RealPage rent-pricing case wraps with nearly $360M to renters
multifamilydive.com
multifamilydive.com
Okay but Realpage has a decade of real pricing data that it can use to continue informing these rental companies and outside of them having extremely hard boundaries in their service this is just going to happen again.
This doesn’t do a whole lot to address the actual issue, and these companies aren’t going to stop colluding over a wrist slap like this.
Basically when somebody makes a pricing error on a decentralized cryptocurrency exchange there's a mob of automated arbitrage bots that try to trade against it. Who wins and actually gets to make the trade is mainly determined by how high of a transaction fee your bot is willing to pay.
You can win instantly by offering to trade with a transaction fee so high it almost wipes out all but a cent or two of the entire arbitrage profits, because nobody else will pay a higher fee.
Instead what happens is bots offer the lowest possible fee, then immediately increase their fee as soon as they see a competing bot try to take the trade with a higher fee. This results in the bot offering the highest fee changing every several milliseconds as the fee quickly grows.
The way Ethereum mining works, this results in the winning bot being randomly selected from among the set of bots "bidding" up the transaction fee: blocks are mined at random intervals of iirc about 20 seconds, and whoever had the highest bid at the time the next block is mined wins. <20 seconds of bidding is short enough that even with the bidding, the transaction fee doesn't get bid up particularly high, and the winner makes out with a highly profitable arbitrage trade.
By giving up a guaranteed win and instead rolling the dice against other bots, transaction fees stay low and everyone has a higher expected profit. It's coordination that happens without any communication between the participants and quite possibly the participants didn't realize they were in effect cooperating when they added the high speed bidding behavior to their bots.
This is like 1980s sawtooth algos in real finance.
A lot of crypto is former HF folks taking old strategies to a dumber field.
Yes. That’s a problem.
Landlords have an inherent trade off between holding out for a tenant who would pay a higher rent and not having the unit vacant in the meantime. Holding out for longer than that helps the other landlords at your expense. Meanwhile there are a large number of landlords, there is no way for the ones using a given system to force the others to do the same, and a significant percentage of them don't.
So if the system tells the landlords using it to do the thing that would increase rents if every landlord was using it, the "defectors" who don't use the system win out over anyone using it, which means using the system rather than defecting would cause you to lose money and everyone would have the incentive to defect.
Whereas if all the system is doing is suggesting the optimal point in the trade off between holding out for a higher paying tenant and renting the unit sooner, without assuming the other landlords are being required to use the same system, that's the same thing an individual landlord would do if they're not colluding.
The actual way landlords collude is through zoning boards, because then they have an enforcement mechanism, i.e. if someone is trying to defect by adding new units to alleviate the limited supply then the other landlords can sic the government on them, having passed the various laws against constructing those units there.
However, that's not a systematic method for lower prices. It just prevents individual cases of price gouging.
Alternatively we could keep the names private. A cryptographic solution would easily serve the need of authorities verifying the right person is in a place without identification, but good luck figuring out how to ensure the tenant has their keys somehow since in the US there are zero pieces of identification you can ensure every citizen has.
(Unless the other party to the contract deliberately asks you in the contract to keep it quiet. But that's something you need to actively agree to.)
There is enough turnover with new listings to find the market rate while preventing existing tenants from being screwed over by unreasonable prices.
Australia also almost entirely works off rentals owned by individuals who own 1-3 properties rather than corporate owners so no one landlord has any sway over the market.
I think this narrative is just meant to distract people from questioning the necessity of the landlord class, they want people angry at a faceless corporate boogieman instead of local landlords (for obvious reasons)
What else do you expect "collective bargaining" to do in a market where every tenant has a different landlord? Your landlord isn't going to care if the tenants of 10,000 other landlords threaten to move out. They only care if you threaten to move out, and then to credibly do that what you need is to show them the unit you could move into which is asking for less.
The real problem is that you need the unit you can threaten to move into to first exist, rather than its construction being inhibited by zoning etc.
Second, the historical database should be deleted. And if they can't survive that, so be it. Keeping the spoils of crime should be the crime. Justice still isn't finished.
Not clear to me that is the right approach, or if owning rentals should be more of a fixed income approach (or even speculative - profits only come from the sale of the property).
This actually works unless you inhibit the construction of new units. Naturally that's what we've been doing, which is why it isn't working. But the solution is to stop inhibiting the construction of new units.
Because the alternatives don't actually work. Unless you can build enough units to meet demand, there aren't enough units. Which means you either have high prices which suppress demand because people who can't afford them are forced out, or shortages because you're imposing some inadvisable price controls and then instead of being unable to get a unit because you can't afford the rent, you can't get a unit because they're all occupied and no one is adding more.
Adam Smith, The Wealth of Nations
Land ownership is the biggest business and the source of the biggest conspiracies.
If you have examples of such a company in other industries, please share.
Industry Companies
---------------- --------------------------------------
Apartments RealPage, Yardi, Rentana, Entrata
Hotels IDeaS, Duetto, RoomPriceGenie
Airlines PROS, Amadeus
Grocery Revionics, Yieldigo, Competera
Retail Pricefx, Omnia Retail, Wiser Solutions
E-commerce Prisync, Price2Spy, Intelligence Node
Manufacturing Zilliant, Vendavo
Vacation rentals PriceLabs, Beyond, Wheelhouse
Events/tickets DynamO Pricing, DigonexThese companies buying services from Radford are indirectly colluding through Radford, just like RealPage.
On that basis, the 'free market' should be called the 'free, competitive market' - without competition, it has little value. Businesses should be required to compete and to opeerate in competitive markets. Anything anti-competitive should be treated harshly.
(Seven has been experimentally determined, but I can't recall where.)
I can't quote the formula here, but HHI is, apparently, the sum of squared percentage market shares. Six equal-sized suppliers give an HHI of approximately 1,667, while seven give approximately 1,429—on opposite sides of the 2010 threshold.
Is that where you got the number?
> In assembling information to be collectively provided to purchasers, providers need to be aware of the potential antitrust consequences of information exchanges among competitors.
> the collection is managed by a third party (e.g., a purchaser, government agency, health care consultant, academic institution, or trade association);
> although current fee-related information may be provided to purchasers, any information that is shared among or is available to the competing providers furnishing the data must be more than three months old; and
> for any information that is available to the providers furnishing data, there are at least five providers reporting data upon which each disseminated statistic is based, no individual provider's data may represent more than 25 percent on a weighted basis of that statistic, and any information disseminated must be sufficiently aggregated such that it would not allow recipients to identify the prices charged by any individual provider.
> The conditions that must be met for an information exchange among providers to fall within the antitrust safety zone are intended to ensure that an exchange of price or cost data is not used by competing providers for discussion or coordination of provider prices or costs.
Damn. From 1996!
I'm not sure I understand where you are going with this? Are you suggesting that a new product cannot enter a market without a number of simultaneous competitors?
If I want to roll out fibre to an area that doesn't have it, can I? If I want to build a fresh-produce store in a town that doesn't have one, then I need to find someone else to compete with?
Lots and lots of businesses operate as quasi-monopolies if you look hard enough. Especially in smaller and rural environments. Lots and lots of places have one gas station, one mechanic, one vet, one doctor, one diner and so on.
Your use of the word "require" seems difficult to implement. What if no-one wants to compete with me? If Apple stops making Macs, does MS have to stop making Windows?
Housing needs to be decommodified. It needs to stop being a retirement plan. We need to stop letting people hoard it. We need to stop subsidizing exurbs and making it illegal to build the kind of walkable communities people actually like. Case in point: Red Vienna [1].
As another commenter noted, this is in every industry. Utilities are a particularly bad one including telcos. All the best ISPs in the US are municipally owned. Chattanooga was the first really big poster child for this.
Privatization of all these things is just rent-seeking behavior.
So many of society's problems come down to housing being too expensive. Anything that makes it expensive needs to be stamped out and that includes RealPage as well as Airbnb/VRBO.
Hint: it has an international airport :)
Your comment is so outrage-focused that I’m not inclined to help you make your argument. I largely agree with your point, but dialing back the rhetorical pathos would make it more persuasive.
This is a predictable outcome of commerce due to the limited supply of land and is described in some detail by Adam Smith and developed by later thinkers like Riccardo and George (who took it to its logical conclusion and inspired the board game Monopoly).
During the 20th century, economics was wholesale rewritten to blur the lines between land and capital so as to bury this awkward conversation.
The general recommendation of these early economists was taxing land - moderate in the case of Smith, up to 100% per George. This amounts to public ownership of part of the profits of land ownership.
Can’t wait to get like $300 out of this. /s