From 2020-2024, rent prices spiked by a third. How much of that is due to collusion by corporate landlords and a software coordinator? And where is the Fed?
Late last month, the Department of Justice filed a complaint against a software and consulting firm called RealPage, alleging a broad conspiracy among corporate landlords to increase rents to millions nationwide. RealPage sold software and services to large real estate management firms, which in aggregate control rents for 16 million units nationwide, which is a not small fraction (36%) of the 44 million renting households in America.
This alleged conspiracy matters for a lot of reasons, but the most important one being that housing costs are a crisis in America. Last week, the government released statistics showing that rent went up by 5% over the past twelve months, and that the cost of shelter accounts for 70% of all inflation for the last twelve months. The CPI matters, because the key price control agency in the economy, the Federal Reserve, sets prices for credit and loans based on this data, rationing credit to, say, small businesses based on what its economists think about how that will affect demand. Higher rent prices, in other words, are not just a problem for families trying to get shelter, but are actually impacting macro-economic policies for the entire economy, shifting the cost of financing every city, factory, airplane, credit card, et al.
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This scam was first exposed by ProPublica nearly two years ago.
It’s another killer app for the cloud. CaaS. Collusion as a Service.
WTH
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Would collusion be “protected free speech”, or “protected free assembly”? Bet you could find 4 or 5 on SCOTUS who would agree?
Steve
https://www.msn.com/en-us/money/realestate/homeless-population-grows-putting-u-s-on-track-for-another-record/ar-AA1qWEv7
The number of homeless people in the U.S. continues to grow, putting the country on pace to hit yet another record high this year.
Counts from encampments, streets, and shelters are largely higher than they were in 2023, according to preliminary data collected and reviewed by The Wall Street Journal.
the U.S. is likely to top the roughly 653,000 homeless people estimated in 2023—the highest number since the government started reporting comparable data in 2007.
Tidbit on the news a while back: 40-60% of the homeless have jobs. They can’t afford the price of housing on what they are paid.
Steve
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It’s not just apartment rents. FTC Chair Lina Khan is going after Grocery Stores and Pharmacy Benefit Managers PBMs), too. Greed-Flation is an actual thing caused by lack of antitrust enforcement.
They’re doing a story about on “60 Minutes” Sunday.
intercst
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Yep. Where I live we’re giving millions of dollars of tax subsidies to real estate developers to build apartments that require an income at the 40th percentile and above to rent (about $85,000/yr) And three unrelated kids earning $30,000/yr., each, can’t team up to rent one.
Where are the people earning less than $85,000 supposed to live? Crony Capitalism has yet to come forward with a solution.
intercst
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I just learned, there is a name for the shanty towns that surround some South American cities: villa miseria. Get rid of all the “burdensome, big gummit, building codes, that make housing more expensive”, and USians too can live in squalid shacks.
/sarcasm
Steve
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Dynamic pricing on steroids - integrate information your “competitors” contribute.
Price fixing is a harsh term though, the company makes it sound so much better - mitigate that pesky downside of capitalism. Mounting a legal defense could be a challenge:
A RealPage executive observed that its products help landlords avoid competing on the merits, noting that “there is greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down.”
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Too busy doing the Pay 2 Play political shenanigans.