[mattmaroon]

This is a good example of why most people don’t belong in politics or management.

You’re basically saying that because this violates your code of ethics, it should be punished by the legal system wherever or not they’ve actually broken a law. So the system of laws is meaningless, what’s important is how you feel, and your moral code.

And I get it, we probably all feel this way on some level. But I’m glad society doesn’t operate that way.

[ok_dad]

This software is collusion, and anyone using it today should be penalized. I don’t care what excuse they have, it’s clear to someone with half a brain (most landlords have at least half) should realize software that fixes prices for you based on local demand is going to be collusion. It’s pretty clear how that stuff works, the only unclear thing is if there is a loophole or judge which will let the landlords off in favor of the zombie economy over actual humans.

[arcticbull]

The collusion here is what, that they all agreed to use the same software?

What if I create software that recommends rates to charge, and I market it. Proven to get you up to 20% or more extra rental income! Then everyone just happens to use my software, and the rates are then 'recommended' to everyone based on an analysis of what the market will bear. No collusion. Is a law broken in this case? Or is the market just lacking in competition.

The software isn't making landlords do anything, it's recommending an optimal market price. Is it any different than a quote from a commodities futures exchange being used to price corn at the local grocery store?

[anigbrowl]

Then everyone just happens to use my software

knowing what it does, yes that is collusion. Look at the etymology of the word: it literally means 'playing together'. It doesn't require people to meet up in a smoke filled room in supervillain outfits and say 'let's collude, heh heh heh'. Everyone is sharing their rental data to help the software calculate the optimal price, and everyone wants to get extra rental income, per your scenario. The diffrence from the commodity exchange is that exchange operators are not promising specific price outcomes for commodities.

[arrosenberg]

The whole point of pro-competition laws is to stop large corporations or a cartel from using market power to control pricing, which is the scheme you just laid out. So, yes, that would be illegal. You can say "no collusion", but you (the operator) have effectively organized a cartel. Each individual landlord may escape liability, but you will not.

Commodities exchanges (I believe) work on a competitive bidding system, which is basically the opposite - you have willing buyers and sellers with roughly equal power/information.

[arcticbull]

> The whole point of pro-competition laws is to stop large corporations or a cartel from using market power to control pricing, which is the scheme you just laid out. So, yes, that would be illegal.

How is a Zestimate or Redfin home value estimate legal then? Or a Redfin rental estimate? [1] Would it become illegal - or a cartel - if too many people started using it to set rents?

Should we forbid tools to help landlords figure out how much their places should rent for?

[1] https://www.redfin.com/rental-estimate

[arrosenberg]

It might be. RealPage's definitely is because they've clearly accrued market power in order to control pricing. In Redfin's case it seems like more of a marketing gimmick, but if you could prove it had a meaningful effect on driving prices up, then yes, the FTC should order its' removal.

> Should we forbid tools to help landlords figure out how much their places should rent for?

It depends? Playing moneyball (i.e. charging the maximum the market will bear without a serious, violent response) with a necessity like rent should be illegal, and many of these tools seem designed to do that using market power, which is explicitly illegal. If the tool just gave some local averages based on things like amenities, that might be ok.

[sinistersnare]

Yes, if it causes harm to people. Being a landlord is a job (so I'm told), do some math, figure out how much is fair (cost:labor calculation) then ask on the open market if people want to pay that. The problem is that the underlying system here did NOT do this calculation, hence price-gouging. It is the lack of free market that is the problem, thanks to this price centralization.

[cscurmudgeon]

Collusion requires intent to collude. If they knew using the software was collusion and willingly used it, then only it is collusion.

[mattmaroon]

It’s not collusion if the landlords don’t know it is price fixing and they really may not. Collusion definitely requires mens rea.

[sinistersnare]

Today, we punish people by taking away their money. Taking away someones money should not doom people to poverty over this kind of stuff! I am not saying kill all landlords here. I am saying that the landlords profited too much and it must be made fair.

There should be no 'punishment' of the landlords truly, I am saying we make a system where landlords can not unjustly profit from us (and I do speak generally here).

Stuff like this is what causes the housing crisis, it must be dealt with systemically, not by giving a few people none-the-wiser a lesser life.

[arcticbull]

> I am saying that the landlords profited too much and it must be made fair.

There's for better or worse no law against 'too much profit' in the general case. How would one define 'too much'? A certain margin? That has historically led to merchants increasing their costs so they can profit more in absolute terms once the relative profit cap is met.

Seems like the answer is just to allow more construction and densification, which in turn creates a more competitive market for housing. If they then tried to aggregate, roll-up and collude they would fall under the Sherman act no?

[mistermann]

> Seems like the answer is just to allow more construction and densification

The system very often doesn't actually support that in fact, so I don't find it a particularly compelling argument.

Sometimes systems suck from the get go, sometimes they degrade over time. Some of us are getting tired of the heads I win tails you lose "democracy" magic show, and the runtime we are in supports recourse outside of the "agreed upon" (wink wink) legal conventions, and I suspect it is more of a coordination problem than a consensus or will problem.

[sinistersnare]

Well the problem is that with these software systems, we have already answered your question. If we do not change something (after seeing this!) then we have allowed 'dumb' collusion. Where these landlords can profit exceedingly and then claim complete innocence.

The landlords see their rent prices increase in their checks each month, it is not as if they have not noticed increased profit over the last years due to this.

So if this is allowed, we will start to see increased centralization and then passive acquiescence to gross profit.

[arcticbull]

> Where these landlords can profit exceedingly and then claim complete innocence.

Define 'exceedingly.'

> So if this is allowed, we will start to see increased centralization and then passive acquiescence to gross profit.

The market is already fairly efficient, except where laws like rent control forbid market efficiency.

The issue is that while demand exceeds supply of housing in metro areas, the cost to acquire/rent will tend towards the maximum amount a renter/buyer can bear. On the other hand, when supply exceeds demand, it tends towards the cost of construction.

This software just makes the market more efficient in the same direction it was already heading.

More houses solves this. Suing the pricing tool for existing does not.

[sinistersnare]

To define exceedingly. Well I guess I just see this as a natural partner in the housing crisis. To combat things like this is to help solve the housing problem today. The prices are not going up like this because there are too many people, the prices are going up because of economic centralization.

[arcticbull]

> The prices are not going up like this because there are too many people, the prices are going up because of economic centralization.

Well no, they're going up because there's not enough houses near the jobs. Studies show the US is short 2-6,000,000 homes. Until that changes, prices will only keep going up. The centralization here is making it move faster than it otherwise would but the bounds and direction remain unchanged.

[mistermann]

> The market is already fairly efficient

Please translate "fairly efficient" into percentage terms. Also, what instrument are you using to perform your measurements?

[anigbrowl]

Oh please, you're ignoring contrary evidence, like the fact that landlords were using the existence of new housing as a justification for raising their own prices in order to stay 'competitive' (in terms of profit, rather than in terms of price). There's a simple and easily understood argument about why the behavior is illegal and anticompetitive.

Coming in and harassing people for definitions and quoting economics 101 while ignoring the empirical evidence isn't a good way to discuss an issue.

[enterprise_cog]

It does operate that way, whether you want to believe it or not. Every political decision is influenced or directly related to the ideology of those in power.

Funny how feelings are brought up and mocked when it’s about the disenfranchised. Meanwhile, the ruling elite gets their fee fees hurt by socialists and it’s how it should be.

Strange, isn’t it?