Biden-Harris Administration Sues Pants Off Price-Fixing App That Keeps The Rent Too Damn High
You want Harris policy? This is in her policy already!
The Biden-Harris administration, as part of its never-ending crusade to impose communism by requiring that players in the “free market” actually play by the rules, has launched an antitrust lawsuit against the real estate software company “RealPage,” arguing that its app helps landlords engage in illegal price-fixing, inflating rents nationwide and stifling competition.
One of the basic rules of capitalism is that the allegedly free market can’t work its magic if some players are cheating, which is why we have laws against price-fixing and cartels. As Wonkette alum Lisa Needham explains at Public Notice, RealPage pretty much enables price fixing through its algorithm, like so:
The company collects data like vacancy rates, current rent prices, and lease end dates from their clients, who are multifamily housing property managers and landlords. Then, RealPage feeds that aggregated information into its algorithm, which spits back out recommended prices, updated daily, for every available rental.
But it’s not merely a helpful gadget; RealPage effectively allows competing businesses to “share proprietary data to coordinate setting higher rental rates,” and the feds consider that price-fixing, whether the landlords are directly colluding with each other or all going with the rental prices spat out by RealPage.
In their lawsuit, the Federal Trade Commission and Department of Justice argue that price fixing doesn’t stop being price fixing just because an algorithm is doing it for you. The software is designed and sold as a way to drive up rental prices, a point for which the DOJ has impeccable witnesses: the sales pitch from RealPage staffers, who woo landlords with promises like “our tool ensures that [landlords] are driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.”
The case also cites a RealPage exec who kind of gives away the company’s anticompetitive game, explaining that avoiding the uncertainty of the free market is so much better than having to actually compete:
There is greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down.
When we cheat together, we all win! How could anyone but renters and communists object to that?
As with so many recent outrages by America’s corporate citizens, the RealPage price-fixing mess was first exposed in 2022 by the muckraking journalism nonprofit ProPublica. ProPublica unearthed a RealPage video featuring company VP Jay Parsons cheerfully noting that apartment rents had recently gone up by as much as 14.5 percent, prompting another exec, Andrew Bowen, to marvel at how great the software worked: “I think it’s driving it, quite honestly. […] As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”
With such incriminating evidence that RealPage is driving what the FTC calls “algorithmic collusion,” the case might seem to be a slam dunk, but as the New York Times explains (gift link), it’s a novel case, the first time the DOJ has pursued an antitrust lawsuit where the illegal price manipulation is driven by an algorithm.
In a statement, Attorney General Merrick Garland said that “Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law.” But isn’t that what innovation and entrepreneurship are all about? If this suit succeeds, won’t it have a terrible chilling effect on all the software developers who dream of finding new ways to help their clients rig the markets?
Finally, we’d also like to point out that a pledge to rein in data firms that help landlords do price-fixing is part of Kamala Harris’s first set of policy proposals released just before last week’s Democratic National Convention, as is a promise to stop Wall Street investors from bulk purchases of homes that they then mark up by an outrageous amount — yet another price-fixing scheme that has made housing more expensive, which has in turn been a key driver of inflation in the last few years.
In addition to the administration’s lawsuit against RealPage, Harris is calling on Congress — with a Democratic congressional majority we also need to elect this fall — to pass the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act, a bill that would create an industrywide ban on what RealPage is up to.
Man, even if that happens, we can already hear, months in advance, the whining and the lawsuits being filed in Texas.
STORIES ON THIS AND SIMILAR TOPICS!
[Public Notice / NYT (gift link) / FTC / ProPublica / US v. RealPage]
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As it happens, the little bridgekeeper house in the main photo stood out to me because when we were all in Chicago last week, the final leg of the architecture boat tour ended at the 1914 Canal Street Lift Bridge, which has a slightly larger bridgehouse atop its span. No idea if the house is still in use; prolly not?
https://historicbridges.org/bridges/browser/?bridgebrowser=illinois/sblift/
Dear Penthouse Forum,
I was once a landlord (of multiple properties). I treated my tenants as actual humans, and was rewarded for it. You won’t believe what happened next!
Okay, I didn’t have sex with all my tenants. But we did treat them well.
The guy who rented our Utah condo (less than 40 minutes from where the Olympics downhill was held when Utah got the Winter Games) paid his rent reliably. I promised him (in 1995, after the tenant from Hell) that I wouldn’t raise his rent if he paid rent on time. Fast forward. He had literally paid off my loan for the condo in 2016. Included in that was him unilaterally increasing his monthly payment a few years earlier, as though he was shocked we hadn’t raised his rent and he was trying to preempt a problem.
When we moved to our retirement home, I contacted him, and sold him the condo for $20,000 under the market value.
We also owned a property my wife had bought before we got married. We sold that in 2022 for far less than the “estimated value” to a woman who had helped us manage it as a rental since 2001.
Are we good capitalists? Obviously not. Do we have a chance to be recognized as decent humans?