RealPage, maker of YieldStar, is almost singlehandedly the ones causing rent to skyrocket across much of the United States.
One of the algorithm’s developers told ProPublica that leasing agents had “too much empathy” compared to computer generated pricing.
You can learn more about them here and why this antitrust case is so important:
https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent
But that’s the thing, it’s not “collusion” in the sense that rental companies all conspired to raise rates at the same time. None of them actually collaborated with each other.
At the same time, the software isn’t designed for collusion at all. It is just hoovering up public data. It is not doing anything that the companies couldn’t do themselves, and they have to keep all their client data separate.
The end result is collusion, once enough companies are using this software that their price increases drive the public market and then get sucked into the algorithm and generate more price increases. But there is no action by any party which a court can point to and shout “Collusion!”. There are enough independent actions that just happen to go in the same direction. That’s the reason why new legislation may be necessary, in order to catch this sort of distributed algorithmically-enabled collusion.
It is collusion. Information like occupancy and operating costs are shared with the software service to determine the “fair” rent rate. The software takes into account these metrics from many different management companies. If rental management companies were to share this info with eachother directly in order to set pricing, that would constitute an antitrust violation. All the software does is turn the trust into a shell game that’s more difficult to prosecute.
Exactly the point. The software did that for them. On purpose. And then they used it because they knew it would do that work for them. It might be a different kind of collusion but I’m not convinced that matters much, unless like you said, we can make new legislation to state more explicitly that this exact behavior is illegal collusion.
Yeah, I feel like people are too focused on whether or not it’s “legally” collusion.
At the end of the day, it’s a single entity with an overrepresneted ability to set prices.
Yeah, I don’t think this is strictly collusion either, any more than any other data aggregation tool.
But if we would just build housing it wouldn’t even be a fucking problem in the first place.