FBI Searches Property Management Company in Rent Price-Fixing Investigation \ stacker news ~econ

FBI Searches Property Management Company in Rent Price-Fixing Investigation rentalhousingjournal.com/fbi-searches-property-management-company-in-rent-price-fixing-investigation/

1545 sats \ 19 comments \ @siggy47 5 Jun econ

You see, rising rents have nothing to do with money printing. It's just evil landlords.

The Justice Department wrote that in the past, collusion has happened with “a formal handshake in a clandestine meeting,” they wrote. “Algorithms are the new frontier, and, given the amount of information an algorithm can access and digest, this new frontier poses an even greater anticompetitive threat than the last.”

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65 sats \ 6 replies \ @Undisciplined 5 Jun

Anti-Trust Law

Price Gouging: Charging more than your competitors.

Price Fixing: Charging the same as your competitors.

Predatory Pricing: Charging less than your competitors.

52 sats \ 3 replies \ @elvismercury 5 Jun

This is clever, but like most such clever things it's a massive simplification, or so it seems to me. E.g., big company driving small companies into oblivion by selling things at a loss until competition is wiped out is a thing. Buying up all competitors in a region, then jacking up prices once there's no alternative, is also a thing.

20 sats \ 2 replies \ @Undisciplined 5 Jun

I'm trying to find it, but there's a work of economic history that goes through the Robber Baron era and debunks most of the predatory pricing claims.

In general, it's much less of a thing than people think. Far more often, prices just stay down after they drop.

89 sats \ 1 reply \ @elvismercury 5 Jun

I'd love to see that, although expressions of this in the modern era are what I had in mind. The "acquire competitors and then raise prices" is something I know from personal involvement in healthcare -- our own private analysis, and of course, the cartel-like behavior on lock-step insulin pricing that's almost too blatant to merit discussion.

0 sats \ 0 replies \ @Undisciplined 5 Jun

I'm pretty sure this is the book I was thinking of: https://www.abebooks.com/9780870001598/Myths-Antitrust-Economic-Theory-Legal-0870001590/plp

In the case of a highly regulated and protected industry like healthcare, it doesn't surprise me at all that this sort of thing happens. My wife worked in hospital admin, briefly, so I have a little bit of exposure, in addition to the many episodes of Econ Talk on the subject. There are so many barriers to entry for competitors, but they're all artificial creations of the state.

I don't think these kinds of exercises of market power are feasible, more generally.

79 sats \ 1 reply \ @siggy47 OP 5 Jun

You've posted this before, but I can't get enough of it. It is always apt. What I can't believe now is that they're scapegoating software at the same time banks like NYCB are about to collapse due to bad loans on Northeast multi family rent controlled buildings. It's insane. Do they think landlords are profiting?

54 sats \ 0 replies \ @Undisciplined 5 Jun

Worse, they don’t care whether or not landlords are profiting.

75 sats \ 0 replies \ @Coinsreporter 6 Jun

54 sats \ 7 replies \ @Satosora 5 Jun

People are greedy. I know NYC had rent controlled apartments, did that work for them?

20 sats \ 6 replies \ @siggy47 OP 5 Jun

Ask NYCB bank. Landlords are leaving apartments vacant because they can't afford to make needed repairs. With NYC corruption filled and regulated maintenance costs default is the only recourse.

54 sats \ 5 replies \ @Satosora 5 Jun

I also remember NYC had a cool SRO program. If you could get into one.

10 sats \ 4 replies \ @siggy47 OP 5 Jun

That was a while ago. The hotel industry is doing great. 20% of hotel space is filled by undocumented migrants who's market rate rooms are being paid by the city.

54 sats \ 3 replies \ @Satosora 5 Jun

Interesting. I dont believe undocumented migrants are a good thing.

30 sats \ 2 replies \ @siggy47 OP 5 Jun

I agree, especially at these levels.

54 sats \ 1 reply \ @Satosora 5 Jun

I dont mind legal migrants. Those that go through legal means. The USA needs migrants. Its just these people coming over without documentation and bogging the system is not good.

10 sats \ 0 replies \ @siggy47 OP 5 Jun

Exactly

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54 sats \ 1 reply \ @thecommoner 5 Jun

The "algo's" are just the latest tool in the landlord's pocket which helps them continue to be able to drive rent's up and up (increasing their profit) and their ability to buy more properties and wash and repeat....just remember this system of the landlord's/owner's is built upon a FIAT model of extracting value from its "customers" who are beholding to them due to their need for housing....under a Bitcoin business model....I think this all changes....this paradigm of extraction becomes one of distributing value to as many as possible....at least that is the way I am continuing to think about it and am operating my building on...or at least slowly transitioning my building to....

52 sats \ 0 replies \ @siggy47 OP 5 Jun

I don't disagree with your assessment re it being part of the fiat system. I also hope bitcoin improves things. I manage predominantly small retail centers, with a smattering of apartment buildings, offices, and single family. I am not using any algos for rent. Frankly, it's difficult to even break even at this point. We're constrained from raising rents for the simple reason that our tenants are struggling too. Meanwhile, expenses have soared ridiculously. This algo scapegoating seems to ignore the fact that landlords are naturally constrained by the market.

54 sats \ 0 replies \ @0xbitcoiner 5 Jun

If one of the algorithm's parameters is the amount of money in circulation, then the problem already has to do with money printing. :)