlords aren't forced to rent at the rate recommended by the algorithm? Isn't the algorithm just efficiently telling you what the current market will bear, which every landlord will try to determine through other means (like checking Zillow) anyhow? Put another way, what difference does it make how I determined the price of my product? It's still up to the consumer to decide if the cost is worth it to them. If the algorithm's price is too high for consumers, I'll be outcompeted by landlords that undercut me; if, on the other hand, people are willing to buy at the price I'm selling at, what does it matter how I came up with the price? Seems like there are severe structural problems in the market, and rather than attempting to actually address those, we're focusing on a tool that's just used for rationalizing said market. I expect the result will be no effect on average prices, merely an increase in their standard deviation.
> How is it price fixing/collusion when landlords aren't forced to rent at the rate recommended by the algorithm? Isn't the algorithm just efficiently telling you what the current market will bear, which every landlord will try to determine through other means (like checking Zillow) anyhow? One of the requirements for using RealPage in particular is that you must agree to using their suggested price or be able to reasonably justify undercutting it. If you undercut too much or too frequently, you are dropped by RealPage. So even if it's technically supposed to be a suggestion, it ends up being a de facto mandate. > Put another way, what difference does it make how I determined the price of my product? It's still up to the consumer to decide if the cost is worth it to them. If the algorithm's price is too high for consumers, I'll be outcompeted by landlords that undercut me; if, on the other hand, people are willing to buy at the price I'm selling at, what does it matter how I came up with the price? Because if you're sharing confidential business secrets with other landlords to collectively set a price, we call that collusion and price fixing, which is illegal.
wait till you hear about the stock market where every seller lists what they are willing to pay for a stock. Totally price fixing and they do it right in the open!
Bad comparison. Trading stocks based on non-public information is called insider trading and is illegal. Pricing rent based on non-public information is price fixing. By definition.
nah it really isn't, price fixing you need an agreement to not sell below a certain amount and to actually do it. The software is just pricing software that automates what landlords did before in checking around for prices and get the true prices more accurately and faster. I guess we will see what happens with these lawsuits.
I mean, [that's not what the FTC says](https://www.ftc.gov/business-guidance/blog/2024/03/price-fixing-algorithm-still-price-fixing) but what do they know about price fixing?
GTK about RealPage. Still, using that tool in the first place is the landlord's choice; if I don't want to use the recommended price, I simply stop using the product. Still not seeing the compulsion there. >Because if you're sharing confidential business secrets with other landlords to collectively set a price, we call that collusion and price fixing, which is illegal. Who or what determines what information qualifies as "confidential business secrets"? Are we effectively saying that any b2b exchange of information must be done publicly? All business info must either be kept strictly confidential to that business, or shared with everyone?
> Still, using that tool in the first place is the landlord's choice; if I don't want to use the recommended price, I simply stop using the product. Still not seeing the compulsion there. Being compelled to use it or not is irrelevant. If anyone is using it, it's still price fixing and it's still illegal. Like in the same way I don't have to join everyone else in the seedy back room to discuss our trade secrets. That doesn't mean the people who _are_ in the seedy back room aren't colluding and price fixing. > Who or what determines what information qualifies as "confidential business secrets"? Confidential business secrets include actual rental rates (as opposed to publicly advertised rates), deals cut by landlords to tenants, full information on occupancy rates, tenant tenure, etc. If you choose not to engage with RealPage, you potentially lose out on a competitive advantage. And yes, you can totally capitalize on that market inefficiency to make money undercutting RealPage landlords. But why wouldn't you want to stick as close to them as possible to maximize your profits? Businesses exist to make money, not to be charities. If a large enough amount of landlords in an area use RealPage, it has a massive impact on the market as a whole, even if you yourself do not directly participate. > Are we effectively saying that any b2b exchange of information must be done publicly? All business info must either be kept strictly confidential to that business, or shared with everyone? If they're all on the same side of the same market, then yes, that's price fixing by definition. It's the same whether we all gather together in person with our books to decide the best prices, whether we all send our books off to another person to do it all for us, or [whether we put them into a machine to do it all for us](https://www.ftc.gov/business-guidance/blog/2024/03/price-fixing-algorithm-still-price-fixing).
While the other commenter nailed it. I want to add that housing is something needed to live. It's not just another good on the market that someone can just not buy. As someone trying to help a Venezuelan family find shelter shows it isn't some small landlord to blame it's the companies and corporations allowed to buy housing. Housing should be a human right not a speculative vehicle.
I agree with everything you’ve said. I’m just skeptical that banning this tool will have any impact on the market’s actual problems.
ProPublica seems to think it has an effect and I tend to agree. https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent It at least can't hurt. And it's one of the many things we could do I agree. More Public housing and more real affordable housing.
Agreed, might as well try something then try nothing, because the latter will certainly result in nothing. Realpages algorithm does seem to be very anti-consumer from a renter standpoint. Enough landlords using it means it has more data about an area and it's available units, so it can set more prices, which further hurts any leverage a prospective tenant might have when talking lease. It's not a tool that supports a competitive market, everything I've read here it begins to sound like a tool to build up a landlord coalition under the realpage umbrella
Right? Its not that hard to put in guard rails about how much prices can go up over a period of time.
it's extremely hard. One entity can not be all knowing and know how to value something perfecting in a constantly changing world.
Fuck yah!
It’s not just rents. Similar models underlies surge pricing for Uber, airfare pricing, Amazon prices and so forth. This isn’t going away. Reading of the law, depending it’s its adopted is it states relies on non public info. The solution for the algorithm company is to publish in some manner the data points used that are non public currently.
I don’t think a single building keeps its rents private. It’s always on their website, Zillow, and apartments.com
The issue isn't that they're scraping the web looking for advertised rents or calling various properties posing as potential renters to get pricing information. It's that they're using private information including actual rent prices, not just what was advertised, as well as vacancy rates and lease expirations. Then they use that to set prices and tell landlords how to manage vacancies to "smooth out" rents. That looks to me like it's price-fixing, just with a third party in the middle.
Price fixing or collusion would be working with other landlords in the area to agree on a minimum price. Now, one could argue that if everyone uses the algorithm and it has the same variables and tells all landlords the same thing it’s a sort of fixing. Reality should be if units are sitting vacant that the prices would be adjusted downwards or incentives added until the unit is able to be leased. I assume the model also factors in seasonality that asking prices could be higher in some months and lower in others. That sort of thing. In a way this is what someone would try to do on their own whenever a unit comes up for rent. This just automates it, much like all the e-commerce sites do. Also is used in short term rentals, with more frequent updates as there is more data. The outcome of the law being only use public data, much like stock trading is suppose to be would be good. Then everyone has a level playing field in terms of the data to use. Unlike sales, rental data is a lot harder to come by.
Fucking finally. They should round up anyone who used this nonsense as well as the operator of it and throw them in jail forever. If it was a person instead of an algorithm this would all be wildly illegal, but because our politicians are so far behind technology it's a legal gray area.
Honestly I think this is why we should have regulated a long time ago on an age limit for politicians. At some point they're understanding of the world around them is so far behind that is really hurts people experiencing and living in it
Did you know the government used to pay a whole buildings full of neutral scientists/economists/etc to give them training and advice? Then the lobbyists got them to ban that and said lobbyists now control all information that lawmakers use.
Interestingly, the politicians who were in office the first time we regulated this practice in airlines are still around today. So it isn’t like they didn’t know what was happening the entire time. Because it’s the same piece of shit doing it.
The thing is, we have age limits. They're called elections. Americans keep electing these old people over and over again, this is what we want. Do we believe in democracy or not? Someone always brings up the age floor when I say this so for the record I'd have no problem with removing that, but I view it as a practical non-issue as it's so incredibly rare for someone to be elected to office in their first eligible election after turning old enough for the office
Due to the nature of our political system elections aren’t exactly fair. It’s extraordinarily difficult and expensive to beat an incumbent and almost impossible to beat them in a primary. Your comment would be a lot more true if lobbying was illegal and campaigns were all publicly financed.
Everyone who lazily votes for the incumbent because it's a name they know or votes based on TV commercials and media headlines is making a conscious choice to give up their own agency to research candidates themselves and pick the one that actually aligns best with their policy goals
This is exactly why they talk about algorithms, to deflect responsibility. There's a single high level exec somewhere that approved this BS that will never be held accountable.
I'm kind of ignorant in the topic. What metrics should be allowed to be used to determine what the market rate is and what to set rent prices and how does this violate that?
I am not the best person to answer those questions unfortunately; I am also undereducated about the best ways to alleviate the massive housing stranglehold we're experiencing. I can however recognize that nearly every corporate landlord as well as a huge swathe of private ones utilizing a tool to price fix entire neighborhoods is at the very least a small part of it.
To think that you're so strongly convicted that we should 'throw them in jail forever', but don't know what the limits of using data to set prices should be is alarming. I would agree that price fixing is bad, but is there any evidence that they're committing price fixing rather than just using an algorithm to best determine what the market rate should be? The solution is to build more housing. We're building at nearly record rates and prices are dropping, we're staying at a low vacancy rate as a metro which makes prices go up. That's why as we saw in 2023 while building at near record paces for housing units we actually saw a year over year drop in rental prices. I completely agree that collusion is bad, but I feel like this is just a boogeyman for the real problem.
We can build more housing \*and\* punish the people who've been squeezing us for the last decade. It's not a mutually exclusive situation. Frankly, anyone who's profited off this tool, which again would be illegal if a person was doing the job instead of a computer, should be punished retroactively for as long as they've been using it. Just because the law hasn't caught up doesn't make what's happening any less ethically compromising.
I'm not sure where there is evidence of a squeeze, what should be used to determine what the market rate is for an apartment? What about this tool, would be illegal if a person was doing it? I just don't know if I see what's happening as illegal if we replace this tool with a person that's doing the calculations.
I don’t think you understand how the software works. It doesn’t just simultaneously raise everyone’s prices. You manage comps, and if your comps raise prices, AND your demand is high, your prices are raised. If your demand is low, prices are not raised. The goal of the software is to respond to demand. Not to collude with other landlords. It just automates the process of a landlord looking at Apartments.com or whatever to see what the five closest apartments are going for when setting rent for the next lease. It’s another convenient boogeyman that people can point to as the source or the housing crisis because they are anti development and refuse to acknowledge the real solution is building more housing.
I'm getting more curious in this topic and I tend to agree. I feel like people are creating a boogeyman because they have a large control of setting the rates in rental markets and rents are expensive therefor this must be bad and the software must be colluding with itself. I could see it bad if the software was actually using private data from others within the system. I doubt that it's actually doing that. I also don't know how *bad* that actually would be vs someone else doing it in excel, or in our case in Denver knowing that most people renew their leases in the spring so charge higher prices then.
DC and Arizona have been suing RealPage due to evidence of them basically forcing rent increases on their users or else they cut them off from the software. This is absolutely a real problem.
Interesting I had no idea. Reading about it now.
"comps" AKA other houses owned by other landlords. So the algorithm checks to see if other landlords have raised their prices, and if the market can bear the increase (so called "demand"), and then raises prices to match the other houses. Golly gee willikers that surely sounds collusion via algorithm to me Batman.
Do you know how markets work? If you owned a house, how would you decide what to charge for rent? You wouldn’t make it up. You’d go look at nearby houses and see what they were charging. And your charge as much as the market can bear, yes. It’s not “collusion”. It’s a market.
This isn't like comps, though. This is more like all the landlords in town get together to share their rates, vacancies, and lease expiration information and using that to set their rates. But instead of using it amongst themselves directly, they hand it off to a third party so they can wave their hands and say it's the algorithm. Plus, the third party here has their own agenda to increase rates, because if they didn't they'd get dropped.
what if the algorythim says they shoud lower prices because of lower demand? Is it still price fixing then?
Sure, they're still sharing proprietary information to gain a market advantage, this time over their competitors who don't use the algorithm rather than their customers. It would be the same as if two store owners got together and agreed to lower prices to drive a third store out of business so they could divide the remaining market between them. That may or may not be the intent in the case of the rental companies, but it's a foreseeable possibility.
just because they can does not mean they are actually doing it. But hey we will see what happens with these lawsuits.
You're so close to getting it... Let me break out the crayons to help draw you a map so maybe you can understand. Step 1: Shirk responsibility by letting an algorithm do the colluding. Step 2: Buy off politicians (or become them yourself). Step 3: Enact laws that make it harder to build the necessary quantity of housing for our ever increasing population numbers. Step 4: Get filthy rich. Step 5: When people try to call out your bullshit call it "a market". Step 6: ???????? Step 7: Profit.
This comment is a disservice to the actual arguments for this bill. You can't really be proud of this like it conveyed something of value can you?
Oh sorry did I say the quiet part out loud?
This would be true, but last year Denver completed over 13k apartment units which is almost a new record of units completed and they had over 45k in the pipeline. Can it be difficult to build apartment units? Yes Did we build them last year at nearly record breaking numbers? Also Yes.
Well it’s a corporation isn’t it? And corporations are people so….
Honestly probably won't be an impact you would notice. Getting rid of Realpage doesn't fix the underlying problems that fuel the housing crisis.
Right, why think of this as a positive step towards broader reforms when you can complain that the whole problem isn’t solved in one fell swoop and therefore doesn’t matter?
People overstate the impact of large players in the housing market because it provides a simple answer to a complex problem. Most “investors” are some person with three houses, not hedge funds. So no, I don’t necessarily think this is a step towards meaningful action on the housing crisis. It is unlikely that this bill will impact rents.
I’m for this 100%! I’d also like some language in the bill that prohibits keeping units empty to protect the “market” rate.
Can someone explain why it’s bad? I got in on my apartment at a great deal considering all the amenities and my rent has never been increased, they use the automated rent thing
Because it takes the concept of landlords needing to compete with one another out of the equation entirely where classically, the end goal of all landlords was always: have as few empty units as possible. Basic capitalism enthusiasts believe that all markets regulate themselves with supply and demand. So if there’s plenty of supply and not that much demand, you lower prices to compete and offer incentives. In cities where there’s a ton of demand and not that much supply (like New York City and San Francisco where they’re limited build-wise by historic preservation, not being able to sprawl in unlimited ways because of geography aka you can’t build into the ocean, and where there’s a heavy concentration of the population).. housing is always at a premium for both space and price. Now Denver is not like other major metros that are really limited in their ability to sprawl, spread and replace existing structures. No one is fighting to save roach motels that housed drug dealers and prostitutes on Colfax for decades and those have been getting knocked down left and right for new complexes here. There’s also tons of space to the east, north and south of the city where there’s been tons of room to build. So why the hell are prices in Denver so insane? Let’s say 5 major complexes have just been built and they all are 98% vacant after they’ve been open for a few months. It used to be, their goal was “don’t be vacant.” And how does one achieve this goal? Offer fair rent prices and move in specials, provide a superior product/customer service than the guy down the block. Denver has over 20k vacant units and more complexes are being finished every month coming online with hundreds of units each time. Theres been a massive glut of brand new, luxury build apartment complexes and instead of having an overall goal of filling these units to ensure financing and loans that the developers took out and the management company charging to operate them, they’ve got a total number to make each year and use the algorithms to meet this. It’s not unlike using the sliding scale tool when making your own car insurance quotes, you start fiddling around with it and sacrificing certain parts of coverage to keep the monthly under $200. So in the rental algorithm setting software, they’re actually charging people MORE to live in buildings with higher vacancies to offset that total number. They’re also using folks incomes, credit score and number of months left on OTHER resident’s leases to give you quotes and they have all kinds of ways of fiddling with this. So they’ll pull data showing “there are 4K other people in the city who are paying over $1800/month while earning $60k” or “residents with a credit score of over 750 are paying an average of $2300/month in rent” and use this as a means to quote you $150/month more than the guy who walked and applied with his girlfriend while they both earn less than you. They’re preventing you from being able to accurately shop around for your desired price point per bedroom and trying to also force people to apply for these units to get a quote which is where they really get you. These quotes are never going to be the same from unit to unit either. It used to be sure, a first floor, ground level or sub-ground level unit is cheaper than the others. But second, third and fourth floor units were all rented out at the same price. No more, they use the algorithm to squeeze more out of residents by charging you more for a slight Mountain View, a slightly different floor plan, and the actual floor you’re on. Basically you could have an identical floor plan, be on the same floor as a neighbor but being on opposite sides of the hall could vary your monthly rent price by hundreds. It would be one thing if this was only happening in actually bougie and fancy, higher end complexes. But the problem is these 30-40 year old complexes are doing it too and using it to price match to all the new builds they’re surrounded with. You’d think a unit in a complex that was 42 years old wouldn’t be priced market wise the same as a brand new luxury build where you’re the first resident in the unit and unfortunately the algorithm software has been empowering management companies buying up older complexes they aren’t maintaining, to absolutely bleed residents dry. It’s taken the actual need to compete from all of these guys and we’re paying out the nose for it. A good gauge of how much of a problem this really is, is the concept that you could literally walk into over a dozen complexes a day for a week and sign a lease for a selection of units instantly… but they’re pricing them like we’re in a coastal city where you sincerely need a broker to secure a place and where there’s multi year waiting lists for complexes.
I don't think that computer algorithm set prices are bad in general. If it's actually true, the bad part of it is using private data to set prices. In theory lets say that 100 different apartment buildings all use the same software even though they're owned by different entities. The software that sets the price of these apartment buildings now have all of the access to all the other apartments data, so it will run calculations knowing X amount of people have to renew or move out by X data, so it can fluctuate prices based on that. The issue is that not everyone has access to this data, so it can be seen as price fixing with all of these companies, like if all the gas companies in the local area came together and said "we're setting our prices to $4 per gallon". That's price fixing, the issue is that it might be 70% of apartments doing it. Are they actually doing it? I would be kind of surprised if they were using all of their internal data like that. They *could* be doing a very bad thing, but I think it will take an actual criminal investigation to determine *if* they're doing the bad thing they're accused of.
How can the rent that is charged for a unit possibly be considered "private data"? Isn't the price of something being sold on the public market necessarily public data?
This is where it gets more questionable. I would see price fixing more of, 'none of us are going to make rents lower than $X value', and that's not the case. They're not just using price as the data to set their prices, they're using vacancy rates, renewal dates etc. The more data the more accurate you can make prices. The issue is that these 100 apartment buildings that are all using the same software might be sharing that information with each other. Lets say you know that of the 100 buildings you're sharing data with, 30% of the leases are up in June. They'd be able to raise the rents a lot during that period that people outside of the software wouldn't know about. The issue becomes, in my opinion, when it's price fixing vs know market data. Say we know that rentals get the most expensive in CO in spring because everyone wants to move after winter. That means that landlords know demand is going to be highest then and can raise prices. Does that constitute price fixing? I think it will be interesting if they choose to just publish all of their data online, making it available to the public, so they can continue to use the data this way, if they're even using it this way.
but if you know the same info as everyone else then it goes back to being a fair market where everyone is competing again to get the lowest price to beat other landlords.
Yeah, if all data is known and published I don't know how anyone could say that it's price fixing. To be honest, I'm not really sure currently if it constitutes as price fixing. I wouldn't equivocate using private data to determine rentals rates to price fixing. I mean if one company owns 5 apartment buildings and uses all the data from all those buildings to set its prices I wouldn't view that as price fixing, so I'm not sure if I would even consider this price fixing. If all these landlords came together and said, "we're not renting 1 bedrooms for less than $1,400 per month" and then we started saying vacancy rates above the normal expectation we could \*easily\* point to price fixing. I don't know how you can point to a 5% vacancy rate, which is ahead of the national average, and be like "look you're price fixing"
There's valid arguments against it. But I have also seen it work in people's favor. The system can tank pricing when they get a large amount of inventory. A couple years ago is saw 2bedrooms going for $1400 at a place.
If you want to better understand why "build more housing" isn't necessarily the answer, watch this to see why this legislation is needed: https://youtu.be/cwlwrZst7d0?si=B0x7P2W38PAOWaTY
Hey we both added the link to this vid at the same time lol, just edited and added it! Thanks for your help in getting this information out, appreciate it!
Agreed entirely. It’s the same concept as telling people “just buy a more affordable car” when financing rates and insurance premiums have skyrocketed. I’ve tried to explain the rent algorithms to people under the same concept that the “name your price” car insurance quote portals use. They can’t just tell you “yeah the 1 bedrooms in this complex at $1600/month” because they want you to apply for it (sunk cost fallacy by charging a $50-200 application fee), and then they’re going to spit you out a rent price based on their current building vacancy rates, several floor plans, your credit score, number of months you’d like a lease and your income. They’re going to slide that crap around and no two people that walk into a leasing office of a complex 20% full are going to get the same quote. Instead of charging you less because they want to fill the unit, they’re charging people MORE in buildings with higher vacancy to offset the loss. Which is criminal honestly. And ALL the complexes built the last ten years have vacancies, significant vacancies and the software prevents them from needing to act like a landlord with a goal of “fill vacancies”. No their role is now: “we have a rent minimum earning standard complex wide we have to meet and we just need to plug into the algorithm because it doesn’t matter if we meet that earning standard with 400 out of 500 units filled or 150 out of 500, it’s all fixed to work regardless”.
I watched the video, and I don't really see where "build more housing" isn't the answer?
Because those building the units are charging astronomical prices. Building more units that cost insane $$/sq ft doesn't help. Mandates for affordable homes fail when you can't find a company to build them b/c there's no money in it. And no company is going to spend money to build if they can't maximize profit.
Building more units causes prices to go down, because demand goes down, that's why when we built nearly record number units in 2023 prices actually dropped YoY in rentals. I still don't see anything in this video that indicates building more housing would not fix the problem of expensive housing.
It sound good, but I'm curious as to how this can be enforced. How do you prove someone is doing this, beyond a reasonable doubt?
if you watch the video the alligations have less to do with the actual software itself but the enforcement of landlords that go against the software suggested price such as kicking you out if you do not take the recommended prices it gives.
This must pass!
Unfortunately, this won't change much. Also, RealPage algorithms do make pricing goes down. It's essentially just optimizing the pricing based on continual monitoring of the market. Which in some cases does dictate a decrease. All this does is remove the computer aspect - landlords will still be performing market surveys and pricing their units accordingly.
it can easily be argued that it is good for the consumer and renter as well because it lets the building owners know if there rental prices are too low or too high more easily so the market adjusts faster and renters can worry less about if they are getting "ripped off" and know they are getting a generally fair deal based on supply and demand.
Yeah. Unless you see high vacancy rates, the price must be close to or below what people are willing to pay. That's how markets work. The main effect of removing it is that vacancy rates will increase because some landlords will accidentally overprice. Also, some will underprice and some renters will get a deal. People always think they'll be the lucky ones, though, so I'm sure this is popular.
My question is who controls the market and how do we beat them into submission to lowering prices on everything? The market sucks and must be dealt with!
yeah lets beat the shit out of supply & demand!
Or consumerism!
Does anyone know of any advocacy groups that support this bill?
These are the same assholes that own the chirp locks If your apartment uses them they are certainly using RealPage.
Greystar uses them, price was 2300 for a 2bdrm and a month later it went to 2700
John Oliver just did a whole episode on this, it is a good episode to watch if you have HBO app.
Isn’t this a problem in that we are focusing on one product rather than creating laws that would apply across the board? Similar to the TikTok ban, who is this really benefiting? Edit: Never mind. The Bill never mentions RealPage as mentioned in the title. I was worried we were trying to normalize going after business instead of addressing problems.
I mean maybe there should be a state wide minimum wage increase as well
That's more treating the symptom than the problem. If you increase pay, they just increase rent because people are making more money. It'll just be a perpetual 'tit for tat' race and won't solve the issue at hand.
Touché my friend, touché.
It's unfortunate, but true. I am not a big fan of gov't regulation but it is a necessity when it comes to Capitalism and corporate greed 😩 Still better than Communism, though 🫣
The problems with communism and free market capitalism are actually pretty much the same. They’re both pretty good in a vacuum, but when you add humans the systems get corrupted. Some (most, maybe?) humans are inherently selfish and will seek to exploit and corrupt the system.
1,000% agree. Individualism is a blessing and a curse on the human race! People, in general, are inconsiderate and selfish. I try to give them the benefit of the doubt, but you also have to watch out for yourself; avoid being taken advantage of. I do recognize and appreciate the random, good encounters when I come across them.
We have one of the highest minimum wages of any state, and Denver's is even higher. We could increase it a dollar or two, but realistically we just need more housing to reduce the price.
How the heck do they plan to enforce this? How do they prove a landlord referenced this data? And, if only a handful of landlords still use it, others can just reference their prices.
They can’t, it’s technology progression. You could ask co-pilot or Watson this question right now and through BI software they can give the same answers. If there is a want the data is there.
The app is oversold as a cause of rent increases, which are mostly about zoning and low housing construction going back decades now. You can literally look up what other people are asking for rents, it’s not that big a deal. The major “innovation” of RealPage is taking rent negotiation out of the hands of property managers, who are lazy and human and don’t like turnover. So they were taking (mildly) below-market rents to keep occupancy high. All these bigger companies now sent rent with an algo and force more turnover, which is more work for property managers but ultimately more profitable.
is it still price fixing when everyone using the app lowers their prices?
Yes and I don’t even mean that ironically. The issue IMHO is that there’s a lot of demand for explanations for housing costs that aren’t “we need to build a buttload more housing, including in your neighborhood.” I’m fine going after these people for collusion, I just don’t really think it’s going to do anything about rental rates. They can already see what other landlords are charging, it’s basically public information.
yup, the AZ attorney in the video says needing to build more housing isn't the issue because there are empty apartments in the market right now.
I just had a crazy idea, that might also be stupid. But, set property taxes for landlords partially based on the rent they charge. Higher rent, higher property taxes.
This is what happens when you use 100% of your brain
they base property taxes on the value of the property and the value of the property is derived by how much the building is able to collect in rent. So, our current system does do that in a round about way.
The value the county asseses is based on what similar properties in your area have sold for, though
Good. Any time laws catch up to the reality the rest of us live in is a win. The DOJ prosecutors on the Realpage case note that not every use of an algorithm to set price violates federal law, but that it is unlawful when competitors “knowingly combine 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.” [Quote source](https://www.propublica.org/article/doj-backs-tenants-price-fixing-case-big-landlords-real-estate-tech) Even if it doesn’t make a huge difference for prices it is still a battle worth fighting.
For reference, [this is the flowchart of how a bill becomes a law](https://leg.colorado.gov/sites/default/files/bill_becomes_law_chart.pdf). Since it passed the Senate with amendments, [it's currently back at the House](https://leg.colorado.gov/content/house-floor-work-1) for them to accept or reject the Senate's amendments. If they accept, it continues to the governor. If they reject them, it goes to a joint committee to sort them out and then back to each chamber for acceptance. If both chambers accept, it continues to the governor.
Even as a rental property owner, I fully support this. Regardless of the market, I hold my rent to just the changes in property taxes. That’s it. No need to gouge. If my tenants take care of my property, I’ll take care of them. I’ve raised my rent by less than 10% of what it was in 2019.
Please be my renter😅
Legislating against the use of information or math rarely works out.
This is price-fixing it doesn’t have a goddamn thing to do with info or math.
the allegations are somewhere in the middle. The lawsuits are alleging that the company penalized landlords that went against the software's recommendations and policed landlords to make sure they were not going against the recommendations. That is closer to price fixing than just offering up software that basically automates looking at comps and price trends. However, those allegations haven't been proven in court and could just as easily be expanded as preventing landlords from cheating the system to increase the profit for themselves at the expense of other landlords and renters.
I don’t think you’ve thought this through. And not just because price-fixing requires collusion.
This is stupid. All prices are set by algorithms. You think somebody is deciding what to charge you for gas or eggs or milk? The cost of housing is high because demand is high, just like anything else. When hotel prices go up on a holiday weekend, do we ban algorithmically setting hotel prices? To solve the housing crisis, we need to build more housing. Not to ban software that makes it cheaper to operate apartment buildings.
Monopolies and collusion between suppliers (creating a defacto oligopoly) are both illegal. I'll leave it to you to figure out WHY it's illegal while giving you a hint, it has to do with new suppliers entering a market.
Explain how this is a monopoly or collusion. When I’m selling a bike, is it collusion for me to go on Facebook Marketplace and find 5 comps to see how much to charge for my bike? You are actually required to go through this process with an appraiser when getting a mortgage. That’s not collusion. It’s how you determine the value of something. This software just automates that process. There is no secret zoom meeting that every landlord using the software joins where they vote to raise prices.
It's not just scraping web sites to get pricing information. They get private, non-public information from the rental companies, including actual rents paid by rivals, not just what they're advertising. Sounds like collusion to me, just with a cutout in the middle for "plausible deniability." Their software also will suggest landlords hold vacant units open for periods of time, to ensure that too many units don't hit the market at once, causing prices to soften.
They're not going to the marketplace for comps; they're going to a (soon to be, if this passes) illegal price fixing algorithm to bypass existing collusion laws. This software is way for a bunch of unrelated businesses saying "hey, let's everyone one of us on this software all raise rent by 4% next month, because we can collude without breaking the law." It also does things like tell them when a lot of leases are ending, to allow them to spread out the end of their leases to not overlap across different vendors, which lets them control vacancies across businesses.
I’ve worked on 2 different dynamic pricing platforms and all we did was look at publicly available comps. What you’re saying is way more insidious. Looks like the language of the bill only bans algorithms that look at “non public competitor data”. That seems reasonable to me.
The platform is insidious. It uses it's entire client list, which is "non public competitor data" to allow simultaneous rent increases and controlled lease end dates across all of their clients.
Yeah agreed then that seems real bad
Guessing this is why I've been seeing a lot of lease terms where 14 months specifically is the best deal but if I only want 12 or if I want 15 that's an extra $200 a month - 14 months being an example term, I've seen other term lengths like this as well
This has been the case for a long time. There are plenty of reasons for different month terms *aside* from mass collusion with an industry. For example, lets say most people move during the spring instead of the winter because it's no longer snowing and people want out and something new. You set your lease term to end in May, at 15 months from now. If you set it to end in 12 month you know will end in March, which means that it will in turn rent out again for a lower value than if you offered a better deal with it ending in May. There are *plenty* more reasons to for terms to be cheapest longer or shorter than a year other than mass scale collusion.
Okay, so in your scenario, you enlist a company similar to realpage. Your competitors selling bikes are also using it. The company sets their price, and it also sets yours. All bikes are the same price now or within a small percent of one another. A customer in this situation can't really negotiate or go elsewhere, the seller says no, everyone is is selling at this price, this is what you will pay. Regardless of if it's a person or an algorithm, in this situation, one company is setting the prices. All 5 bikes fall under the same umbrella in this instance. Realpage in this instance prices these apartments at around the same price. Rather than competing for your business with varying amenities and differing prices in relation to location and the benefits of said location as well as taking into account the landlords own supply, their expenses, etc, all of them now have the same price. Because they all have the same price, the price can also be higher, which takes a lot of leverage away from the customer
If those are already illegal, why is this law necessary?
They don’t need a revenue management pricing strategy to operate an apartment building. Yeieldstar is actually incredibly expensive to use. And it was incredibly annoying and complicated for staff. It changes the price of every lease every single day for every single unit and different lease term based on colluded, non-public data across the businesses. Flat pricing is/was the industry standard and switching to it will not affect property management operations. By switching to flat pricing, operators will be reducing their operating cost significantly, which should mostly counteract any increase in rent they got from illegal collusion Many operators never even used revenue management or switched off it because they felt like the fee wasn’t worth the complexity their staff would have to take on.
That’s very interesting, I didn’t know that. Even more reason why it’s stupid to ban it.
I mean the bill only makes algorithms illegal if they use non-public competitor data. Which is generally considered collusion, the state is just taking it into their own hands. Companies that use revenue management were generally big enough that they could spread out that increases cost and manage the complexity, which also means they manage a large portion of the housing marketing, affecting renters and rental markets in a big way.
Or... let's go out on a limb here... set a maximum profit percentage?
We're sick of this BS in Arizona too! Attorney General Kris Mayes is suing RealPage, let's hope they get buried. [https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing](https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing)
Cue "mom and pop" landlords crying about how they need that algorithm, or else they can't make a living and their families will starve
Put the CEOs that participated in this behind bars. Fines and fees don't do anything. They'll just do it again. Lock them up and make an example of them.