> Our work against algorithmic rent-fixing is starting to bear real fruit. Multiple cities have passed laws prohibiting corporate landlords from using rent-fixing software, including San Francisco, San Diego, Seattle, Philadelphia, and Providence, RI. These laws aren’t complex and don’t require unwieldy market definition, you just have to show that the defendant is using nonpublic information in an algorithm to set prices. And they are being enforced, with six different lawsuits now pending.
A bunch of landlords all use the same software to tell them how to price rents. The software continually pushes prices higher and higher. The software requires landlords to use their pricing as a condition of use. Now you have a price-fixing cartel for rent.
And those corporations can decide that they'd rather the apartment sit vacant than be rented at below exactly what they'd like to get for it, bolstered in part by the fact they can claim the non-occupancy as a loss on their taxes.
In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws.
Then they got sued by the company that was targeted, and immediately waffled and canceled the ban.
What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest possible rent, because they are tethered to it for life.
So if you create an economic system where sellers never will allow prices to go down, why bother banning price fixing -- its practically baked into the housing code.
Under rent control the highest possible rent is set by laws. If you fall behind on the allowed rent increase you’re usually not allowed to catch up to market rate later, such as when your tenant leaves and you put the unit back on the market. So to avoid getting stuck at below market rate with no legal way to catch up, you have to take the maximum allowable rent increase every year. In some situations it’s better to leave a unit empty and wait for someone be willing to rent at the rate than it is to lower rent, because the consequences of lowering rent will stick with the unit for years.
Without rent control, rents can be kept constant, moved up, or moved down without having to consider the consequences for years to come. The ceiling is set by the market rate, but there isn’t a function driving all of the landlords to raise by the annually permissible maximum so they try to discover it instead.
Rent control is instituted in cities that have constrained housing supplies, so the demand is there. Landlords switch to raising rents in unison by the maximum allowable amount every year because that’s the only way to operate.
I live in NYC, which has rent control, and the idea that a landlord would otherwise lower rent is hilarious.
Landlords raise rent by the max allowed because they can. There is no “catch up” because the purpose is to protect renters against huge jumps.
I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent. You can own property to rent out, but in a city with a tremendous shortage of housing, you need to rent it out.
I lived in a building with affordable housing units and management decided they would rather not rent them out at all. Horrible.
New York’s rent control works differently from the Bay Area’s. It’s absolutely worth it to just raise the rent on a Bay Area unit if it’s rent controlled even if that means it runs empty. That isn’t usually the case in New York.
> Landlords switch to raising rents in unison by the maximum allowable amount every year
Blaming this on rent control? This entire take is absurd. Because of the simple fact that landlords, especially using this software, do this in cities without rent control.
Unless now type arguing that Berkley rent control forces landlords in cities without rent control to seek maximum rents...
Rent control is flawed, limiting housing stock is flawed. But blaming landlord's pricing behavior on this is obviously false. Simply because it happens without rent control.
> Blaming this on rent control? This entire take is absurd
Rent control is one of the few topics where the vast majority of economists agree on something. It makes people who don't understand second-order effects really angry when the conclusion doesn't match what they want to see, but it's been proven out across the world so many times that anyone who refuses to acknowledge the real problems with rent control is either uninformed or denying reality at this point.
You just want to talk about rent control. Even when it's not the issue at hand. It's the equivalent of watching a kid fall and skin his knee and someone steps forward to get on a soap box about rent control.
Rent control can be bad, but it's not even close to the cause of every problem in housing. Most importantly, it's not the cause here, and it's absurd to say it is.
Sounds like we should prevent rent increases. Fix the law, don't throw it away. Landlords that cannot afford to be landlords need to sell and go get a real job.
No one is entitled to be a lazy landlord taxing other people's existence and its extremely rare for a landlord to have built new houses, they mostly gatekeep the existing housing.
People in california need to take advantage of a populace willing to vote for constitutional amendments and override the politicians.
If the maximum allowable rent under rent control is bearable by the market, why would a landlord not do that in the absence of rent control? Are there landlords that are stupid and hate money?
You might prefer to have the vacancy filled faster rather than waiting for the highest possible price. These algorithmic pricing cases kind of revolve around this concept.
It is the value that the service provided the companies.
Landlord input a desired vacancy rate or time on Market, and service suggests the right price.
Wi5 rent control, you are limited in how you can increase rent later, so it’s to your benefit to let the apartment sit vacant longer until you get a desirable rent. Without rent control, because you can just increase rent next year by whatever, you can rent it at the market rate right away without waiting.
Every rental unit in the city I live in is rent controlled — the government sets a maximum rental increase per unit per year. This is here in the People’s Republic of … checks notes … Dubai. It works great.
HN user accounts 10+ years old tend to be coupled to a younger Boomer or older GenXer who lucked into an early tech career and believe they're a genius unintentionally being born before the world got expensive through intentional financial engineering
Bunch of self absorbed people who rode safely and on the rails of their culture and think they're a novel thinker pedaling banal cable news tropes of their bygone days
Fun fact: in RealPage's brief about the Berkeley law they cited my work that shows rents in Berkeley declining. They never had the power to artificially set rents.
I’d imagine it’s not so simple, especially without a functional legislative branch, but we could really use a “digital bill of rights” that could provide a comprehensive set of baseline protections and standards for things like this, online privacy, data protection, whatever stops Meta/X/et al from being maximally harmful, etc..
In San Francisco, I’m not a fan of Aaron Peskin’s ban on algorithmic rent-setting because 1) it goes beyond antitrust law in just banning data gathering for no good reason, 2) it rewards bounty hunters. I think it’s probably similar in the other cities.
1. It goes beyond the antitrust lawsuit by banning rent prediction using any “non-public competitor data” (Admin Code 37.10C https://codelibrary.amlegal.com/codes/san_francisco/latest/s...), which is stricter than the former antitrust guidelines which prohibited sharing “competitively sensitive variables” (https://www.ftc.gov/sites/default/files/attachments/dealings...). To the extent that it differs from banning competitively sensitive data, it is just banning the use of data to make rentals more efficient. If landlords are pricing accurately but not monopolistically, this should reduce turnover, reduce vacancy, and reduce the occasions where a listing gets a crowd of applicants, which is good for both landlord and tenant. It’s bad to try to ban accurate data.
2. It provides a private right of action for tenants and nonprofits to sue, just like Proposition 65 (Known by the State of California to cause cancer) incentivizes bounty hunters to sue. The point seems to be to punish landlords more than it is to establish fair rules.
And it seems that these lawsuits are just piggybacking on the DOJ settlement by punishing anyone who uses RealPage as soon as the ordinance becomes effective in 30 days while RealPage was already working to comply with the federal settlement. The complaints don’t have any new violations; just companies who are already settling.
SF as a city has the fundamental problem that there's a huge part of the electorate will blame the housing shortage on absolutely anything they can find that's not the actual fundamental physical shortage of housing. That leads to an endless tangle of local laws and organizations supposedly trying to "do something about it", that are fundamentally just making the problem worse by adding marginal cost to every new already-difficult-to-pencil housing unit.
Yes, you would think that a city with such a rent crisis would be begging for development e.g. incentivizing homeowners to redevelop into townhouses and apartments. But instead, the so-called “Progressive” wing has very little interest in reducing market rents and prefers to chase fringe issues (to take one example, they spent the year 2015 very publicly attacking the “Moderate” David Chiu’s short-term rental law, only to arrive at substantively the same place that they started at the end of the year. And suddenly the issue disappeared).
There’s proportional punishment based on harm, and then there are abusive booby-traps. If a landlord uses a nonpublic dataset (e.g., a vendor’s model based on year-old data that would not harm competition under the antitrust settlement), then a tenant and nonprofit can each sue for civil penalties plus attorney fees even though there is no harm.
> If landlords are pricing accurately but not monopolistically, this should reduce turnover, reduce vacancy, and...
Ah yes one of my favorite lines of argument: "We don't need laws, if companies are just behaving properly and against their financial interests to behave in a way that harms legit market pricing..."
Except as we know companies won't behave well without incentives. Which is why we need laws on it.
> Ah yes one of my favorite lines of argument: "We don't need laws
That’s not my argument at all. We do have federal antitrust law. My question was what does the ordinance do that differs from antitrust. The answer is that the ordinance rewards bounty hunters chasing the same federal case, and also bans non-“competitively sensitive” datasets.
Well, governments have successfully enabled wealth disparity to the point where corporations are buying up several tens of thousands of homes. Maybe free range capitalism isn't the amazing utopia it's cracked up to be?
1. There are 90 million single family homes in the US
2. If you want to live in a house, but for less than 5 years, it is better to rent
3. If corporations really want to buy all the houses, there's a business opportunity for you. Build houses and sell them to the corporations at exorbitant prices.
4. Nobody is making anybody sell their home to a corporation.
Capitalist countries are indeed quite amazing compared to socialist countries. That's why people flee socialist countries and try to get in the US.
1. And? Most are occupied. How many unoccupied SFHs are there?
2. I am a home owner. There is a certain subset of the populace that likes to act as though renters have it so easy, because owning a home is a never ending stream of credit card swipes for the next four (or five) digit maintenance expense - when they're not posting memes talking about not having to pay property tax or insurance or even utilities, as if landlords absorb those out of the goodness of their heart.
These corporations, if you read the article in the first place are colluding across other corporate landlords because if they don't get the rent they want, they would rather keep the occupancy vacant, because then they also get to claim it as a tax loss.
> Capitalist countries are indeed quite amazing compared to socialist countries. That's why people flee socialist countries and try to get in the US.
People don't generally flee socialism, but corruption. But hey, here we are in the US where we're doing a spectacular job of showing what a corrupt capitalist society looks like. And hey, look, the number of people trying "to get in here" is dropping like a rock.
Tens of thousands is not significant wrt 94 million.
> 2.
If you ever owned a vacant home, not only are you still going to have to pay all the usual bills, you'll be dealing with vandalism, squatters, and that undetected roof leak that ruins the interior. Thinking that "tax losses" are the way to make money does not work. If you don't believe me, buy a rental and see how it goes as a landlord. Personally, I want nothing to do with being a landlord.
> People don't generally flee socialism, but corruption
> Thinking that "tax losses" are the way to make money does not work.
Never said that. But if I'm a corporation who owns 3,000 homes and/or apartments, I can easily decide that rather than earning less than I'd like on rental income, I might keep those units vacant and claim rental loss to offset my tax burden elsewhere. Helpfully, corporations can also depreciate those dwellings as an asset. Keeping a portion of those dwellings vacant benefits me as a corporation - it doesn't benefit society or the community they're in (or the communities where the offset is going to come from). But hey, fuck society and community, we're a capitalist-over-all nation!
> If you ever owned a vacant home, not only are you still going to have to pay all the usual bills, you'll be dealing with vandalism, squatters, and that undetected roof leak that ruins the interior.
What "usual bills"? Property tax? Insurance? I can shut off water/sewage/garbage service, I can shut off electricity, internet.
Of course, if I'm a corporation with 3,000 homes, it'd be almost a certainty that I have dedicated maintenance crews who can be mitigating many of those other issues, and doing it far cheaper than you or I could (short of DIY).
As for shutting off utilities, that's a good way to develop mildew in the house. You'll also get rodents moving in, as well as insects. And then there are the teens who use it as a party house. (That's why home insurance is more expensive for vacant houses.)
But hey, don't let me stop you. Sounds like you have a sound business plan of buying homes and leaving them vacant. Let us know how it goes!
> If you ever owned a vacant home, not only are you still going to have to pay all the usual bills, you'll be dealing with vandalism, squatters, and that undetected roof leak that ruins the interior.
Maybe! That said, the improvements on the land (namely, the house itself) are only one piece of the puzzle.
Housing is usually modeled as an oligopoly, where there are relatively fewer sellers than there are buyers, and this model makes some interesting assumptions. The demand for housing is relatively inelastic, landlords have market power, dwellings are not fungible for seemingly myriad reasons, and the landlord is seeking to maximize profit over occupancy.
For smaller landlords, the opportunity cost inherent in leaving a property vacant is often pretty high for the reasons stated here. Paying out obligations, remediating illicit uses, remediating undetected faults in the structure, etc. For these folks, leaving the dwelling vacant is a losing proposition[0].
However, for the more institutional landlords[1] that have a lot of dwellings and, possibly, own most of the rental housing that exists in a particular market? There's an incentive to constrain the supply beyond what, e.g., exclusive-use zoning and arduous design review processes achieve. By the oligopoly model, the fewer of those dwellings they rent out, the more they can command in the price of rent.
Diamond cartels, for whatever it's worth, do the same thing. The same model applies. Welcome to market power.
Housing is a little more fucked in that there's also an appraisal angle, and for rental properties, the comparatives are based on the expected rent. If rents go up, the appraised value goes up. If rents go down, the appraised value goes down.
The appraised value has an outsized effect on the line of credit available to a landlord to continue their investments in real estate in that they have less to offer in terms of collateral on that leverage[2].
--
0: The only real exception that I can think of is when the housing supply is so constrained that the value of the land itself wildly outstrips the value of the improvements to that land. At that point, the land becomes a speculation vehicle, the house on it be damned. California's Proposition 13 exacerbates this by artificially lowering the opportunity cost of keeping the dwelling vacant or otherwise not redeveloping the land it sits on.
1: Real estate investment trusts count. Chances are good that anyone's retirement fund includes one of these.
2: The real estate developer Donald Trump is a notable exception to this rule. Banks, for reasons that baffle the shit out of me, continued to loan him money. There was no due diligence undertaken for most of the loans he received, and it seemed to be based entirely on vibes.
60 comments
[ 2.6 ms ] story [ 51.9 ms ] thread> Our work against algorithmic rent-fixing is starting to bear real fruit. Multiple cities have passed laws prohibiting corporate landlords from using rent-fixing software, including San Francisco, San Diego, Seattle, Philadelphia, and Providence, RI. These laws aren’t complex and don’t require unwieldy market definition, you just have to show that the defendant is using nonpublic information in an algorithm to set prices. And they are being enforced, with six different lawsuits now pending.
See Section 3
Then they got sued by the company that was targeted, and immediately waffled and canceled the ban.
What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest possible rent, because they are tethered to it for life.
So if you create an economic system where sellers never will allow prices to go down, why bother banning price fixing -- its practically baked into the housing code.
Without rent control, rents can be kept constant, moved up, or moved down without having to consider the consequences for years to come. The ceiling is set by the market rate, but there isn’t a function driving all of the landlords to raise by the annually permissible maximum so they try to discover it instead.
Rent control is instituted in cities that have constrained housing supplies, so the demand is there. Landlords switch to raising rents in unison by the maximum allowable amount every year because that’s the only way to operate.
Landlords raise rent by the max allowed because they can. There is no “catch up” because the purpose is to protect renters against huge jumps.
I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent. You can own property to rent out, but in a city with a tremendous shortage of housing, you need to rent it out.
I lived in a building with affordable housing units and management decided they would rather not rent them out at all. Horrible.
Blaming this on rent control? This entire take is absurd. Because of the simple fact that landlords, especially using this software, do this in cities without rent control.
Unless now type arguing that Berkley rent control forces landlords in cities without rent control to seek maximum rents...
Rent control is flawed, limiting housing stock is flawed. But blaming landlord's pricing behavior on this is obviously false. Simply because it happens without rent control.
Rent control is one of the few topics where the vast majority of economists agree on something. It makes people who don't understand second-order effects really angry when the conclusion doesn't match what they want to see, but it's been proven out across the world so many times that anyone who refuses to acknowledge the real problems with rent control is either uninformed or denying reality at this point.
You just want to talk about rent control. Even when it's not the issue at hand. It's the equivalent of watching a kid fall and skin his knee and someone steps forward to get on a soap box about rent control.
Rent control can be bad, but it's not even close to the cause of every problem in housing. Most importantly, it's not the cause here, and it's absurd to say it is.
No one is entitled to be a lazy landlord taxing other people's existence and its extremely rare for a landlord to have built new houses, they mostly gatekeep the existing housing.
People in california need to take advantage of a populace willing to vote for constitutional amendments and override the politicians.
Landlord input a desired vacancy rate or time on Market, and service suggests the right price.
Bunch of self absorbed people who rode safely and on the rails of their culture and think they're a novel thinker pedaling banal cable news tropes of their bygone days
Look at the places without Rent Control that have adopted a pro-housing development stance - rents are declining !
But, that doesn't keep a large staff of people working for the rent board at the expense of the local housing economy
1. It goes beyond the antitrust lawsuit by banning rent prediction using any “non-public competitor data” (Admin Code 37.10C https://codelibrary.amlegal.com/codes/san_francisco/latest/s...), which is stricter than the former antitrust guidelines which prohibited sharing “competitively sensitive variables” (https://www.ftc.gov/sites/default/files/attachments/dealings...). To the extent that it differs from banning competitively sensitive data, it is just banning the use of data to make rentals more efficient. If landlords are pricing accurately but not monopolistically, this should reduce turnover, reduce vacancy, and reduce the occasions where a listing gets a crowd of applicants, which is good for both landlord and tenant. It’s bad to try to ban accurate data.
2. It provides a private right of action for tenants and nonprofits to sue, just like Proposition 65 (Known by the State of California to cause cancer) incentivizes bounty hunters to sue. The point seems to be to punish landlords more than it is to establish fair rules.
And it seems that these lawsuits are just piggybacking on the DOJ settlement by punishing anyone who uses RealPage as soon as the ordinance becomes effective in 30 days while RealPage was already working to comply with the federal settlement. The complaints don’t have any new violations; just companies who are already settling.
Rules without punishments are useless though.
There’s proportional punishment based on harm, and then there are abusive booby-traps. If a landlord uses a nonpublic dataset (e.g., a vendor’s model based on year-old data that would not harm competition under the antitrust settlement), then a tenant and nonprofit can each sue for civil penalties plus attorney fees even though there is no harm.
Don't worry, no landlord will die or be maimed in the process. No need to use hyperbole.
> based on harm
Most laws don't require direct harm to have already occurred, fortunately.
Ah yes one of my favorite lines of argument: "We don't need laws, if companies are just behaving properly and against their financial interests to behave in a way that harms legit market pricing..."
Except as we know companies won't behave well without incentives. Which is why we need laws on it.
That’s not my argument at all. We do have federal antitrust law. My question was what does the ordinance do that differs from antitrust. The answer is that the ordinance rewards bounty hunters chasing the same federal case, and also bans non-“competitively sensitive” datasets.
https://www.amazon.com/dp/1610161408/
2. If you want to live in a house, but for less than 5 years, it is better to rent
3. If corporations really want to buy all the houses, there's a business opportunity for you. Build houses and sell them to the corporations at exorbitant prices.
4. Nobody is making anybody sell their home to a corporation.
Capitalist countries are indeed quite amazing compared to socialist countries. That's why people flee socialist countries and try to get in the US.
2. I am a home owner. There is a certain subset of the populace that likes to act as though renters have it so easy, because owning a home is a never ending stream of credit card swipes for the next four (or five) digit maintenance expense - when they're not posting memes talking about not having to pay property tax or insurance or even utilities, as if landlords absorb those out of the goodness of their heart.
These corporations, if you read the article in the first place are colluding across other corporate landlords because if they don't get the rent they want, they would rather keep the occupancy vacant, because then they also get to claim it as a tax loss.
> Capitalist countries are indeed quite amazing compared to socialist countries. That's why people flee socialist countries and try to get in the US.
People don't generally flee socialism, but corruption. But hey, here we are in the US where we're doing a spectacular job of showing what a corrupt capitalist society looks like. And hey, look, the number of people trying "to get in here" is dropping like a rock.
Tens of thousands is not significant wrt 94 million.
> 2.
If you ever owned a vacant home, not only are you still going to have to pay all the usual bills, you'll be dealing with vandalism, squatters, and that undetected roof leak that ruins the interior. Thinking that "tax losses" are the way to make money does not work. If you don't believe me, buy a rental and see how it goes as a landlord. Personally, I want nothing to do with being a landlord.
> People don't generally flee socialism, but corruption
The two go hand in hand. See "Learing Centers".
Never said that. But if I'm a corporation who owns 3,000 homes and/or apartments, I can easily decide that rather than earning less than I'd like on rental income, I might keep those units vacant and claim rental loss to offset my tax burden elsewhere. Helpfully, corporations can also depreciate those dwellings as an asset. Keeping a portion of those dwellings vacant benefits me as a corporation - it doesn't benefit society or the community they're in (or the communities where the offset is going to come from). But hey, fuck society and community, we're a capitalist-over-all nation!
> If you ever owned a vacant home, not only are you still going to have to pay all the usual bills, you'll be dealing with vandalism, squatters, and that undetected roof leak that ruins the interior.
What "usual bills"? Property tax? Insurance? I can shut off water/sewage/garbage service, I can shut off electricity, internet.
Of course, if I'm a corporation with 3,000 homes, it'd be almost a certainty that I have dedicated maintenance crews who can be mitigating many of those other issues, and doing it far cheaper than you or I could (short of DIY).
Well, you went on to say it again.
> I have dedicated maintenance crews
They cost money.
As for shutting off utilities, that's a good way to develop mildew in the house. You'll also get rodents moving in, as well as insects. And then there are the teens who use it as a party house. (That's why home insurance is more expensive for vacant houses.)
But hey, don't let me stop you. Sounds like you have a sound business plan of buying homes and leaving them vacant. Let us know how it goes!
Maybe! That said, the improvements on the land (namely, the house itself) are only one piece of the puzzle.
Housing is usually modeled as an oligopoly, where there are relatively fewer sellers than there are buyers, and this model makes some interesting assumptions. The demand for housing is relatively inelastic, landlords have market power, dwellings are not fungible for seemingly myriad reasons, and the landlord is seeking to maximize profit over occupancy.
For smaller landlords, the opportunity cost inherent in leaving a property vacant is often pretty high for the reasons stated here. Paying out obligations, remediating illicit uses, remediating undetected faults in the structure, etc. For these folks, leaving the dwelling vacant is a losing proposition[0].
However, for the more institutional landlords[1] that have a lot of dwellings and, possibly, own most of the rental housing that exists in a particular market? There's an incentive to constrain the supply beyond what, e.g., exclusive-use zoning and arduous design review processes achieve. By the oligopoly model, the fewer of those dwellings they rent out, the more they can command in the price of rent.
Diamond cartels, for whatever it's worth, do the same thing. The same model applies. Welcome to market power.
Housing is a little more fucked in that there's also an appraisal angle, and for rental properties, the comparatives are based on the expected rent. If rents go up, the appraised value goes up. If rents go down, the appraised value goes down.
The appraised value has an outsized effect on the line of credit available to a landlord to continue their investments in real estate in that they have less to offer in terms of collateral on that leverage[2].
--
0: The only real exception that I can think of is when the housing supply is so constrained that the value of the land itself wildly outstrips the value of the improvements to that land. At that point, the land becomes a speculation vehicle, the house on it be damned. California's Proposition 13 exacerbates this by artificially lowering the opportunity cost of keeping the dwelling vacant or otherwise not redeveloping the land it sits on.
1: Real estate investment trusts count. Chances are good that anyone's retirement fund includes one of these.
2: The real estate developer Donald Trump is a notable exception to this rule. Banks, for reasons that baffle the shit out of me, continued to loan him money. There was no due diligence undertaken for most of the loans he received, and it seemed to be based entirely on vibes.
The bankers defended Trump on the witness stand, and said they'd loan him money again.