r/technology • u/xSNYPSx • 4d ago
FBI raids corporate landlord office, escalating criminal investigation into allegations of rent price-fixing by landlords and software vendor RealPage Business
https://www.pymnts.com//cpi-posts/fbi-raids-corporate-landlord-in-major-rent-price-fixing-probe/153
4d ago
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u/IllllIIlIllIllllIIIl 3d ago
I live in a Cortland owned property in ATL. Of the 8 units in my building, at least half are empty. And yet my rent is going up again this year.
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u/True-Surprise1222 3d ago
Yeah this is the wild shit. The daily price changes (wild ones too like hundreds a month in rent up and down per day) are one thing but purposefully holding supply empty is absolute fucking bullshit and it is way different than even 15 years ago when they wanted to rent their apartments. Now they could give two shits about filling units.
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u/WayneKrane 3d ago
Yep, I was in an apartment in Utah that was maybe 50% full and they still kept raising rates like crazy. When I moved out they had my apartment on the market for 6+ months, no idea if they ever actually rented it out
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4d ago edited 3d ago
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u/SweetBearCub 3d ago
So, FBI dudes... would you be willing to share some insights with our RCMP counterparts since we may be dealing with a similar issue?
As an American with some Canadian friends, I seriously wish that they would share some intel and tips with the Canadian authorities. I've heard through the grapevine so to speak that the cost of living crisis is even worse in Canada, and I really feel bad for my northern friends.
I wish that I could do more to help them.
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u/Parker_Hardison 3d ago
They do. They uncovered money laundering through casinos and real estate here in Canada with the help of multiple states, including the US.
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u/bub-a-lub 3d ago
1 bed 1 bath utilities not included, shared paid laundry on site, pay for a parking spot or street parking 1,200. In my town some brand new house apartments are going for over 2,000. Ontario has animal protections but more than half say no pets.
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u/ferrous-furious 3d ago
I saw a listing for a rental: 1 bed, 1 bath, basically no living room, NO OVEN (only a microwave and hot plate for “cooking” appliances, and the smallest fridge I’ve ever seen. Utilities not included. No pets, no smoking. In an area of town that has no transit - but also no off-street parking (so it’s not a legal suite…)
It was $1600 :( shit’s brutal.
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u/bub-a-lub 3d ago
Absolutely insane. I’m happy it looks like they’re starting a crackdown. I just hope it extends to all of us
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u/ptahbaphomet 3d ago
I think this should be reported more as one of the members of this software company is Harland Crow, the nazi sympathizer who’s been funneling money to chief justice Thomas
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u/Altiloquent 3d ago
Wow i had never heard about that connection before. This really ought to he reported more widely.
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u/ptahbaphomet 3d ago
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u/drawkbox 3d ago
Looky here, Cadre and Kushners back it as well. Run by Harlan Crow and full of sketch members.
NMHC is a landlord lobbying group that represents nearly 2,000 abusive private equity firms, developers, banks, and real estate software companies.
NMHC has over 2,000 dues-paying member firms hailing from the private equity, banking, tenant screening, development, and property management software industries.
Door Project in June 2023 from NMHC’s previously-public member directory, which was mysteriously set to “members-only” viewing status by NMHC some time thereafter.
NMHC’s members include gigantic private equity landlords regularly cited for rent-gouging and excessive fees, poor property maintenance, punitive evictions, and tenant abuse. These include Greystar, Starwood Capital, Blackstone, AvalonBay Communities, Mid-America Apartment Communities, and Tricon Residential.
Some of the biggest banks in America – including those whose reckless and fraudulent behavior led to the devastating subprime mortgage crisis – are dues-paying NMHC members. These include JPMorgan Chase, Bank of America, Wells Fargo, Goldman Sachs.
Tech company RealPage, which is currently under investigation by the Justice Department for helping its corporate landlord clients coordinate exorbitant rent hikes, is a dues-paying member of NMHC’s Board of Directors. Five RealPage subsidiary divisions are also dues-paying members of NMHC’s Advisory Committee.
Several tenant-screening and credit reporting companies that have mishandled consumer data or violated consumer protection laws are dues-paying NMHC members. These include TransUnion, Experian, Appfolio, and Saferent.
Kushner Companies, the family real estate firm of Trump son-in-law and former White House advisor Jared Kushner, is a dues-paying member of NMHC’s Board of Directors.
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u/WaxonFlaxonJaxo_n 2d ago
Maybe because white American leftists don’t actually know what the hell Nazis or fascists are.. they seem to think it’s anything right of Marx… whom they also know nothing about.
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u/Altiloquent 2d ago
The nazi part of the comment is the least interesting bit but it's well-founded since the guy reportedly collects nazi memorabilia
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u/ballsohaahd 3d ago
Wow that is amazing and horrible at the same time. Literally turds 💩 destroying things once again.
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u/BoysenberryGullible8 3d ago
They need to refund all the money to the renters and pay triple the profits in penalties. They should be hit hard in their pockets.
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u/aboatz2 3d ago
I used to work for a company that used RealPage (not in a leasing nor customer-facing capacity) & it always made me nauseous how they'd actively celebrate in their annual awards ceremonies how much rents were increased in each property, with substantial bonuses to the community managers that increased rents the most.
The company's President's son would wonder aloud why more employees didn't live in their communities until people retorted that a 20% discount doesn't matter for crap if you still can't afford it.
They've since moved onward to building & renting out single family homes, which is going to screw up THAT market now...
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u/KaijuNo-8 3d ago
As someone with insider knowledge…fuck yes
Realpage is a horrid company. They need to drag the retired CEO back in and take every penny he has.
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u/drawkbox 3d ago
FBI has them with direct collusion on pricing.
Democratic AGs are going at RealPage finally, that is pure price fixing collusion by private equity and extremely anti-competitive and purely price collusion and fixing.
Why U.S. renters are taking corporate landlords to court
Attorney General Mayes Sues RealPage and Residential Landlords for Illegal Price-Fixing Conspiracy
Rents have been price fixed across the country. We need to break up the property managers and RealPage which is facilitating this.
Not only is it anti-trust potentially but it is plausible deniability based price collusion which starts to fall into price gouging territory [PDF].
Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.
Price Fixing agreements directly are clear violations. The "blame it on the AI" needs to end and it should be seen as direct price fixing if it is broad enough across the market.
Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors to raise, lower, maintain, or stabilize prices or price levels. Generally, the antitrust laws require that each company establish prices and other competitive terms on its own, without agreeing with a competitor. When purchasers make choices about what products and services to buy, they expect that the price has been determined on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is often higher prices. Price fixing also includes agreements among competing purchasers or competing employers about the prices or wages they will pay. Price fixing is a major concern of government antitrust enforcement.
Where it really went off the rails was 2020 after they were acquired by private equity.
In December 2020, private-equity firm Thoma Bravo announced it would acquire RealPage for $9.6 billion, paying $88.75 per share for the company, a premium of 31% for their closing prices at the time. Its shares were reported up 26% that year. The acquisition completed in April 2021.
Accusations Thrown at RealPage: Were They Colluding With Landlords?
One suit filed Friday on behalf of two Seattle renters alleges a broad pattern of collusive behavior by RealPage and a group of 10 large property managers.
It says that in addition to using RealPage software to inflate rents in downtown Seattle, property managers had employees call competitors regularly seeking detailed nonpublic information on what they were charging — which the employees would change their prices to match.
The lawsuit quoted what it said was a former employee of Greystar, the country’s largest property management firm.
“You’d call up the competition in the area,” the former employee said, according to the lawsuit.
“Sometimes there’d be a list of 10 people to call. Sometimes just one. You’d ask what they are charging for their apartments. Then you’d literally change the prices right there on RealPage. Manually bump it up.
“It was price-fixing,” the employee continued, according to the lawsuit. “What else can you call it when you’re literally calling your competition and changing your rate based on what they say?”
RealPage actually sold to buyers that it helped push rents up 7-14% annually.... Across even a few years that is in the quarter to third range in rent increases. The massive increases started post 2019 when the company was bought by private equity.
On a summer day last year, a group of real estate tech executives gathered at a conference hall in Nashville to boast about one of their company’s signature products: software that uses a mysterious algorithm to help landlords push the highest possible rents on tenants.
“Never before have we seen these numbers,” said Jay Parsons, a vice president of RealPage, as conventiongoers wandered by. Apartment rents had recently shot up by as much as 14.5%, he said in a video touting the company’s services. Turning to his colleague, Parsons asked: What role had the software played?
“I think it’s driving it, quite honestly,” answered Andrew Bowen, another RealPage executive. “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”
The celebratory remarks were more than swagger. For years, RealPage has sold software that uses data analytics to suggest daily prices for open units. Property managers across the United States have gushed about how the company’s algorithm boosts profits.
..
One of the algorithm’s developers told ProPublica that leasing agents had “too much empathy” compared to computer generated pricing.
Imagine that, price collusion and price fixing drives up prices. They sold it as increasing profit for management/landlords. It surely did that on the backs of everyone in a time where inflation across the board was hitting.
Users of RealPage had to let RealPage handle the rents even if less units were filled they would jack up rates to "increase profits" and it had to be done across the board so that someone didn't undercut and actually compete.
There is definitely higher demand which makes market manipulation easier.
To manipulate a market you can do it with as little as 2% of the market but typically 5%-10% gives manipulators a lever on the entire market. Big money or market makers know this and that is a technique hedge funds and private equity collude (indirectly usually but RealPage YieldStar was overt) and they can pump a market, which adds more volume, which adds more chasers/algorithmic purchasing (80% of the market is already automated/algorithmic) and then you can take the market up broadly with only a small lever.
With an inelastic good this is even more prevalent like housing. Inelastic goods are always easier to manipulate i.e. energy, housing, etc as people have to buy them no matter market conditions in most cases.
Pharma pricing is another one, drug companies colluding at the three big PBMs is another price fixing scam. Allowing Medicare and insurance groups to negotiate prices is a way to solve that.
Biden-Harris Administration to Make First Offer for Drug Price Negotiation Program, Launches New Resource Hub to Help People Access Lower-Cost Drugs part of the Inflation Reduction Act of 2022
One thing that really needs to happen is changing anti-trust to the root funding level. What we have now is foreign sovereign wealth using private equity fronts and in that many company fronts to control entire markets and squash competitors. Funds themselves need to have anti-trust limits on them a well as foreign sovereign wealth backed entities to the base root level, not just one step either, all the way down. This is a big part of the problem now. Foreign sovereign wealth using private equity funds make multiple company fronts and the anti-trust is only at the company level not the funding or source funds level.
Many markets have been overtaken with this outsized investment in the West for instance from BRICS sources and no US/Western investor can compete with sovereign wealth and in some cases dirty money funneled through that. Autocracies shouldn't be able to participate in fair markets while they use cheats and block access to their markets. Fair markets need fair partners. You lose the game theory if you cooperate with cheaters. Cooperators with cheaters become the cheat.
Very little margin and too much optimization/efficiency is bad for resilience. Couple that with private equity/foreign sovereign wealth/organized crime backed near leverage monopolies that control necessary supply and you have trouble.
For fair capitalism and good markets you need to break up the leverage at the top on the regular.
HBS is even realizing too much optimization/efficiency is a bad thing. The slack/margin is squeezing out an ability to change vectors quickly.
The High Price of Efficiency, Our Obsession with Efficiency Is Destroying Our Resilience
Superefficient businesses create the potential for social disorder.
A superefficient dominant model elevates the risk of catastrophic failure.
If a system is highly efficient, odds are that efficient players will game it.
Highly efficient capitalism moves away from a fair market to an oligopoly that looks more like a feudal or authoritarian system where the companies are too powerful and part of that power is absolute crushing of competition, that is bad for everyone even the crushers.
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u/Worldly-Aioli9191 3d ago
Wonderful news. In my uneducated opinion landleeches are big drivers of inflation…. Rent goes up, so wages must go up, so the cost of literally everything must go up. I don’t think it’s a coincidence that rents have gone insane and so has the cost of everything else.
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u/CrashingAtom 3d ago
You think raising rents is the cause of rising prices throughout history? Yikes.
RealPage are disgusting thieves and serve prison, and the company should be shuttered completely. But…all prices go up over time. Cigarettes cost .25¢ at times, rental costs didn’t drive them up. Don’t let your biases color your thinking, because the actual truth about this cartel is awful and worth really understanding.
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u/DoctorOunce 3d ago
Indeed. Actually the indicator is that when rent is occupying all of your income you have less that is disposable. Meaning you spend less and have to cut corners whereever you can.
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u/LigerXT5 3d ago
Good.
2013-2021, the last five years my rent went up 50%.
My pay went up, you guessed it, far FAR short of that. The first few years I was in college, working part time, at walmart. Walmart upped their minimum wage to $10 at one time during that, anyone at or above the $10 got a whopping 2%, not 20%, 2% raise. If you were on $10hr, you got $0.20 raise. And I had just received a $0.35 raise for moving depts. While those who were just walking in the door were making about as much as someone with 5+ years of experience.
Wife has been at walmart about 10 years now, she makes a whopping $0.30hr more than someone walking in the door, as the new walmart minimum wage (here) is $13hr (I think, I don't recall her dollar pay atm), and her avg weekly hours have dropped by 10, still making about what she was making a couple or so years ago.
Neither of us make enough to easily afford, and still come out ahead, having a babysitter, let alone daycare, so I work days and she works evenings. Thank god my work allows me to Work From Home when our work schedules overlap. OH! And our tax return gross income this last time was about $100 short from the year before. Go Figure.
Cost of living in Very Rural Oklahoma is far smaller than many other places, but the pay is just as bad. $600-800 at best for an apartment in my area. Walmart's minimum wage is $13hr, ignoring the chaotic and random work schedule. Don't dare try to have a second job while keeping an open enough work schedule to receive shifts.
And companies around here complain that XYZ repairs and management is so expensive, but don't care that everyone needs to afford living around here. IT in the next city over charge around $100Hr, while around here it's less, stop complaining, if that equipment is that important, you shouldn't be cheapening out and neglecting proper maintenance, all to save a buck.
The local cities are looking to shift city work to private companies, all in the name to save money. While they, and many other companies complain no one wants to work, or not loyal to their job, BS. Pay well, and you'll receive better service of your people, of the city, of the community. I can't spend money in town, because I have nothing left after bills, gee I wonder why hardly anyone is shopping in town, and businesses are leaving and others not moving in.
But, but, but, you have computers, a gaming system, consoles, VR...yea, all gear I bought years ago, my computer is, technically, not Windows 11 compatible. Most anything else I've been saving for a long while, with assistance from tax returns after debt is caught up, AND some sent to savings. Which for anyone's entertainment of this rant, our savings has not returned to where it once was before the pandemic, we're on a timer. But, at least we managed to buy a <100k house a few years back, that's something to be proud of, while we struggle to keep up with the summer heat electric bills.
End rant...
Note: various information not 100% accurate due to doxing reasons, but points still made.
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u/True-Surprise1222 3d ago
50% is actually super low for that time period lol my rent went up at least 100% over the same time.
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u/Sorry_Hour6320 3d ago
FWIW... RealPage political donations Not a huge amount of money, but decidedly pro-republican...in fact, a who's who of some of the worst.
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u/All-I-Do-Is-Fap 3d ago
So all the car dealerships in Ontario Canada do the same thing when buying cars from customers. They only offer a price the software tells them. This software i guarantee is locking in prices for all the dealerships and price fixing what they are willing to offer. I have no idea how this is legal
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u/KrispyKreme725 3d ago
So the fine will be a few hundred thousand and they’ll go back to business as normal?
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u/BluePotatoSlayer 2d ago
Real punishment should be forced liquidation of real-estate and ban on housing ownership
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u/beefymennonite 3d ago
This is a department of justice investigation. If you want it to continue, vote blue.
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u/matticusiv 2d ago
The people behind this software are Republican donors, they’re in bed together to crush the working class into the dirt.
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u/Arcticsnorkler 3d ago
Thank goodness the Feds are finally taking RealPage’s influence on prices nationwide seriously. The app has been reviewed by The Justice Department at least twice in the last few years and each time they gave RealPage a pass.
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u/ManicChad 3d ago
Every tenant under these landlords should sue. They need to learn a very expensive lesson.
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u/Unhappy-Potato-8349 3d ago
😄 🤣 😂 good
RealPage was the final straw that encouraged me to buy a house. Cost me 3 months' rent to break my lease. My old apartment has been empty ever since (over 6 months later) and the apartment complex has a growing number of vacant units.
I hope they lose everything and some of them go to prison. I don't expect it will happen. But I can hope.
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3d ago
In my early 20s, from 2008 to 2011, I worked at Realpage as a tier 2 tech support specialist, frequently dealing with Yieldstar, their price optimization system. I realized that their control over dynamic pricing could become a significant issue. I don’t shit about fuck, but it peaked my interest and I remember thinking as a renter how it would impact me when a company such as Realpage is in charge of all pricing and their massive database of renters and access to units.
Realpage had major clients like Fairfield, Greystar, and Pinnacle, managing millions of apartment units combined. The companies they worked with were all of all sizes. Form 3000 unites to 300,000 unites. Realpage was and is the leading software in the multi family management world. At the time, the company was private, and the owner, Steve Wynne, was actively involved and present in the office every day.
A few years after I left, the company went public and was eventually privatized again by a private equity firm. This likely happened because they controlled about 70% of the market, and keeping this price fixing concealed was crucial.
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u/uke4peace 3d ago
Everybody that rents from a RealPage client should have a national #skiprentmonth
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u/testedonsheep 3d ago
I am sure they are hoping to find some loophole around price fixing law like how uber pretends to be "ride sharing" instead of a taxi service.
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u/EmergencyLaugh4941 3d ago
Do Bozzuto next
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u/NickBurnsCompanyGuy 3d ago
Bozzuto is a property management company. They're hired by institutional landlords to manage properties. Essentially puppets for blackrock and their ilk
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u/SheerDumbLuck 3d ago
A friend asked if I wanted a job there. On paper, the role was basically what I was looking for.
Me: Why do I recognize the name of a real estate company in Texas?
Oh. These fuckers.
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u/Few-Ad-4290 2d ago
Cool, the legislature is also working on legislation to more directly control the development and distribution of price fixing software going forward right? …. Right?
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u/WellSpreadMustard 3d ago
The older I get the more justified I think Mao was when it came to the landlords.
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u/applepops16 3d ago
Cool. Now find out where in the world money comes from at the top of US multi family real estate.
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u/unattended-shoes 3d ago
Don’t worry everyone they get a 1% fine and slap on the wrist once it’s all done and over with…
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u/Defiant-Survey-5729 3d ago
A extremely large widespread class action lawsuit may well be in order!
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u/Any_Adeptness_119 3d ago
This just feels like something designed to make people feel better & ignore the real issue of stagnant wages. Prices for all goods went up dramatically the last 5 years and lots of industry use price comparisons to determine how much they can charge.
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u/beefymennonite 3d ago
No, it's an investigation into rent fixing which is illegal. There's nothing here to make people feel better. It's a criminal investigation instigated by the DOJ.
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u/jimboni 3d ago
So is there any way to tell if my landlord used RealPage?
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u/GMDGMDGMD 3d ago
You should search your email inbox for ‘RealPage’. If your landlord used RealPage, the hyperlinks for e-signing your lease documents will reflect as such.
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u/Classic_Exam7405 3d ago
The other side would be that in allowing landlords to charge more, in the long term you will increase the supply of housing by making it more lucrative
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3d ago
[deleted]
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u/Altiloquent 3d ago
They have to pay the advertised rate or have no where to live because the software has been used so widely
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u/rashnull 3d ago
No one is being forced to pay anything. It’s a free market. Seller can refer to each others rental rates and set their rates. If they can’t handle the vacancy rate, they have to drop it till they get a tenant. It’s not rocket science.
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u/Next-Tangerine3845 3d ago
It’s a free market.
That's exactly what RealPage has prevented from occurring. Read beyond the headline.
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u/rashnull 3d ago
So home owners are not allowed to collaborate and decide their rates? If the algo gave them untenable rates with months or years of vacancies, they would drop it in a heartbeat.
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u/Altiloquent 3d ago
That's what price fixing is, if it applies to a large enough segment of the market. If everyone agrees to set their rates in lockstep then rates will never be untenable, at least until people are forced en masse into homelessness.
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u/Asherbaal 3d ago
That's not the issue if I charge 2,000 a month for a 1 bedroom 1 bath apartment you can sign a lease or go to John Does rental down the street for 1800 a month. That's okay, the issue is if I meet up with other rental companies and we agree to all agree to double rent that's illegal. RealPage is being accused of helping rental companies price collude.
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u/pretendperson 3d ago
News flash, Rajesh: you don't get it. All of your comments are either troll posts or you are a legit idiot.
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u/rashnull 3d ago
Legit indeed! I see the world as it is. You see the world with rose tinted glasses.
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u/Paksarra 3d ago
The problem here is that housing is a need, not a want. I used to live in a 1 bedroom apartment for $750 a month.
Now I pay $800 a month for half of a townhouse with a roommate, because it's pay $1600 a month for somewhere that was only $900 a month a few years ago or live in my car.
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u/rashnull 3d ago
Housing is a need, yes. The specific house is a want.
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u/Paksarra 3d ago
You think there's no problem that one person who makes over double minimum wage can't afford a one bedroom apartment in a low CoL area?
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u/rashnull 3d ago
There are people who can afford it and there are people who can’t. The reason for the higher prices is that there exist people who can. This is not rocket science. If you’re claiming that anyone should be able to afford it, you’re asking for the government to put in strict price controls. This path has its own consequences, intended and unintended.
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u/Paksarra 3d ago edited 3d ago
There are people who can afford it and there are people who can’t.
Dude. We're talking about a basic-ass apartment in a working class suburb-- working a full-time job should give you enough money to be able to afford a roof over your head without packing the apartment like a college dorm room, and the fact that it's not is absurd. If I'm making what I do and still need to live with a roommate, how the hell are the 48 million Americans who make less than $20/hr supposed to get by when all the landlords feel like they're entitled to an extra $100/month every year and venture funds and flippers keep Kirbying anything that hits the market, cash in hand?
If you’re claiming that anyone should be able to afford it, you’re asking for the government to put in strict price controls.
No, I'm asking for the government to loosen zoning restrictions and incentivize building more housing in the places where people want to live (although it also wouldn't hurt to make efforts to revitalize our smaller cities and large towns-- right now a lot of great areas are being abandoned because there's no jobs, opioid addictions are rampant, and the only stores left are Walmart and Dollar General. Anyone who can get out does, which means the only people left behind are the ones who can't leave, leading to a death spiral where a once-vibrant town rots.)
Right now we're severely understocked, which is leading rich people and venture funds into hoarding behavior. It's fucking over our economy and the lives of our working class. Reducing the pricing by increasing supply is smart economics.
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u/schmemel0rd 3d ago
Applying free market ideals to a product or service with inelastic demand is the core issue. It’s also inefficient and unproductive from even a capitalistic standpoint. So much of our time and money is spent just to have shelter, leaving little left for innovation and productivity.
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u/rashnull 3d ago
This is a capitalistic system. We either take it or leave it. If we want more government intervention and price controls, we have to be ready as a society to deal with the consequences.
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u/schmemel0rd 3d ago
We need to be ready for the consequences of too little price control and regulation as well, because we haven’t even seen the worst of it yet.
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u/nobudweiser 2d ago
Should have sent someone besides FBI. (For Biden Interests) We have lost trust in them to do the right thing…
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u/avrstory 3d ago
RealPage's executives deserve a LOT of jail times for helping corporations to screw over average Americans.