Canadian mega landlord using AI 'pricing scheme' as it hikes rents
https://breachmedia.ca/canadian-mega-landlord-ai-pricing-scheme-hikes-rents/There are also people who can move to other locations.
If rents are up, you need more houses, it's really not that complicated.
The supply side has been imploded by government decree, leading inexorably to the current debacle. I personally know several builders closing down their businesses. Not for lack of demand, of course, but because construction has been made impossible by vacant-eyed bureaucrats.
Dear central planners and jr. totalitarians:
This self-imposed disaster won’t cease until you decide it’s time for it to be over. Or, keep voting as you have - your choice. You do you.
The article blames "AI" for raising rents, and then later says, "well actually, everyone raised rents".
You can have all the AI in the world, and even all the collusion you can manage, but competition still exists, raise rent to the point that people won't rent, you'll have an empty apartment. Lower it (i.e. ignore the collusion) and you'll fill that spot.
The law of Supply and Demand still works.
The only kind of collusion that might break that law is if landlords are forced by the agreement not to lower rent to compete.
It's really very simple: What's the vacancy rate? If it's low, prices are going up, it's as simple as that. Forget the boogeyman (AKA AI), build more houses.
The problem is on the supply side. It happens because of zoning restrictions. There actually is plenty of housing nationwide, but that isn't really usable because moving involves quite a bit of friction, as well as because of general market failures.
https://www.youtube.com/watch?v=3RSwkXbjaE0
And because it's constantly talked about by activists: rent control doesn't work. It actually reduces supply (because people who would offer apartments at the top end of the market drop out of the market) and liquidity (because people who do and don't already have a lease are treated differently). This is one of the best agreed-upon results in economics.
https://www.nmhc.org/research-insight/research-notes/2023/re... , among countless other links a basic search might turn up.
The complaint states:
> Across America, RealPage sells landlords commercial revenue management software. RealPage develops, markets, and sells this software to enable landlords to sidestep vigorous competition to win renters’ business. Landlords, who would otherwise be competing with each other, submit on a daily basis their competitively sensitive information to RealPage. This nonpublic, material, and granular rental data includes, among other information, a landlord’s rental prices from executed leases, lease terms, and future occupancy. RealPage collects a broad swath of such data from competing landlords, combines it, and feeds it to an algorithm.
Based on this process and algorithm, RealPage provides daily, near realtime pricing “recommendations” back to competing landlords. These recommendations are based on the sensitive information of their rivals. But these are more than just “recommendations.” Because, in its own words, a “rising tide raises all ships,” RealPage monitors compliance by landlords to its recommendations. RealPage also reviews and weighs in on landlords’ other policies, including trying to—and often succeeding in— ending renter-friendly concessions (like a free month’s rent or waived fees) to attract or retain renters. A significant number of landlords then effectively agree to outsource their pricing function to RealPage with auto acceptance or other settings such that RealPage as a middleman, and not the free market, determines the price that a renter will pay. Competing landlords choose to share their information with RealPage to “eliminate the guessing game” about what their competitors are doing and ultimately take instructions from RealPage on how to make business decisions to “optimize”—or in reality, maximize—rents.