Anything that provides information makes a market run smoother.
In a healthy market, where supply can increase to meet demand, better information decreases prices. As it stands, with most states having regulations that severely limit housing supply, prices will keep increasing until birthrates drop or the rate of people moving out increases.
The politicians that pass those policies are to blame, and any pricing information is just the messenger.
If rents go down, as they should, you won't have people flooding into new construction unless it's cheap.
You're not wrong about it being a housing supply issue, but it's not because we don't have enough - it's because this software-facilitated rental price fixing and collusion scheme allowed a few individual property management companies to take over 80% of a market, raising prices so far above valuation that they could warehouse more than 20% of those rentals while still meeting their repayment obligations, artificially pushing people into houses, which private equity had also been investing into. It was the biggest scam of the century.
Supply doesn't imply mere existence, otherwise someone could just claim all the gold in the sun was theirs. In this case, the demand was for "affordable housing", and the supply was artificially constrained so that mortgages became more affordable than rent.
And who are the customers of mortgages? Largely wealthy pensioners. Blame them, not the feds (for housing, at least... it's not a federal power). Hell, blame the local homeowners that voted to zone out new construction, MFDs, manufactured housing, or anything that might allow any transient or poverty associated person into their schools and communities.
Except that it's not just "providing information" as it does not supply information to both the buyer and the seller. In a stock market, both the buyer and seller see the range between bid and ask, and historic prices are readily accessible. That is very much not what RealPage was doing, as it exclusively focused on providing pricing information for landlords from other landlords, enabling them to collectively increase prices without informing renters.
I don't have issue if the parameters the pricing operates is transparent and reviewed by government. e.g. What what you pay as tax depends on 100s of different factors.
I think the incentives are completely clear, it’s about maximising $$$, profit, returns.
People are not making mistakes, it’s a conscious effort to increase profit as much as possible. The only mistakes is allowing this to exist and not regulating it out of existence.
What’s wrong with the used car market? Prices are basically a commodity. https://www.cargurus.com/ aggregates national prices and makes price discovery a breeze.
“The big picture: The U.S. is in the grips of a housing affordability crisis — creating huge financial headaches for many Americans”
This is just not true. Talking point being pushed by some group, I’m guessing those lobbying for subsidized housing programs.
There’s an “affordability crisis” for ultra desirable locations, but across most of America, there’s plenty of underwhelming but functional housing to be had.
It's the truth. The US is near the all-time high record high number of housing units per capita. We'll likely exceed it some time within the next 2 years.
There is absolutely no housing crisis of any kind. There is a _density_ crisis, that is forcing people into unaffordable locations.
> The US is near the all-time high record high number of housing units per capita.
And that would be a reasonable thing to say if housing was a national issue, but it's not. It's always been a local and regional issue.
The United States does not benefit by moving people into decrepit houses in the Midwest. People should live where there are jobs and opportunities - they should CHOOSE where they live.
The individual regions of the United States with extreme housing prices are NOT near record housing per capita levels. They've dramatically underbuilt compared to how they've grown.
> There is absolutely no housing crisis of any kind. There is a _density_ crisis, that is forcing people into unaffordable locations.
Any kind of regional issue is a "density crisis" by this logic. Shortage of plumbers? "Density crisis." Hurricane hit the town and now a lot of people need to be rescued? "Density crisis." Sewer line burst and now it smells? "Density crisis."
This is a shortage of housing where people need it. If your entire point rests on you pretending "housing shortage" means something else, well... that's not very convincing.
In a nutshell, people paying super high rents in elite locations believe there’s a housing shortage and believe they should get assistance for living in super desirable locations.
Calling it a crisis is disingenuous at best. Specifically calling a “affordability crisis” instead of “availability crisis” is telling. People being unwilling to live with a roommate(s) is the biggest driver here. Rent controls are also a significant factor driving market imbalances. Yes of course growing areas need more housing, but it’s not a crisis.
Disagree with algos being problematic. The crux of the issue is that vacancy needs to be taxed on rental units in high demand areas when its above a certain threshold.
The problem is not simply the use of algorithms. The problem is that the algorithm is coordinating prices for a large percentage of rented properties. It's effectively a cartel.
That's fine, if apartments are too expensive for people and landlords are penalized heavily, then the rent will come down otherwise landlords will be underwater. If tenants are still moving inspite of the high prices, then the price is probably right.
You can see the same thing starting to happen in the domain industry. Registries are buying pricing data rather than setting their own prices, so high-value keywords end up having the same price across TLDs that should be competing with each other.
If there are enough units, there’s no need for extra taxation on vacant units as it becomes a self-correcting problem (or someone pays a whack of property tax while consuming less than the proportional services, meaning they’re subsidizing others).
There is a strong negative correlation between vacancy rates and rent, that would immediately deincentivise the new housing construction that actually leads to lower rental costs.
It's the simple reality: new construction that increases housing density in cities does NOT lead to lower rental costs. The best results are one-time single-digit percentage decreases in rents immediately near the new construction.
Readit News
In a healthy market, where supply can increase to meet demand, better information decreases prices. As it stands, with most states having regulations that severely limit housing supply, prices will keep increasing until birthrates drop or the rate of people moving out increases.
The politicians that pass those policies are to blame, and any pricing information is just the messenger.
This is not necessarily true. Market failure can occur due to information which is provided asymmetrically or which facilitates collusion.
This software is very clearly price-fixing, but in a world with more housing it should be next to impossible to do that effectively.
You're not wrong about it being a housing supply issue, but it's not because we don't have enough - it's because this software-facilitated rental price fixing and collusion scheme allowed a few individual property management companies to take over 80% of a market, raising prices so far above valuation that they could warehouse more than 20% of those rentals while still meeting their repayment obligations, artificially pushing people into houses, which private equity had also been investing into. It was the biggest scam of the century.
Supply doesn't imply mere existence, otherwise someone could just claim all the gold in the sun was theirs. In this case, the demand was for "affordable housing", and the supply was artificially constrained so that mortgages became more affordable than rent.
And who are the customers of mortgages? Largely wealthy pensioners. Blame them, not the feds (for housing, at least... it's not a federal power). Hell, blame the local homeowners that voted to zone out new construction, MFDs, manufactured housing, or anything that might allow any transient or poverty associated person into their schools and communities.
Is this a defense of cartels?
"We're not fixing prices, we're merely sharing information"
The Behind the Bastards podcast on this topic is quite informative; see: https://www.iheart.com/podcast/105-behind-the-bastards-29236... .
Depends. If the information provider is also a middle man that profits from manipulating the information, then that can unbalance the market.
E.g: if renters pay through realpage, then the incentive for realpage is to increase the prices to collect more fees.
DOJ sues realpage for algorithmic pricing scheme that harms renters
https://news.ycombinator.com/item?id=41330007
At the same time, It's worth digging deeper and asking questions as to why/how we are repeating mistakes.
By that, I mean, We have seen historically, 'oopsies' and/or 'problematic patterns' around 'automated trading' and feedback loops that can result.
TBH we are likely seeing similar impact in used car market.
Possibly all done by people who couldn't hack it in algorithimic automated trading...
To hapless tenants, it is a negative. They're the _victims_ of the algorithm, not the users.
People are not making mistakes, it’s a conscious effort to increase profit as much as possible. The only mistakes is allowing this to exist and not regulating it out of existence.
perfect competition in open market is supposed to push all profits to zero, maximizing value for consumers
Landlords Are Using AI to Raise Rents
https://news.ycombinator.com/item?id=42353948
If they'd noticed (& done something about it) a few years ago, then Joe might not be facing eviction now.
This is just not true. Talking point being pushed by some group, I’m guessing those lobbying for subsidized housing programs.
There’s an “affordability crisis” for ultra desirable locations, but across most of America, there’s plenty of underwhelming but functional housing to be had.
Not many tech positions available in Huntington, WV.
It's the truth. The US is near the all-time high record high number of housing units per capita. We'll likely exceed it some time within the next 2 years.
There is absolutely no housing crisis of any kind. There is a _density_ crisis, that is forcing people into unaffordable locations.
And that would be a reasonable thing to say if housing was a national issue, but it's not. It's always been a local and regional issue.
The United States does not benefit by moving people into decrepit houses in the Midwest. People should live where there are jobs and opportunities - they should CHOOSE where they live.
The individual regions of the United States with extreme housing prices are NOT near record housing per capita levels. They've dramatically underbuilt compared to how they've grown.
> There is absolutely no housing crisis of any kind. There is a _density_ crisis, that is forcing people into unaffordable locations.
Any kind of regional issue is a "density crisis" by this logic. Shortage of plumbers? "Density crisis." Hurricane hit the town and now a lot of people need to be rescued? "Density crisis." Sewer line burst and now it smells? "Density crisis."
This is a shortage of housing where people need it. If your entire point rests on you pretending "housing shortage" means something else, well... that's not very convincing.
Calling it a crisis is disingenuous at best. Specifically calling a “affordability crisis” instead of “availability crisis” is telling. People being unwilling to live with a roommate(s) is the biggest driver here. Rent controls are also a significant factor driving market imbalances. Yes of course growing areas need more housing, but it’s not a crisis.
If there are enough units, there’s no need for extra taxation on vacant units as it becomes a self-correcting problem (or someone pays a whack of property tax while consuming less than the proportional services, meaning they’re subsidizing others).
Yes, yes, supply-and-demand, market, blah blah blah.
It's the simple reality: new construction that increases housing density in cities does NOT lead to lower rental costs. The best results are one-time single-digit percentage decreases in rents immediately near the new construction.