So what happens if they do this, and prices keep going up just as much as before? Will they admit that they're wrong? Will they double down and try to ban something else?
If prices keep going up then landlords will be happy because they got the same result without paying RealPage, and the renters are no worse off than they are under the current system. That's a win.
If the law achieves its goal and prices stop rising that is also a win.
While I agree that the giant metal spikes we put on all the cars aren't the exclusive reason that cars are lethal, I would hope we both agree that cars are less lethal when we don't cover them in giant metal spikes.
The legislature doesn’t need to wait for the courts to prove collusion beyond a reasonable doubt before they act. RealPage is illegal collusion. It is very clear from the FTC and DOJ. Making it specifically illegal means that the DA doesn’t need to prove it is collusion every time they bring a case.
Just to clarify, this is not just “observing rent prices” and is in fact illegal collusion and price fixing.
As the FTC and DOJ have stated, it would be illegal for competitors to agree use a shared third party human to set prices, so it is also illegal if that human is an algorithm.
Outlawing an algorithm that observes public facts and make obvious decisions based on those facts seems ... problematic.
If all the same owners downloaded an Excel spreadsheet that imported the data and ran an algorithm to arrive at a market acceptable price, that would also be deemed illegal?
The algorithm isn’t outlawed. It’s called YieldStar. I’m sure it is very clever. What is illegal is collusion, which means using a third party to dictate prices rather than the market. That third party can be a person or an algorithm or an ancient papyrus scroll, it doesn’t matter.
"dictate". I think that word doesn't mean what you think it means.
If I, as a property holder, personally decide to use some mechanism to assist me in reaching a price for my product, that is fine -- even if you don't like it.
If I, as a property holder, meet with all of my fellow property owners and collude to set a market price (eliminating competition), that is not fine -- that is collusion.
Are you claiming that all property holders are literally colluding to establish a price that eliminates a market price? That there are literally no people who decide to set other prices for equivalent products in that market? If everyone in a market decides (with the help of a program, or because they can do basic mathematics) to set a higher price, and some people, like, just read the "for rent" adds and set similar prices -- that they are, literally colluding to set prices?
Because that sounds crazy. What this actually seems to be is the market establishing a price based on common knowledge.
If crazy banksters and treasury-looting politicians decide to cause massive inflation, crash the house building industry, and higher rent prices are one (obvious) result, I think we should perhaps look to the root cause -- not accuse some poor slobs reading data from a spreadsheet and setting a rent price that recovers the true rental value of their property, of collusion.
"price fixing algorithm"? Wow, that's quite a feat! An algorithm that convinces all individual property owners to collude to set a price? So persuasive, it is, that there are no property owners making things available at differing prices?
"access to non-public information"? What, like the market price of your own personal property, and that the algorithm proposes that you should rent it for a price that yields at least the payment of a mortgage on the property! Magic!! Sorcery, I say!
I don’t think this ordinance is useful (https://sfgov.legistar.com/LegislationDetail.aspx?ID=6789588...). The headline is that it bans “price collusion” which is already illegal under the Sherman Antitrust Act. But it is sloppy in that it also bans the use of any proprietary data about competitors (not even shared by competitors). So to the extent that it prohibits the use of neighborhood rent estimates (like Zestimate or airdna), I think it needlessly bans useful services.
In fact, can you sue Zillow for publishing a Rent Zestimate? It does seem like the ordinance bans “provid[ing]… any algorithmic device”. An “algorithmic device” “perform[s] calculations of non-public competitor data” and “advis[es] a landlord… on the amount of rent that the landlord may obtain”. “Non-public competitor data” is “information that is not available to the general public” (such as data on historical rental ads on Zillow). I’m not sure whether Rent Zestimate would fall under the exception “(A) report that publishes existing rental data in an aggregated manner but does not recommend rents or occupancy levels for future leases” since they provide a Zestimate on an individual address, not “aggregated”. Someone should try suing Zillow.
It is also pandering by mayoral candidate Aaron Peskin, who has opposed many efforts to loosen zoning to increase housing competition. Where the Board of Supervisors can make a big difference at increasing competition, he has stood in the way (e.g. opposed SB 50 upzoning near transit, banned group housing because there was a “glut” of old units, increased the inclusionary housing fee/tax to reduce construction, empowers nonprofits to make demands on development). But he’s happy to do something that supposedly promotes competition but has no substantive impact.
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[ 5.1 ms ] story [ 19.7 ms ] threadIf the law achieves its goal and prices stop rising that is also a win.
A win either way. What's not to like?
A) encourage more supply
B) prevent landlords from observing rent prices.
Politicians: Let’s go with B! It will totally work.
As the FTC and DOJ have stated, it would be illegal for competitors to agree use a shared third party human to set prices, so it is also illegal if that human is an algorithm.
If all the same owners downloaded an Excel spreadsheet that imported the data and ran an algorithm to arrive at a market acceptable price, that would also be deemed illegal?
If not, why not?
If I, as a property holder, personally decide to use some mechanism to assist me in reaching a price for my product, that is fine -- even if you don't like it.
If I, as a property holder, meet with all of my fellow property owners and collude to set a market price (eliminating competition), that is not fine -- that is collusion.
Are you claiming that all property holders are literally colluding to establish a price that eliminates a market price? That there are literally no people who decide to set other prices for equivalent products in that market? If everyone in a market decides (with the help of a program, or because they can do basic mathematics) to set a higher price, and some people, like, just read the "for rent" adds and set similar prices -- that they are, literally colluding to set prices?
Because that sounds crazy. What this actually seems to be is the market establishing a price based on common knowledge.
If crazy banksters and treasury-looting politicians decide to cause massive inflation, crash the house building industry, and higher rent prices are one (obvious) result, I think we should perhaps look to the root cause -- not accuse some poor slobs reading data from a spreadsheet and setting a rent price that recovers the true rental value of their property, of collusion.
If that mechanism is a non-competitive price fixing algorithm with access to non-public information then no, it is not fine.
Real Page also created work groups to facilitate collusion between apartment managers.
"access to non-public information"? What, like the market price of your own personal property, and that the algorithm proposes that you should rent it for a price that yields at least the payment of a mortgage on the property! Magic!! Sorcery, I say!
This line of reasoning is amazing.
In fact, can you sue Zillow for publishing a Rent Zestimate? It does seem like the ordinance bans “provid[ing]… any algorithmic device”. An “algorithmic device” “perform[s] calculations of non-public competitor data” and “advis[es] a landlord… on the amount of rent that the landlord may obtain”. “Non-public competitor data” is “information that is not available to the general public” (such as data on historical rental ads on Zillow). I’m not sure whether Rent Zestimate would fall under the exception “(A) report that publishes existing rental data in an aggregated manner but does not recommend rents or occupancy levels for future leases” since they provide a Zestimate on an individual address, not “aggregated”. Someone should try suing Zillow.
It is also pandering by mayoral candidate Aaron Peskin, who has opposed many efforts to loosen zoning to increase housing competition. Where the Board of Supervisors can make a big difference at increasing competition, he has stood in the way (e.g. opposed SB 50 upzoning near transit, banned group housing because there was a “glut” of old units, increased the inclusionary housing fee/tax to reduce construction, empowers nonprofits to make demands on development). But he’s happy to do something that supposedly promotes competition but has no substantive impact.