But the algorithm is simply not capable of creating San Francisco prices in Houston, because "supply and demand" carries more weight than the algorithm.
Even if you built additional 25% of more properties the algorithm can take 20% off the market with a single pricing decision for months before landlords decide the vaccancies are not worth it.
Buildings don't move, and they're already expensive. Software that enables and enforces price fixing across markets might have exacerbated temporary inelasticity by local zoning, high reliance on import building materials, and restrictions on certain materials or construction, but the system wasn't built to handle a single company with $10T in assets buying up the nation, let alone an industry around it.
Blaming anyone with an economy smaller than a nation state just doesn't explain the scale and timing of the effects.
Why is this happening in communities in the rural South where there's plenty of room to grow? Who's buying up minority communities, inflating prices so that home owners can't afford the tax increases, and then buying those properties from under them and renting them back at a higher rate? It's not anyone you who they'll ever meet at a local town hall or whose home they can march up to to protest, that's for certain.
Like I keep pointing out: if they're so good at raising the prices by more than a percentage point or two, why aren't they jacking up Houston prices to San Francisco prices?
And there is such a thing as pricing power which enables certain actors to control prices without dominance, even then.
Hiding behind an algorithm seems unlikely to work now that there's blood in the water from the recent Realtor lawsuits.
The FTC posted an article about algorithmic price fixing not too long ago too.
Rent overrides required written business justifications, would often trigger follow ups to the agent attempting the override and then their management to dissuade them, and eventually might be refused in the end.
Realpage monitored compliance of customers using their provided prices and those who didn’t meet a certain level would be kicked off the platform.
Pages 17-22 here: https://oag.dc.gov/sites/default/files/2023-11/DC%20OAG%20Re...
This part jumps out:
> the landlord’s regional manager
Why would the owner of a property have a regional manager? That makes it sound like they're deliberately conflating local property managers with actual landlords. I suppose if the actual landlords are passive REIT investors, then there's still a possibility of actual collusion.
In this game theory setup, breaking from the cartel only pays off with excess supply (long vacancies, new units you could lease), which is fairly atypical especially bc of regulatory hurdles. If the market is supply constrained, being part of a cartel maximizes profits. Over longer periods, a competitor could increase supply and inject some dynamism that rewards breaking from the cartel, but for urban/suburban apartment complexes, this is long time and of limited effect to the cartel's pricing power.
This is why the FTC exists to prevent this type of illegal coordination (bc it's so attractive to profits!)
Edit: typo
I agree there's a lot of other barriers to fixing housing! But the algorithmically-driven collusion here is off the wall crazy town. Zero accountability for what would have wrecked any entity doing the same a couple years ago.