• How a Secret Rent Algorithm Pushes Rents Higher

    From Ben Collver@bencollver@tilde.pink to comp.misc on Tue Oct 18 22:27:53 2022
    From Newsgroup: comp.misc

    # How a Secret Rent Algorithm Pushes Rents Higher

    "We said there's way too much empathy going on here," he said. "This
    is one of the reasons we wanted to get pricing off-site." [...] "The
    net effect of driving revenue and pushing people out was $10 million
    in income," Campo said. "I think that shows keeping the heads in the
    beds above all else is not always the best strategy."

    Texas-based RealPage's YieldStar software helps landlords set prices
    for apartments across the U.S. With rents soaring, critics are
    concerned that the company's proprietary algorithm is hurting

    On a summer day last year, a group of real estate tech executives
    gathered at a conference hall in Nashville to boast about one of
    their company's signature products: software that uses a mysterious
    algorithm to help landlords push the highest possible rents on

    "Never before have we seen these numbers," said Jay Parsons, a vice
    president of RealPage, as conventiongoers wandered by. Apartment
    rents had recently shot up by as much as 14.5%, he said in a video
    touting the company's services. Turning to his colleague, Parsons
    asked: What role had the software played?

    "I think it's driving it, quite honestly," answered Andrew Bowen,
    another RealPage executive. "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."

    The celebratory remarks were more than swagger. For years, RealPage
    has sold software that uses data analytics to suggest daily prices
    for open units. Property managers across the United States have
    gushed about how the company's algorithm boosts profits.

    "The beauty of YieldStar is that it pushes you to go places that you
    wouldn't have gone if you weren't using it," said Kortney Balas,
    director of revenue management at JVM Realty, referring to RealPage's
    software in a testimonial video on the company's website.

    The nation's largest property management firm, Greystar, found that
    even in one downturn, its buildings using YieldStar "outperformed
    their markets by 4.8%," a significant premium above competitors,
    RealPage said in materials on its website. Greystar uses RealPage's
    software to price tens of thousands of apartments.

    RealPage became the nation's dominant provider of such rent-setting
    software after federal regulators approved a controversial merger in
    2017, a ProPublica investigation found, greatly expanding the
    company's influence over apartment prices. The move helped the
    Texas-based company push the client base for its array of real estate
    tech services past 31,700 customers.

    The impact is stark in some markets.

    In one neighborhood in Seattle, ProPublica found, 70% of apartments
    were overseen by just 10 property managers, every single one of which
    used pricing software sold by RealPage.

    To arrive at a recommended rent, the software deploys an algorithm--a
    set of mathematical rules--to analyze a trove of data RealPage
    gathers from clients, including private information on what nearby
    competitors charge.

    For tenants, the system upends the practice of negotiating with
    apartment building staff. RealPage discourages bargaining with
    renters and has even recommended that landlords in some cases accept
    a lower occupancy rate in order to raise rents and make more money.

    One of the algorithm's developers told ProPublica that leasing agents
    had "too much empathy" compared to computer generated pricing.

    Apartment managers can reject the software's suggestions, but as many
    as 90% are adopted, according to former RealPage employees.

    The software's design and growing reach have raised questions among
    real estate and legal experts about whether RealPage has birthed a
    new kind of cartel that allows the nation's largest landlords to
    indirectly coordinate pricing, potentially in violation of federal

    Experts say RealPage and its clients invite scrutiny from antitrust
    enforcers for several reasons, including their use of private data on
    what competitors charge in rent. In particular, RealPage's creation
    of work groups that meet privately and include landlords who are
    otherwise rivals could be a red flag of potential collusion, a former
    federal prosecutor said.

    At a minimum, critics said, the software's algorithm may be
    artificially inflating rents and stifling competition.

    "Machines quickly learn the only way to win is to push prices above
    competitive levels," said University of Tennessee law professor
    Maurice Stucke, a former prosecutor in the Justice Department's
    antitrust division.

    RealPage acknowledged that it feeds its clients' internal rent data
    into its pricing software, giving landlords an aggregated, anonymous
    look at what their competitors nearby are charging.

    A company representative said in an email that RealPage "uses
    aggregated market data from a variety of sources in a legally
    compliant manner."

    The company noted that landlords who use employees to manually set
    prices "typically" conduct phone surveys to check competitors' rents,
    which the company says could result in anti-competitive behavior.

    "RealPage's revenue management solutions prioritize a property's own
    internal supply/demand dynamics over external factors such as
    competitors' rents," a company statement said, "and therefore help
    eliminate the risk of collusion that could occur with manual pricing."

    The statement said RealPage's software also helps prevent rents from
    reaching unaffordable levels because it detects drops in demand, like
    those that happen seasonally, and can respond to them by lowering

    RealPage did not make Parsons, Bowen or the company's current CEO,
    Dana Jones, available for interviews. Balas and a Greystar
    representative declined to comment on the record about YieldStar.
    The National Multifamily Housing Council, an industry group, also
    declined to comment.

    Proponents say the software is not distorting the market. RealPage's
    CEO told investors five years ago that the company wouldn't be big
    enough to harm competition even after the merger. The CEO of one of YieldStar's earliest users, Ric Campo of Camden Property Trust, told
    ProPublica that the apartment market in his company's home city alone
    is so big and diverse that "it would be hard to argue there was some
    kind of price fixing."

    What role RealPage's software has played in soaring rents--which in
    the decade before the pandemic nearly doubled in some cities--is hard
    to discern. Inadequate new construction and the tight market for
    homebuyers have exacerbated an existing housing shortage.

    But by RealPage's own admission, its algorithm is helping drive rents

    "Find out how YieldStar can help you outperform the market 3% to 7%,"
    RealPage urges potential clients on its website.

    Few tenants know that such software, owned by a privately held
    company, has had a hand in rent increases across the country.

    In Boston, renter Kaylee Hutchinson said she was puzzled when her landlord--unbeknownst to her, a RealPage client--told her days into
    the first pandemic lockdowns that her rent was going up. Building
    staff insisted that the market rate for her apartment was 6.5% higher
    than she was paying, despite her protests that people were fleeing
    the city.

    [Kaylee Hutchinson's landlord, who uses RealPage's pricing software,
    told her rent was going up at the start of the pandemic even as many
    people were fleeing the city.]

    A few weeks later, she and her fiancé saw a newly vacant unit in
    their building advertised online for less. One of their landlord's
    policies permitted moving to another unit owned by the company, so
    they did.

    Hutchinson, who is an analyst for the police department, wondered if
    a computer algorithm was behind building staff's inflexibility. "It
    was pretty obvious they should have been dropping prices," she said.
    "They were digging their heels in."

    Hutchinson said she watched apartments in her building sit vacant at
    prices that didn't make sense to her.

    "A normal mom-and-pop landlord, they're worried about having a good
    tenant and protecting their interest in the agreement," Hutchinson
    said. "These companies, they'll just replace you."

    # The Origins of YieldStar

    One of YieldStar's main architects was a business executive who had
    personal experience with an antitrust prosecution.

    A genial, self-described "numbers nerd," Jeffrey Roper was Alaska
    Airlines' director of revenue management when it and other major
    airlines began developing price-setting software in the 1980s.

    Competing airlines began using common software to share planned
    routes and prices with each other before they became public. The
    technology helped head off price wars that would have lowered ticket
    prices, the Department of Justice said.

    The department said the arrangement may have artificially inflated
    airfares, estimating the cost to consumers at more than a billion
    dollars between 1988 and 1992. The government eventually reached
    settlements or consent decrees for price fixing with eight airlines,
    including Alaska Airlines, all of which agreed to change how they
    used the technology.

    At one point, federal agents removed a computer and documents from
    Roper's office at the airline. He said he and other creators of the
    software weren't aware of the antitrust implications. "We all got
    called up before the Department of Justice in the early 1980s because
    we were colluding," he said. "We had no idea."

    When Roper returned to the United States in the early 2000s after a
    stint in central and eastern Europe, he said, he discovered the
    apartment rental industry was so far behind technologically that it
    resembled the emerging markets he'd just left.

    Apartment managers were "basically pricing their product on a paper
    napkin," said Roper, who eventually formed his own company.

    Old computers and manual recordkeeping were mainstays of the
    industry. Leasing agents gauged how their buildings compared by
    calling up competitors. "This was just a ripe business," with lots
    of money and lots of opportunities for technological improvement,
    Roper said.

    RealPage hired Roper as its principal scientist in 2004 to improve
    software it had bought from Camden Property Trust, a large
    investor-backed owner and manager of apartment buildings.

    Roper quickly realized he required data--a lot of data--to get the
    algorithm working properly. He began building a "master data
    warehouse" that pulled in client data from other RealPage
    applications, such as those for leasing managers.

    A proof-of-concept version of the software had performed well in
    tests at townhouses Camden offered for rent in its home city of

    At the time, the street behind Camden's townhouses was shut down
    while a grocery store was being built. Leasing staff wanted to
    discount rent for the townhouses because of the nuisance, said Kip
    Zacharias, who worked with Camden as a consultant.

    Instead, YieldStar suggested boosting rents. "We were like, 'Guys,
    just try it,'" Zacharias said.

    The units ended up renting for significantly more than staff had
    expected, he said. "That was kind of the eureka moment," Zacharias
    said. "If you'd listened to your gut, you would have lowered your

    The practice of lowering rent to fill a vacancy was a reflex for many
    in the apartment industry. Letting units sit empty could be costly
    and nerve-wracking for leasing agents.

    Such agents sometimes hesitated to push rents higher. Roper said
    they were often peers of the people they were renting to. "We said
    there's way too much empathy going on here," he said. "This is one
    of the reasons we wanted to get pricing off-site."

    Unimpeded by human worries, YieldStar's price increases sometimes led
    to more tenants leaving.

    Camden's turnover rates increased about 15 percentage points in 2006
    after it implemented YieldStar, Campo, the company's CEO, told a
    trade publication a few years later. But that wasn't a problem for
    the firm: Despite having to replace more renters, its revenue grew by

    "The net effect of driving revenue and pushing people out was $10
    million in income," Campo said. "I think that shows keeping the
    heads in the beds above all else is not always the best strategy."

    (Reminded of that quote, Campo told ProPublica it "sounds awful" and
    doesn't reflect how he or Camden views renters today. "We
    fundamentally believe our customers are the most important part of
    our business," he said. "We're not about pushing people out.")

    Hiking rents at the same time benefited all landlords, the industry
    learned. "A rising tide lifts all boats," one real estate executive
    and revenue management proponent told the industry publication Yield
    Pro in 2007.

    One of the greatest threats to a landlord's profit, according to
    Roper and other executives, was other firms setting rents too low at
    nearby properties. "If you have idiots undervaluing, it costs the
    whole system," Roper said.

    Jeffrey Roper helped develop YieldStar, which uses an algorithm to
    suggest prices for apartments across the country.

    Roper wasn't the only technologist working on an apartment pricing
    algorithm. Donald Davidoff, the primary developer of rival software
    called Lease Rent Options, or LRO, said he designed his program
    differently, to head off any concerns about collusion.

    Instead of relying on a digital warehouse that includes competitor
    data, Davidoff used a complex formula and public market data to steer
    LRO's algorithm. The system relied on incremental price shifts to
    manage demand for apartments, said Davidoff, an MIT-educated former
    rocket engineer. "That's not dissimilar to changing a trajectory of
    a rocket through inflection of a nozzle," he said--making small
    changes that can dramatically alter something's course over time.

    Davidoff said he was careful to avoid features that might run counter
    not only to anti-discrimination laws, such as the Fair Housing Act,
    but also those that bar competitors from conspiring to set prices.

    "I had many conversations with attorneys to understand where the
    boundaries are," he said. "Anybody who's building one of these
    systems or is involved in these should care a lot about fair housing
    and should care a lot about price collusion to avoid both."

    Roper told ProPublica that when he was developing the YieldStar
    software more than a decade ago, he was concerned about avoiding both
    issues. He also said he didn't want to misuse private data in

    "I was highly sensitized to: You just don't do it," Roper said.

    Despite differences in the software's design, RealPage acquired LRO
    in 2017 after months of scrutiny by the antitrust division of the
    justice department. Federal regulators review mergers above a
    certain size--right now, it is transactions valued at $101
    million--and typically allow them to proceed after only a preliminary
    review. But some are flagged for a more extensive look. The
    government can challenge a merger in court if it believes it could substantially harm competition.

    RealPage's purchase of LRO received such a second look, but the DOJ
    allowed it to proceed in late 2017. The department did not respond
    to requests for comment.

    The approval allowed RealPage to acquire its only significant
    competitor, Roper said, adding, "I was surprised the DOJ let that go

    RealPage was pricing 1.5 million units, and the acquisition of LRO
    would double that, Steve Winn, RealPage's then-CEO, said at a
    mid-2017 investor conference. "I don't think there's any
    concentration, enough concentration, of buying or pricing power here"
    to warrant DOJ concerns, he said. A third company had a substantial
    footprint in the market, Winn said, but property managers' own manual
    pricing processes or proprietary systems were RealPage's largest

    "We expect our combined platform to drive accelerated, sustained
    revenue growth," Winn said in a media release announcing the deal.

    RealPage's influence was burgeoning. That year, the firm's target market--multifamily buildings with five or more units--made up about
    19 million of the nation's 45 million rental units. A growing share
    of those buildings were owned by firms backed by Wall Street
    investors, who were among the most eager adopters of pricing

    RealPage renamed its combined pricing software AI Revenue Management.
    By the end of 2020, the firm was reporting in a Securities and
    Exchange Commission filing that its clients used its services and
    products to manage 19.7 million rental units of all types, including single-family homes. The private equity firm Thoma Bravo bought the
    public company a few months later for $10.2 billion.

    Winn, whose net worth Forbes estimates at $1.7 billion, stepped
    aside. He did not respond to requests for comment.

    A spokesperson for Thoma Bravo declined to comment.

    # Who Uses the Software and How It Works

    Somewhere around 2016, according to one trade group, the industry's
    use of the pricing software began to achieve "critical mass."

    The more property managers who sign on to RealPage services, the more
    data flows into the company's repository. That in turn aids its
    pricing service, which the company says "leverages multifamily's
    largest lease transaction database."

    RealPage's clients include some of the largest property managers in
    the country. Many favor cities where rent has been rising rapidly,
    according to a ProPublica analysis of five of the country's top 10
    property managers as of 2020. All five use RealPage pricing software
    in at least some buildings, and together they control thousands of
    apartments in metro areas such as Denver, Nashville, Atlanta and
    Seattle, where rents for a typical two-bedroom apartment rose 30% or
    more between 2014 and 2019.

    Greystar and FPI Management each control hundreds of buildings in
    metro areas where rents have risen steeply in recent years. And
    Equity Residential, Lincoln Property Company and Mid-America
    Apartment Communities each manage dozens of buildings in high-growth

    In contrast, these same companies control fewer buildings in metro
    areas such as Philadelphia, Tampa and Chicago, where rents have
    increased more slowly, the analysis found.

    Many factors may cause RealPage clients to cluster in high
    rent-growth markets. The company's clients may gravitate toward such
    markets because those areas will bear more rent hikes and so offer an opportunity to make more money, for instance. But RealPage says its
    software steers pricing that beats the market in areas where it

    RealPage's algorithm calculates how demand for apartments responds to
    changes in price--what's known as price elasticity.

    The algorithm takes into account characteristics of apartments, like
    the number of bedrooms. It also considers factors such as how many
    more of a complex's apartments are likely to become available in the
    near future. Property managers can adjust settings according to
    their priorities--such as how full they want their buildings to be.

    The software also analyzes rent prices in the broader market, the
    company said. That data can provide insight into how competitors'
    buildings located near the client--such as within, say, a half-mile
    or mile radius--are being priced, said Ryan Kimura, a former RealPage executive.

    One advantage RealPage's data warehouse had was its access to actual
    lease transactions--giving it the true rents paid, instead of simply
    those a landlord advertised, RealPage said.

    Property managers can't look at the unpublished data any one rival is
    sharing with YieldStar, Roper and other former RealPage employees

    Nicole Lott said that when the building where she worked as a
    property manager near Dallas started using YieldStar, the software
    determined that similar buildings in the area were charging more. It
    pushed for steep increases.

    "It really jumped rates up," Lott said. "Leasing slowed down to a

    She and other staff challenged the software, asking the division of
    her company that oversaw YieldStar for a review, she said. The
    landlord ended up raising rates more graduly, she said.

    "We didn't think we could get those rates," she said. "In some cases
    we were right and in some cases we might have been wrong."

    Kimura, a former RealPage executive who worked at the firm for three
    years before leaving in 2021, said the company would typically see
    pushback from property staff on about 10%-20% of the software's recommendations. It was part of the process. "If they are approving
    every rate and it's 100% acceptance," he said, "they basically have a
    blindfold on and are pushing a button."

    RealPage claims its software will increase revenue and decrease
    vacancies. But at times the company has appeared to urge apartment
    owners and managers to reduce supply while increasing price.

    During an earnings call in 2017, Winn said one large property
    company, which managed more than 40,000 units, learned it could make
    more profit by operating at a lower occupancy level that "would have
    made management uncomfortable before," he said.

    The company had been seeking occupancy levels of 97% or 98% in
    markets where it was a leader, Winn said. But when it began using
    YieldStar, managers saw that raising rents and leaving some
    apartments vacant made more money.

    "Initially, it was very hard for executives to accept that they could
    operate at 94% or 96% and achieve a higher NOI by increasing rents,"
    Winn said on the call, referring to net operating income. The
    company "began utilizing RealPage to operate at 95%, while seeing
    revenue increases of 3% to 4%."

    But the software's supporters say it's not driving the nation's
    housing affordability problem.

    Though soaring rent is giving the industry a "black eye," Campo said,
    the culprit is a lot of demand and not enough supply--not revenue
    management software. The software just helps managers react to
    trends faster, he said.

    "Would you rather do your work today on a typewriter or a computer?"
    he asked. "That's what revenue management is."

    Using software like YieldStar is "taking what we used to do manually
    on a yellow pad and calling people on the phone and putting it on a
    codified system where you take the errors out of the pricing," he

    # RealPage, Seattle and Rising Rents

    To see how rent-setting software can make a difference, look no
    further than Seattle, where over the last few years rents have risen
    faster than almost anywhere in the country, some studies show.

    Large apartment buildings in one ZIP code just north of downtown,
    sandwiched between the Space Needle and Pike Place Market, are
    overwhelmingly controlled by RealPage clients, ProPublica found.

    The trendy Belltown neighborhood, with its live music venues and
    residential towers, had 9,066 market rate apartments in buildings
    with five or more units as of June, according to the data firm CoStar
    and Apartments.com. Property management was highly concentrated: The
    ZIP code's 10 biggest management firms ran 70% of units, data showed.

    All 10 used RealPage's pricing software in at least some of their
    buildings, according to employees, press releases and articles in
    trade publications.

    Expensive markets with high rents, like Seattle, tend to have "very
    high" rates of revenue management use by landlords, Roper said.

    Two buildings in the ZIP code--one with revenue management software
    and the other without--reveal diverging approaches to pricing

    The Fountain Court apartments, 320 units clustered around a courtyard
    with a fountain, are about a half-mile from Amazon's corporate
    headquarters. The building is owned and managed by Essex Property
    Trust, whose executives told investors in a 2008 earnings call that
    they were implementing YieldStar in the trust's apartment buildings.

    At the Fountain Court, rent has risen 42% since 2012, CoStar data shows--steeper than the 33% average increase for similar downtown

    Tenant Amanda Tolep and her husband were approaching the end of their
    lease for a one-bedroom at the six-story building near the end of
    2021 when they learned rent would jump about $400, to $1,600. The
    increase amounted to 33%--in one year.

    Tolep had been working as a barista and launching her own
    nutrition-related business. Her husband worked for a bank. They
    expected their rent to go up, knowing they had received a "COVID
    deal." But the size of the jump, along with other nuisances--like
    stolen packages and noise from a nearby fire station--led them to
    look elsewhere.

    After finding prices similar to their raised rent at several other
    neighborhood buildings, the couple decided to leave the city and move
    a half-hour's drive north.

    A spokesperson for Essex declined to comment. None of the other
    biggest property managers commented on the record about their use of
    revenue management.

    About six blocks away, rent has not gone up as dramatically at The
    Humphrey Apartments, a historic six-story brick building with 74

    John Stepan's rent stayed relatively steady in a building that did
    not use RealPage's pricing software.

    John Stepan, a writer for a tech company, moved into a studio in the
    1923 building a little more than a year ago. It was small, but he
    liked the high ceilings, hardwood floors and farmhouse-style kitchen.
    He had secured a COVID deal, too: one month free, with rent of
    $1,295 a month after that.

    A few months before his lease was up, the building notified him that
    rent would increase by $50, which amounted to about a 3.9% rise. "It
    was surprisingly low," said Stepan, who left only because he found a
    condo to buy nearby.

    Tami Drougas, the asset manager who oversees The Humphrey and two
    other Seattle-area buildings for the local real estate developer who
    owns them, said she doesn't use a revenue management system.

    "I don't believe in them," she said. "That's great and fine for
    larger corporations. But I think it takes the humanity out of what
    we do."

    After 24 years in the industry, she said, she sees good relationships
    with tenants and vendors as the key to running a building
    successfully. She said The Humphrey has low costs related to

    The building's rent has barely budged in recent years, she
    acknowledged. "We have a lot less turnover and I feel like that
    keeps expenses down," Drougas said.

    Seattle has been hit particularly hard by soaring rents. One report
    found the city had the steepest rent growth of any major city in the
    nation over the decade ending in 2019. Almost 46,000 Seattle
    households were spending more than half their incomes on housing,
    making them what federal standards call "severely cost-burdened,"
    according to a 2021 study the city commissioned. Many families have
    trouble paying for necessities like food and medical care when their
    rent eats up 30% or more of their income.

    "Many others have been priced out of Seattle altogether due to
    rapidly rising rents and housing prices," the study said.

    It also found that people with higher incomes often "down rented,"
    choosing cheaper apartments that would otherwise have been available
    to people making less. Seattle should have had a surplus of 9,000
    apartments affordable to people making 80% or less of the median
    income, the study found. But tenants' down renting as prices rose
    turned that surplus into a deficit of 21,000.

    Newly Rent-Burdened Workers Range From Accountants to Groundskeepers

    In metro Seattle, more people in a variety of jobs are spending over
    30% of their income on rent. Below are the 10 occupations where the
    share of rent-burdened households jumped the most.

    The number of apartments controlled by the country's 50 largest
    property managers has grown every year for 14 years, according to the
    National Multifamily Housing Council, which surveys buildings with
    five or more units.

    Those firms oversaw about 1 in 6 such apartments nationwide in 2019,
    amounting to 3.6 million units. By 2021, the number had risen to
    almost 4.2 million.

    James Nelson, a former bank examiner and loan broker, noticed the
    concentration of landlords when he and his partner moved to Seattle
    in 2018.

    Troubled by astronomical home sale prices and high rents, Nelson
    began looking at what was happening in the broader market.

    After some digging, he found that many if not most of the bigger
    apartment managers in Seattle appeared to be using price-setting
    software. "The name RealPage kept popping up," said Nelson, who is
    retired and writing a book on his research. "I went in and looked at
    the technologies that they were using."

    He concluded the landlords were using tech to do exactly what
    RealPage advertised it could do--help them charge high rents and beat
    the market.

    "There is no competition," he said.

    # Concerns About Competition

    RealPage's software has gained traction at a time when the Biden administration, concerned about rising prices and corporate
    concentration, is looking to bolster enforcement of rules meant to
    ensure competition is flourishing.

    To win cases, antitrust prosecutors have traditionally needed to show
    that competitors agreed among themselves to tamper with pricing. "If competitors agreed among themselves to use the same algorithm and to
    share information among themselves with the purpose of stabilizing
    pricing, that would be per se illegal," said Stucke, the former
    antitrust prosecutor.

    If they simply shared information without agreeing to manipulate
    pricing, the question of whether antitrust law was violated would be
    more complex, he said. Stucke said he knew of no cases where
    companies had been prosecuted for what's known as tacit collusion
    while using the same algorithm to set prices.

    But Maureen K. Ohlhausen, who was then the acting chair of the
    Federal Trade Commission, said in a 2017 talk that it could be
    problematic if a group of competitors all used the same outside
    firm's algorithm to maximize prices across a market.

    She suggested substituting "a guy named Bob" everywhere the word
    algorithm appears.

    "Is it OK for a guy named Bob to collect confidential price strategy information from all the participants in a market and then tell
    everybody how they should price?" she said. "If it isn't OK for a
    guy named Bob to do it, then it probably isn't OK for an algorithm to
    do it either."

    Through a representative, Ohlhausen declined to comment on RealPage.

    RealPage's software raises multiple concerns, experts said.

    Courts have frowned on sharing nonpublic data among competitors.
    Lease transaction data is not always public.

    As far as RealPage's claim on its website that it uses "disciplined
    analytics that balance supply and demand to maximize revenue growth,"
    Stucke said that businesses can't usually control supply and demand
    on their own. "Normally that's left to market forces," he said.

    The RealPage User Group--the forum for apartment managers who use the
    company's products--encourages rivals to work together, something
    that has been challenged as anti-competitive in antitrust
    prosecutions, too. The company's website says the group aims to
    "promote communications between users," among other things.

    Starting out with 10 members in 2003, the group has grown to more
    than 1,000 participants, according to the website. A dozen
    scommittees, including two focused on revenue management, meet in invitation-only sessions at the company's annual conference,
    RealWorld, and participate in a conference call each quarter.

    Those sorts of collaborations, Stucke said, "could raise an antitrust
    red flag."

    If clients are tampering with market forces, their assertions in
    RealPage marketing videos that its software keeps prices and
    occupancy "more stable" could also become relevant in court, Stucke
    said. Similar comments have been used as evidence in previous
    antitrust cases.

    And the exhortations by RealPage and real estate executives for
    companies to use YieldStar and let some units sit vacant to raise
    prices are reminiscent of a legal case in the early 1900s, he said,
    where lumber companies shared information and a directive to reduce
    supply in order to push up prices.

    In an email to ProPublica, RealPage dismissed the notion that the
    company was using market data improperly.

    The company said that using actual rents helps the company "capture a
    truer picture of price elasticity and affordability," which reduces
    the odds a unit is overpriced. And the lease transaction data
    RealPage is using isn't always private; sometimes such data is
    disclosed, the company said, such as when publicly traded real estate
    firms make reports.

    The FTC, which has broad authority to bring enforcement cases against businesses for anti-competitive practices, said in 2021 that it was
    seeking a more active role in such cases.

    A spokesperson for the FTC declined to comment on RealPage's pricing

    The agency has tangled with RealPage before: In 2018, the company
    agreed to pay $3 million to settle an FTC complaint that the company
    had failed to do enough to make sure personal information used in its
    tenant screening product was accurate. RealPage did not admit
    wrongdoing in the settlement.

    # Higher Rents Are Burdening More Tenants

    Drama over rising rent costs--now a key driver of inflation--has been increasingly public. The year before the pandemic, roughly 46% of
    renters in the U.S. spent more than 30% of their income on rent and
    therefore met the definition of cost-burdened, Harvard University's
    Joint Center for Housing Studies found.

    In mid-September in Washington, D.C., angry protesters disrupted the
    normally sedate yearly conference held by the National Multifamily
    Housing Council. Before security ejected them, they seized the stage
    and recounted how their families had been harmed by an inability to
    find safe, affordable housing.

    At the center of the acrimonious debate has been RealPage's Jay

    Since RealPage's own July conference, he's repeated a statistic,
    compiled from a company data set of new lease transactions, that
    market-rate apartment renters are only spending around 23% of their
    income on rent.

    "The reality is that rents can only rise as incomes rise," Parsons
    told The New York Times last month. "If people can't afford it, you
    can't lease it."

    But his sunny view has drawn sharp rebukes.

    D.C. Attorney General Opens Investigation Into Republican Governors'
    Shipping of Immigrants to the Capital

    "This is demonstrably false," wrote Ben Teresa, co-director of the
    RVA Eviction Lab at Virginia Commonwealth University, on Twitter.
    "One of the defining characteristics of housing markets in the last
    40 years has been rents increasing faster than wages.

    "The problem is quite precisely that people are paying rents they
    can't afford," he wrote.

    --- Synchronet 3.19c-Linux NewsLink 1.113