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 competition.

“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.

  • Wertheimer [any]
    ·
    2 years ago

    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.

    This guy got his start price-fixing for airlines.

    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.”

    . . .

    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.”

    I hate this person so, so much.

    • voice_of_hermes [he/him,any]
      ·
      2 years ago

      It's not collusion if you just pass all the communications through a computer in the middle. Everyone knows that.

      Anyway, notice he just switched industries and is doing exactly the same thing. What a shock that they'll just find a way to hide it a little better.

      • UlyssesT
        ·
        19 days ago

        deleted by creator

        • hexaflexagonbear [he/him]
          ·
          2 years ago

          It's funny that they'll make arguments for that thinking they're so clever and smart, but it's the exact opposite of what anyone even close to an expert would think. Like of course algorithms aren't naturally unbiased and apolitical.

        • Frank [he/him, he/him]
          ·
          2 years ago

          le algorithm being nonpolitical.

          Germany famously using early IBM computers to facilitate the Holocaust.

      • Wertheimer [any]
        ·
        2 years ago

        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.

        • The_Walkening [none/use name]
          ·
          2 years ago

          Great to hear such opposition to an idea from someone who would have been able to do something about it but didn't.

          • Wertheimer [any]
            ·
            2 years ago

            Trump named her acting chairperson, but it will not surprise anyone here to learn that she first joined the FTC under Obama.

        • Frank [he/him, he/him]
          ·
          2 years ago

          I mean they're literally just forming a cartel with a level or two of obfuscation.

    • UlyssesT
      ·
      19 days ago

      deleted by creator

    • usa_suxxx
      ·
      14 days ago

      deleted by creator

    • Frank [he/him, he/him]
      ·
      2 years ago

      “We had no idea.”

      A lot of Bazinga brains are actually like this. I heard endless stories during one of the venture capital booms about extremely intelligent engineers who had never heard of the concept of intellectual property and simply could not be made to understand why they couldn't steal code, ideas, images, text, or anything else from other companies or products. Eventually lawyers had to just tell them "No, or else" because they didn't or could not get it.

      It seems like specialists are often so ignorant of various kinds of general knowledge that they can easily get in to all kinds of trouble, especially legal trouble, because they simply never imagined that it might be against the law to fix prices, or fire people because of a protected class, or dump sewage in to a lake.

      This isn't an excuse, obviously. For one, there are lawyers whose whole job is to keep this from happening. For another it often just betrays a complete indifference to anything beyond their own immediate interests, a deeply selfish lack of curiousity.

    • Mardoniush [she/her]
      ·
      2 years ago

      What of I told you there was a greater threat to a landlord's profit? :mao-aggro-shining: