- cross-posted to:
- brainworms@lemm.ee
- cross-posted to:
- brainworms@lemm.ee
Summary
The U.S. Justice Department, joined by 10 states, has sued six major landlords and RealPage, a company behind a rent-setting algorithm, accusing them of colluding to keep rents high by sharing sensitive pricing data and avoiding competition.
The landlords, operating over 1.3 million units, allegedly used RealPage’s algorithm and coordination to align rents, exacerbating the housing crisis.
One landlord has agreed to cooperate with prosecutors.
Critics argue this scheme worsens affordability issues for renters, who already face record rent burdens amid a strained housing market.
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They should have a criminal charge for crimes against the economy. They did this to us. They made it this way. There needs to be tangible justice.
This was the point of the Reagan Revolution, the trickle down economics con, and the federalist society takeover that began under Reagan.
The owners spent decades removing accountability from the owners and any hope for accountability’s return under the current completely captured, warped, and owned constitutional framework.
There’s no voting our way out of this greed prison, as they own both major parties since Reagan. Want a just society? Move to a nation our government hasn’t yet coerced into becoming as bad as us, or help foment L style revolution for a new constitution and nation, this one is too captured for any rational hope.
Unless you think continuing to play this game will lead to a just society. Neoliberals are just the “good cop” in our illusion of choice. We have no vote on the shape or priorities of the economy we live in servitude of, only the social wedges the owners sow division amplifying with for profit media and captured political bully pulpits. “You hate them for being different! They hate you for being different! Fight! Don’t look up!”
It would be nice if they get a fine of 1.3 million housing units.
That’s a lot of social housing. It would put an absolutely amazing dent in homelessness and would help a lot of low income families.
The fine should be the ill-gained profits PLUS a penalty. If you rob the bank, you don’t get to keep the money when you get caught. Why should it be any different when they rob us?
See, this is part of why I agree with things like the corporate death penalty. A company will not care how much it is fined, unless that fine forces it to close. Our justice structure when it comes to actually dealing with corporate entities is WOEFULLY behind the times, and has been artificially kept so for decades. Besides, fining a company that was scheming to keep rents artificially high brings no benefits, nor relief to the actual tenants who were forced out because of high rents.
Fining companies seems to just be a way of getting more money from them.
Oh no! Not accusations! Anyway.
I’m not optimistic that this will go anywhere, particularly during a Trump administration.
I don’t understand how landlords can expect people to make “3x the rent requirement” when rents are going up as fast as they are.
I’ve got a decent job (in a high cost of living area) and I’m barely meeting that requirement.
It makes saving extraordinarily difficult because not much cash flow remains after all the other post-tax expenses.
That’s the point. Keep you scrambling. Can’t stop grinding for the oligarchy and capitalism, or the next place you’ll be sleeping is the streets.
Although at some point landlords have to realize the ceiling so that they can continue to rent units, because empty units is them losing money.
But we either need caps based on median income of the area, or some kind of renter collective that says nobody is going to pay rent on units in this area over $X price.
What we need is monthly fines for unfilled units, which are proportional to the rate being charged for the unit.
The problem twofold. First, property has been skyrocketing in value lately. You can practically buy an apartment and sit on it empty for a few years and flip it for a profit. There is very little pressure to actually fill a unit. Second, there is no mechanism to drive prices down.
We need to build a system that allows the price to rise with inflation, but also to fall with availability and demand.
Fine landlords for unfilled units. The fine is a proportion of their highest advertised rate for that unit. Now they have an incentive to fill that unit, make deals, and lower the price. The fines they pay go directly to subsidizing rent payments for low income renters, now they have extra buying power to get an apartment and off the street. We need to build systems that self balance/regulate.
Oh sweet summer child.
There is no ceiling! If 10 of us poors need to cram into a studio apartment to make ends meet, what does the landlord and corporations care? The justice department is already suing (until the 20th) the largest rental companies for collusion and price fixing. They are using algorithms to decide their occupancy rates. Turns out 100% occupancy isn’t the most profitable. They need constant turn over in order to keep rasing rates. People have to live somewhere and if all the companies are using the same algorithm isn’t obvious that 100% occupancy isn’t wise.
I understand that, but at some point they will hit a number where people in the area can’t afford the 1st month (or more) down or even monthly payments. And landlords aren’t going to just start waiving the down payment or rent up front as this whole thing is about them using algorithms to maximize income. So there is a ceiling, but they can of course collude on what that is and all match that ceiling so that it’s the only option (which I assume is what happened here). If they can then cause turnover once tenants are in place by prices breaking that ceiling they can keep down payments for breaking lease, then drop the price back to that ceiling for the next victim, rinse and repeat.
I understand that, but at some point they will hit a number where people in the area can’t afford the 1st month (or more) down or even monthly payments.
I lived in a place where that happened. There were very obvious changes as the rent kept going up. (I stayed because everywhere else was going up just as much.)
- Long-term tenants moved out.
- A lot more one bedrooms had roommates.
- People had less furniture. Sometimes just a mattress on the floor and a plastic chair.
- A lot more three-day notices and eviction notices on people’s doors.
- Some apartments turned into Airbnbs.
- One apartment turned, very not surreptitiously, into a “massage” place.
- More and more units stayed empty for months.
None of that stopped the rent from going up. If anything, it went up faster.
People think too small when it comes to stuff like this. One individual land lord company doing this isn’t a big deal. But when you scale that up to a national level? We’re talking about millions of homes going empty, misused, and siphoned off for only greed.
at some point they will hit a number where people in the area can’t afford the 1st month (or more) down or even monthly payments
this has already happened. google “homelessness”
Yes, but my point is that having empty units runs counter to the interests of landlords. Unless they can talk Trump’s regime into subsidizing them unhousing whole areas of people landlords still have a limit/ceiling on the amount of churn they can have and still rent units (make money).
It’s similar to the stories on Amazon not paying warehouse workers and working them like slaves, now their churn is so great they need to get robots because they are beginning to run out of bodies in areas.
Hey stop speculating and look up the case the DOJ made against them. And not just the cliffnotes. It explaines the practice way better than I could ever. But from what I remember the most profitable percentage of available units isn’t 0% but closer to 5%. Landlord companies don’t even need to do math and management of the housing; companies like Yardi and Rent Café does it all on their platform. One example was, a one year lease signed today is less valuable than a lease signed tomorrow or the next day… Due to inflation, scarcity, and all landlords playing the same game. Say I can rent out my apartment for $1000 a month today. But the Yardi algorithm says I can make $1100 a month if I wait 30 days to lease. Over the life of the lease I just made an extra $200 for nothing. Additionally you have one month less of potential maintenance. The algorithm knows how many leases in the area are ending and haven’t been renewed; how much housing is currently available; what businesses are opening up or closing down in the area; population growth/decline; and so many other data points that they know exactly how much to squeeze the population in any given area.
Housing is a human right. The only reason not everyone has it, is only because the wealthy and powerful want it that way for money.
your point is valid, but needs nuance. perhaps try:
having a significant surplus of units runs counter to the interests of landlords
what number defines “significant surplus” varies based on market but it’s higher than you are imagining i think? simply having some empty units does not make a surplus; most landlords are good enough at business to prevent their surplus from being too massive and keep their profits up.
But once they are getting enough money per apartment, having a few empty units doesn’t hurt them either. They do not have to operate at capacity to make a profit.
That’s probably advantageous for these giant companies as they can shoulder the losses with the volume of rentals they control. Mom and pop landlords might be forced to sell these properties due to the vacancies which means these large companies can swoop in, gobble these properties up, and keep raising rents.
Okay here’s how the business model works. And before we start, know that these numbers are estimates with the barest of research, the basic interaction is the same though. There’s a TL;DR, but how we get to where they can make these demands is important.
I need X amount of money for operations. That’s desk staff, maintenance, back room staff, property tax, the remodel fund, and executives. Once I cover that amount I’m good to go. Now lets say I have 100 units to rent and about a million in yearly expenses. I need to cover about 90k a month. So at an average rent of 1k I need to fill 90/100 units just to cover costs. This is obviously a situation that makes apartment complexes heavily compete for residents. Most people are moving in the late summer and having a bad move in season can mean cut backs during the entire year which then causes a death spiral as you can’t properly compete for residents in the next move in season.
So landlords are incentivized to find a higher average rent somehow. In the above situation they are forced to waive many move in requirements. But if they can operate in a pricing cartel they can raise prices without worrying about being undercut. If they can get average rents to 2k a month then they only need 45 apartments out of 100 filled to meet costs. Now they can’t just do that, most states have a max rent raise cap of 10 percent per year for tenants already there. This is where that remodel budget comes in. On average they’re going to remodel an apartment every 6 years, (15 apartments a year) So in 6 years your rent can go from 1,000 to 1,771. Then they’re going to remodel that unit and raise the price to 2,500 instead of 1,948.
In the same time period inflation will generally account for 2 percent a year, (we’re not going to include once in a lifetime events here). At 2 percent a year, and being extremely generous to meet inflation with raises in employee pay, that million turns into something like 1.1 million. meaning my monthly expenses are now ~91,500. but instead of heavy competition for units I can now meet cost with half of my complex unfilled.
TL;DR Once an apartment complex reaches the point where half the complex can be unfilled and they can still meet cost they can ask almost whatever they want for people to move in. They throw gilding and marble into their office and say only the best people are allowed to live in their 600 sq foot apartments with the shitty combined washer/dryer, no dishwasher, and nearly no storage space. (extra storage is available for a fee, near your unit for a higher fee) It’s merely a matter of how much money they want to finance buying more properties to add to their ability to manipulate prices. And that’s why they can demand you make 9,000 dollars a month in markets like San Diego. and if that’s too onerous they can always waive that requirement. They can even lower prices on a per tenant basis if they’re in the right kind of situation that requires it. Without a tenant union nobody knows if everyone is paying the listed price. So if they have a listed price of 3,200 and they have 95% of the income they want then they can easily offer a lower price to get that last 5%, just using a few more units.
The real problem people are missing is how far this can go. And it’s bad, like really bad. If we look at company towns we can see people went into debt to their employer for housing and food. Now imagine I own an apartment building, and I own the shops and counter serve food places at the bottom of the building. Once rents are high enough I can offer the “don’t go homeless deal”. You sign your paycheck over to me, I give you a reasonable stipend from it and you get 3 meals, and an apartment. Don’t worry about your car payment, we offer shuttle service to your job, the bus station, and the airport. In return you don’t go into debt and you don’t go homeless. As long as you have a job anyways.
I feel like this is too late to have any impact. Should have done this a year ago. May have even helped with the Biden reelection campaign.
All six have Trump’s endorsement. Especially if they also refuse to rent to black people.
Trump’s son in law and his father are slum lords, so no doubt this will only get worse.
Years ago, when I lived in Boston, a realtor company mistakenly sent me a letter meant for my landlord. It said something like, “rentals are lucrative and prices keep rising! You should maximize your yearly lease price increases to make more money.”
The brokers get a full months rent fee in Boston just for showing the apartment, so this was really infuriating.
Your monthly tribute to your landed lord is due in 24 days.
has sued six major landlords and RealPage
I don’t see the six landlords listed anywhere. Anyone got the list?
The amended complaint alleges the landlords — Greystar Real Estate Partners LLC (Greystar); Blackstone’s LivCor LLC (LivCor); Camden Property Trust (Camden); Cushman & Wakefield Inc and Pinnacle Property Management Services LLC (Cushman); Willow Bridge Property Company LLC (Willow Bridge) and Cortland Management LLC (Cortland) — participated in an unlawful scheme to decrease competition among landlords in apartment pricing, harming millions of American renters.
Thanks!
And I’m sure those landlords will be all “BUT WE HAVE EXPENSES TOO! WE’RE PEOPLE TOO!” excuse.
They only found six?
The department… is accusing six landlords that collectively operate more than 1.3 million units in 43 states and the District of Columbia of scheming to avoid lowering rents.
Wtf. That’s not a “landlord” that’s a “corporate housing overlord”. That shit should be illegal.
That shit is the norm lol. Every apartment I’ve ever lived in except for a very small one has been owned by these big corporations.
Thank god it’s not a monopoly though–there’s 6 different ones!!! 🥴
If found guilty they should be dispose of.
No reason to spare them after affecting millions of people.
Oh hey just in time to go absofucukinglutly nowhere!
Can’t wait for the Trump administration to pull some “Communist Democrats unfairly tried to punish Good Productive Landlords™ because the Democrats want you to pay more in rent! That’s why we’re dropping the case and giving them billions in subsidies!”
This has been going for a while and hopefully the involvement of the states means it won’t go away.
Scum
