FINALLY! Anti-trust Rental Price-fixing Lawsuit Filed In Seattle (people, allowed)

[LookinForMayberry]

Originally Posted by jabogitlu

Totally! This is why we should nationalize housing.

Great idea. Not.
Unless you were joking, think about that for a minute. We live in a capitalist democracy where citzens live under the constitution, the bill of rights, and associated laws on the federal, state, county and municipal levels. We have states' rights.

Even if it was a good idea, and it is not, could you imagine getting your proposal passed through all levels?

As citizens, we have property rights, and renting property is a business, conducted under contracts, under torte law. Restrictions on our property rights will inevitably go through the various courts, once the city over reaches far enough to hit someone with pockets deep enough to take it up through to SCOTUS. Or, pehaps Rental Housing Association will start a class action suit against the city. At any rate, the city will end up paying.

Meanwhile, as I said earlier, this case won't fly.

[CrazyDonkey]

Department of Justice opens investigation into real estate tech company accused of collusion with landlords:

https://www.popsci.com/technology/do...ech-landlords/

The Department of Justice’s Antitrust Division has opened an investigation into whether rent-setting software made by a Texas-based real estate tech company is facilitating collusion among landlords, according to a source with knowledge of the matter.

The inquiry is being launched as questions have arisen about a 2017 merger between RealPage and its largest pricing competitor. The source told ProPublica some DOJ staff raised concerns about the merger but were overridden by political appointees of former President Donald Trump.

Congressional leaders have pushed for an investigation into RealPage in three letters to the DOJ and the Federal Trade Commission, which were sent after a ProPublica report on the software’s use in mid-October.

The letters raised concerns that RealPage’s pricing software could be pushing rents above competitive levels and allowing big landlords to coordinate their pricing in violation of federal antitrust laws.

“We are concerned that the use of this rate setting software essentially amounts to a cartel to artificially inflate rental rates in multifamily residential buildings,” three senators said in a letter in early November. They included Sen. Amy Klobuchar, the Minnesota Democrat who chairs the Senate Subcommittee on Competition Policy, Antitrust and Consumer Rights.

[MechAndy]

I am for affordable housing for some.
San Francisco allots a few of these units in some of the new large unit places.
These are for some that qualify like low income or government employees like teachers and such.
This is cool with me.

What’s not cool with me is rent control.
I know some people from both sides of that coin.
It is a robbery of your rights imo.
One of my buddies pays $900 in the Haight.
How is that fair for others , like his landlord?
This goofball even rents it out by the week when he goes to Hawaii and gets a free vacation on the landlords dime.

Lots of landlords took the Covid hit.
Some say they were totally reimbursed it I’m not buying that.
It may sound good but it really not true or at least not true to those that had to dump their nest egg for pennies on the dollar.

If we are a capitalistic society we should let market rate determine the price.
I don’t think there is enough collusion to make it wrong.
Great point about the automobile industry.

[CrazyDonkey]

How does this have anything to do with "rent control"? It's about illegal price-fixing.

[Ruth4Truth]

Originally Posted by MechAndy

I am for affordable housing for some.
San Francisco allots a few of these units in some of the new large unit places.
These are for some that qualify like low income or government employees like teachers and such.
This is cool with me.

What’s not cool with me is rent control.
I know some people from both sides of that coin.
It is a robbery of your rights imo.
One of my buddies pays $900 in the Haight.
How is that fair for others , like his landlord?
This goofball even rents it out by the week when he goes to Hawaii and gets a free vacation on the landlords dime.

Lots of landlords took the Covid hit.
Some say they were totally reimbursed it I’m not buying that.
It may sound good but it really not true or at least not true to those that had to dump their nest egg for pennies on the dollar.

If we are a capitalistic society we should let market rate determine the price.
I don’t think there is enough collusion to make it wrong.
Great point about the automobile industry.

That's why there's a lawsuit; the REIT's are artificially setting what they consider to be "market rate", rather than allowing supply-and-demand to do it. When their buildings are chronically only partially occupied, month after month, year after year, mysteriously the rents don't come down.

Someone finally noticed, and thanks to a couple of whistleblowers working for the REIT's, we're off and running with an anti-trust case. Oh, happy day!

[oregonwoodsmoke]

Originally Posted by Ruth4Truth

That's why there's a lawsuit; the REIT's are artificially setting what they consider to be "market rate", rather than allowing supply-and-demand to do it.!

With 8% of rentals, they can't fix market rate. If the rent is too high, the other 92% of landlords will lower rent until they find the point where they can fill their rentals. The other 92% of landlords are not going to keep their places vacant because a REIT thinks the rent could be higher. Rent drops fast if no tenants are available at the asking price.

If no one is dropping rents, that means that rents are at market rate.

[MechAndy]

^ This was and is my thinking as well.
In my opinion anything else is rent control.

[CrazyDonkey]

Originally Posted by oregonwoodsmoke

With 8% of rentals, they can't fix market rate.

In many major rental markets across the U.S., a handful of property management firms colluding with the same software, to share market data and pricing recommendations, control up to 70% or more of the market. In other words, if 30% of people might want to move due to escalating rents, the number of available units available to them in their area that aren't using the software to collude on setting artificially high rents could be many times smaller.

[CrazyDonkey]

Originally Posted by jabogitlu

Totally! This is why we should nationalize housing.

The basic problem is not high rental and real estate prices, but low wages:

But despite the strong labor market [in 2018], wage growth has lagged economists’ expectations. In fact, despite some ups and downs over the past several decades, today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago. And what wage gains there have been have mostly flowed to the highest-paid tier of workers....

After adjusting for inflation, however, today’s average hourly wage has just about the same purchasing power it did in 1978, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today.

https://www.pewresearch.org/fact-tan...d-for-decades/

In 1978, I was paying $75/mo for a one-bedroom apartment on Capitol Hill that had likely been built in the 1920s. What has followed is 40-some years of Republican-led "union-busting".

The reality is that private investors today cannot profitably build apartments that would be affordable for the average worker. $22.65*/hr x 40 = $906/wk x 52 = $47,112/yr x .30 = $14,134 / 12 = $1,178/mo rent. The number of apartments (500sf+) currently renting for $1,178 or less in Seattle = 7. If we remove the 500sf stipulation, that number jumps to 79 - 10 (income restricted) = 69 (out of 2,655 total apartment listings, according to Zillow).

* Average wage for 2018.

So, what to do? Obviously, just jumping up wages by 50%, say, would be counter-productive since it would increase inflation by close to that amount.

We could progressively raise the minimum wage in high COL areas and nationally by that amount over ten years, which would help to minimize the impact on inflation (or the cost of a burger, fries, and a shake).

We could increase the earned income tax credit by that amount, but that would not benefit individuals who receive their income due to retirement or disability, since that income is not "earned".

We could increase the number of subsidized units by 50% over ten years. According to AptFinder.org, there are currently 152 properties offering subsidized apartments in Seattle, but 110 of them require a Section 8 Tenant-based voucher, which means that only 42 (28%) are available to people without a voucher. The waiting list for Section 8 Tenant-Based Vouchers, however, has been closed since 2017 in Seattle, so we would also need to increase subsidy availability.

We could implement universal "basic income" to make up the difference, but would need it to be "paid for" by taxes to avoid inflation. That would be a BIG bill.

We could incentivize the private market to build "affordable" units more than we already are through tax credits to landlords. These currently account for ~50% (70 out of 152) of such properties listed by AptFinder.org, but might lower an $1,800 studio to only $1,375 for those who income-qualify ("below 60% Adjusted monthly income for Seattle").

[Ruth4Truth]

Originally Posted by CrazyDonkey

The basic problem is not high rental and real estate prices, but low wages:





https://www.pewresearch.org/fact-tan...d-for-decades/

In 1978, I was paying $75/mo for a one-bedroom apartment on Capitol Hill that had likely been built in the 1920s. What has followed is 40-some years of Republican-led "union-busting".

The reality is that private investors today cannot profitably build apartments that would be affordable for the average worker. $22.65*/hr x 40 = $906/wk x 52 = $47,112/yr x .30 = $14,134 / 12 = $1,178/mo rent. The number of apartments (500sf+) currently renting for $1,178 or less in Seattle = 7. If we remove the 500sf stipulation, that number jumps to 79 - 10 (income restricted) = 69 (out of 2,655 total apartment listings, according to Zillow).

* Average wage for 2018.

So, what to do? Obviously, just jumping up wages by 50%, say, would be counter-productive since it would increase inflation by close to that amount.

We could progressively raise the minimum wage in high COL areas and nationally by that amount over ten years, which would help to minimize the impact on inflation (or the cost of a burger, fries, and a shake).

We could increase the earned income tax credit by that amount, but that would not benefit individuals who receive their income due to retirement or disability, since that income is not "earned".

We could increase the number of subsidized units by 50% over ten years. According to AptFinder.org, there are currently 152 properties offering subsidized apartments in Seattle, but 110 of them require a Section 8 Tenant-based voucher, which means that only 42 (28%) are available to people without a voucher. The waiting list for Section 8 Tenant-Based Vouchers, however, has been closed since 2017 in Seattle, so we would also need to increase subsidy availability.

We could implement universal "basic income" to make up the difference, but would need it to be "paid for" by taxes to avoid inflation. That would be a BIG bill.

We could incentivize the private market to build "affordable" units more than we already are through tax credits to landlords. These currently account for ~50% (70 out of 152) of such properties listed by AptFinder.org, but might lower an $1,800 studio to only $1,375 for those who income-qualify ("below 60% Adjusted monthly income for Seattle").

Meanwhile, in the U District back then, people were paying $100/mo. or more for a 1-br., from what several people have told me, who were living there at the time. $90 back in the mid-70's, and $50 for a room in a shared house.

Good post, I only saw it now.


No updates on the lawsuit. Here are some details as to the "price-fixing" allegations:

The lawsuit alleges that, “leasing giants began to work together to increase lease prices for Seattle renters. Instead of using an independent pricing metric and supply decisions, they agreed to use a third-party pricing and data collection service, RealPage, to make unit-specific lease adjustments.”

RealPage owns software that uses an algorithm and analyzes data to suggest rent prices.

The price-fixing affected the central neighborhoods of Seattle, including Capitol Hill, the Central District, South Lake Union and Queen Anne, which include most of the city’s densest neighborhoods, according to the lawsuit.

10 companies are accused of price-fixing among themselves, and since they control a large portion of the rentals in some of Seattle's highest-density areas, the case qualifies as an anti-trust matter.
https://www.competitionpolicyinterna...-price-fixing/