Couldn’t they just run the algorithm-based collusion better and overcome any supply challenge? That seems to be the game plan for commercial real estate.

This is just not how it works in current world. Your world model is off if you think this is a significant contributor to macroscale high rents.

By setting prices the algorithm is in direct control of the portion of supply that is available to meet the demand.

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.

This isn't an example of happenstance or an isolated actor in a vacuum upending "market forces". Private equity has been pumping hundreds of billions into markets across the nation to intentionally and artificially capture and inflate hard asset values.

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.

There is no such thing as “supply and demand” in a market dominated by collusion.

My theory explains the price of housing in San Francisco vs Houston. An alternate theory would need to explain that big difference.

Supply and demand only works to lower prices in competitive markets.

The real estate market is huge - trillions of dollars. No one can corner that kind of market.

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?

But you don't need to. You just need to corner communities and exploit the fact people can't move our easily. Even in those communities, you just need to dominate the float, not the entire stock.

And there is such a thing as pricing power which enables certain actors to control prices without dominance, even then.