Makers of Rent-Setting Software Sue California City Over Ban (apnews.com)
- Reference: 0176937547
- News link: https://yro.slashdot.org/story/25/04/05/2124202/makers-of-rent-setting-software-sue-california-city-over-ban
- Source link: https://apnews.com/article/realpage-lawsuit-berkeley-rental-software-algorithm-7eed2dc41ad657745f9bdc674386abfd
But then real estate software company RealPage filed a federal lawsuit against Berkeley on Wednesday:
> Texas-based RealPage said Berkeley's ordinance, which goes into effect this month, violates the company's free speech rights and is the result of an "intentional campaign of misinformation and often-repeated false claims" about its products.
>
> The [2]U.S. Department of Justice sued Realpage in August under former President Joe Biden, saying its algorithm combines confidential information from each real estate management company in ways that enable landlords to align prices and avoid competition that would otherwise push down rents. That amounts to cartel-like illegal price collusion, prosecutors said. RealPage's clients include huge landlords who collectively oversee millions of units across the U.S. In the lawsuit, the Department of Justice pointed to RealPage executives' own words about how their product maximizes prices for landlords. One executive said, "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."
>
> San Francisco, Philadelphia and Minneapolis have since passed ordinances restricting landlords from using rental algorithms. The Department of Justice case remains ongoing, as do lawsuits against RealPage brought by tenants and the attorneys general of Arizona and Washington, D.C...
>
> [On a conference call, RealPage attorney Stephen Weissman told reporters] RealPage officials were never given an opportunity to present their arguments to the Berkeley City Council before the ordinance was passed and said the company is considering legal action against other cities that have passed similar policies, including [3]San Francisco .
RealPage blames high rents not on the software they make, but on a lack of housing supply...
[1] https://apnews.com/article/realpage-lawsuit-berkeley-rental-software-algorithm-7eed2dc41ad657745f9bdc674386abfd
[2] https://apnews.com/article/realpage-antitrust-lawsuit-justice-department-rents-e9d0a2fcab6a7f2200847b36c4fc1aca
[3] https://news.slashdot.org/story/24/08/01/2117231/san-francisco-supervisors-approve-ban-on-rent-setting-software
Anything's possible with the Trump administration (Score:5, Insightful)
This software is crystal clear in illegal antitrust violation. But hey, with the Trump packed courts full of absolute total lunatics who could care less what the law says as long as the checks cash and their luxury motor coaches are nice, literally anything is possible.
I know most people around here bought houses when they were cheap and heavily subsidized by the government so you think it's a okay and you don't much care. This will bite you in the ass too. You can't keep sucking every single penny out of the economy for everyone but yourself and not suffer some consequences and that rental property you bought 15 years ago does not make you a member of the elite.
They will use the medical system to suck your money dry, and then take your property. That's their plan. That and tariffs and other forms of national sales tax. At the end of the day you're still going to spend the bulk of your income not on buying up companies and property but on just day-to-day living. And They will use that too.
I'm not saying this because I think anyone reading it will believe that. I'm just screaming into the void at this point. I don't think we have any chance left. The people who should be securing our rights or bickering too much to do anything about it and leaving a power vacuum so that the 0.1% can devour us all. I think America is finished. I think the whole civilization is finished with it. I'd love to be proven wrong but so far everything's on track for a worst case scenario.
But hey I'm a lib, and you guys sure owned me. Have fun without your heart medication in a few years.
Re: (Score:2)
> None of which have anything to do with how states govern and regulate rental markets, you fucking lunatic.
Did you read the headline but not the summary? Quoting the summary above:
> ...The U.S. Department of Justice sued Realpage in August under former President Joe Biden, saying its algorithm combines confidential information from each real estate management company in ways that enable landlords to align prices and avoid competition that would otherwise push down rents. That amounts to cartel-like illegal price collusion, prosecutors said. ...
The article we're discussing is not only about states.
So Trump can't stop every investigation (Score:3, Interesting)
Immediately. And he wouldn't want to anyway because they haven't bribed him yet. But eventually they'll get around to throwing a few tens of millions of Donald Trump or his kids and he'll pull the federal investigation.
And yes I was a well aware that Biden was investigating this. It was one of the many many many reasons I desperately hoped he or Kamala was going to win. But of course Americans can't do sensible things and even when we try billionaires will cock block us using voter suppression. 3.5 mill
Re: Anything's possible with the Trump administrat (Score:2)
The DoJ *was* investigating them. And Realpage sued Berkeley in *federal* court. Bozo.
Re: (Score:2)
> None of which have anything to do with how states govern and regulate rental markets, you fucking lunatic.
Umm...:
> This software is crystal clear in illegal antitrust violation.
It's right there in the first line. You're free to disagree with it, but it very clearly has to do with how states govern and regulate rental markets.
Re: (Score:2)
It'll be ... interesting ... to see what kinds of incentives are required to ensure that states go along with supreme court rulings going forward.
Basically (Score:2, Funny)
setup-cartel.exe
RealPage is CaaS (Score:4, Insightful)
RealPage is Collusion as a Service(CaaS).
They cannot prove otherwise.
Re: (Score:3)
> RealPage is Collusion as a Service(CaaS).
> They cannot prove otherwise.
They don't have to. It's the ones making the assertion that have to prove their assertion.
When algorithms are outlawed... (Score:3, Insightful)
Here's the thing: every business decision is an algorithm, whether implemented by a human or by a computer. Instead of outlawing algorithms, how about outlawing predatory pricing and price gouging?
Algorithm (Score:2)
This is what I was going to post. Are humans allowed to use the same algorithm? How are rents supposed to be set? Rolling dice?
Re: (Score:3)
" Are humans allowed to use the same algorithm?"
That really ignores the whole price-setting collusion part, doesn't it?
"We all used the same algo and it told us all to raise prices at the same time, aw shucks"
Re:Algorithm (Score:4, Informative)
> This is what I was going to post. Are humans allowed to use the same algorithm? How are rents supposed to be set? Rolling dice?
The issue is RealPage allows landlords to collude with one another to set prices. For example, if a one bedroom in the city goes for $2,000/month, a one bedroom in the suburbs can also go for $2,000/month even though the two are in distinctly different areas.
The same with any extra fees such as paying month by month rather than having a yearly lease.
You can read the [1]Justice Department's complaint here [justice.gov] where they outline the collusion of RealPage.
[1] https://www.justice.gov/atr/media/1365471/dl?inline
Re:When algorithms are outlawed... (Score:4, Informative)
Here's the thing: every business decision is an algorithm, whether implemented by a human or by a computer
The ban is on the sale or use of algorithmic devices to set rent prices or manage vacancies as defined
> 13.63.020 Definitions.
> A. “Algorithmic device” means a device such as a software program that uses one
> or more algorithms to perform calculations of non-public competitor data concerning
> local or statewide rents or occupancy levels , for the purpose of advising a landlord
> whether to leave their unit vacant or on the amount of rent that the landlord may obtain
> from a tenant. “Algorithmic device” includes a product that incorporates an algorithmic
> device, but does not include (a) any report published by a trade association that
> receives renter data and publishes it in an aggregated and anonymous manner or (b) a
> product used for the purpose of establishing rent or income limits in accordance with the
> affordable housing guidelines of a local government, the state, the federal government,
> or other political subdivision.
> B. “Non-public competitor data” means information that is not available to the
> general public, including information about actual rent prices, occupancy rates, lease
> start and end dates, and similar data, regardless whether the information is attributable
> to a specific competitor or anonymized, and regardless whether it is derived from or
> otherwise provided by another person that competes in the same market or a related
> market.
RECOMMENDATION
Adopt an ordinance amending the Municipal Code adding section 13.63 to prohibit the
sale or use of algorithmic devices to set rents or manage occupancy levels for
residential dwelling units.
The ordinance would have a positive financial impact on the city’s tenants as there is
documented evidence that use of these algorithmic devices has led to year-over-year
rent increases of 5%-12% across housing markets. A prohibition on the sale and use of
these devices will lead to reduced rents and elimination of artificial scarcity.
CURRENT SITUATION AND ITS EFFECTS
The proposed ordinance is provided as Attachment 1. Attachment 2 is a PowerPoint
presentation regarding the proposed ordinance provided to the Housing Advisory
Commission (HAC) at its October 10, 2024 meeting. A new type of rental software
(often referred to as algorithmic devices) is increasing rents and vacancy rates by
allowing large landlords to collude on pricing decisions. Third-party revenue
management companies collect and combine proprietary large landlord data and make
pricing and occupancy recommendations. These recommendations allow landlords to
manipulate the market and the practice amounts to illegal price-fixing.
The use of
algorithmic devices in setting rents and occupancy levels contributes to double-digit rent
increases, increased rates of eviction, and artificial housing scarcity. Lee Hepner, an
antitrust attorney at the American Economic Liberties Project, states that “widespread
use of price fixing software presents a new front in the housing affordability crisis.”
While numerous lawsuits have been filed to prohibit such antitrust activities, these
cases may take years to resolve. This ordinance prohibits the sale or use of algorithmic
devices for the purpose of setting rents to bring immediate relief to Berkeley tenants, as
well as to put landlords who have been using these devices on equal footing with those
who are willing to adhere to fair standards for setting rental rates.
Re: (Score:2)
> Instead of outlawing algorithms, how about outlawing predatory pricing and price gouging?
I think the key thing to outlaw here is price-fixing. If sellers are making back-room deals with each other so that they all charge the same rates so they don't have to compete on price, you don't have a free market anymore, you have an oligopoly. That they are doing that via a web site is just an implementation detail.
Re: (Score:3)
> Instead of outlawing algorithms, how about outlawing predatory pricing and price gouging?
Price fixing through collusion is, in fact, outlawed. The algorithm in question is just a way of laundering collusion.
FIRST AMENDMENT (Score:1, Informative)
The First Amendment to the Constitution of the United States prevents the government from abridging freedom of speech BUT IT HAS LIMITS and some of those have to do with "conspiracies" to violate the laws. That means if I own a gas station and you own a gas station and we get together for drinks and "just discuss" how those rates could just go up to $4,00/gallon tomorrow at 0800, well then, does the government have the legal right to stop us from having that discussion?
No, it doesn't. But if we ACT on tha
Re: (Score:2, Interesting)
This is pretty much correct since the law cares about intention aka mens rea , it's a very important aspect of our legal system, the difference between manslaughter and murder and then murder in the 2nd versus murder in the 1st; what was the state of mind of the accused, what were they intending to do.
Re: (Score:2)
This isn't a criminal case.
Re: (Score:2)
If it's not criminal it's not legal?
What do you think a conspiracy versus a non-conspiracy is besides state of mind?
Re: (Score:2)
Are you an attorney? I am not.
Check here:
[1]https://www.schmidtandclark.co... [schmidtandclark.com]
Then here:
[2]https://www.jstor.org/stable/2... [jstor.org]
"The key to explaining the relatively minor role of mens rea in tort law is found to lie in the emphasis tort law gives to the interests of victims, and to social values, in constructing its concept of responsibility. This approach also helps to explain the greater importance of mens rea in criminal law."
This is a lawsuit, a tort. They are fighting the ban, the ban is because of the reality o
[1] https://www.schmidtandclark.com/difference-between-tort-and-crime
[2] https://www.jstor.org/stable/20468340
Re: (Score:2)
Criminality and criminal intent are also important in civil cases but then decided to different standards. You cannot profit from crimes so you can be sued in a civil case for price fixing. The nice thing is that it's then easier to show the price fixing because you don't have to "prove" it beyond reasonable doubt. You just have to show that it's likely happening on the balance of probabilities (even in the face of any opposing evidence the other side puts up, of course).
Re: (Score:2)
The First Amendment to the Constitution of the United States prevents the government from abridging freedom of speech BUT IT HAS LIMITS and some of those have to do with "conspiracies" to violate the laws
Also the law does not forbid or impede speech. It prohibits purchasing or consulting an algorithmic device to make decisions about refusing to rent something out or setting the price you will rent the thing out . Based on competitor non-public data.
It seems like it would be perfectly legal to sell or p
Re: (Score:2)
TFS: the Department of Justice pointed to RealPage executives' own words about how their product maximizes prices for landlords. One executive said, "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."
RealPage used its First Amendment rights to say the above.
It *should* have used it's Fifth Amendment rights to keep its mouth shut.
Who needs algorithms? (Score:2)
Companies have been doing this sort of stuff forever. There is a company that collects information from major employers about what they pay for various job descriptions. They summarize the results and send them back to their patrons, who use the information to set salary ranges. It is all need and clean since the various companies involved never actually talk to each other. You do not need an algorithm; an Excel spreadsheet would be quite adequate.
Oh fuck off you idiots. (Score:2)
Nobody is going to subscribe to your software to make LESS money.
Are they banning the wrong thing? (Score:2)
We we ban algorithms, meaning any methodical, formulaic process for determining prices, what is the alternative? Unregulated free market live auctions for all rentals? Would that be better? Stock market has bubbles, crashes, etc. What would that do to rentals?
The issue in this case seems to be sharing non-public data between landlords with the purpose of determining prices, which is antitrust collusion. Perhaps what we need to explicitly ban is using this non-public information in any algorithms, rather
Re: (Score:2)
that's what the law does
Screw them all! (Score:2)
Screw RealPage, Entrata, and AppFolio. They know that their software is perfectly capable of analyzing the real estate market and price such that other algorithmic AIs will price accordingly. RealPage et al hope that now that the Real Estate Loser in chief has become president again they can get the DoJ to drop cases, and will intimidate Berkeley and other cities into dropping or not implementing similar ordinances.
When Trump said America was heading into a new golden age, he was referring to go back to the
Not free speech (Score:2)
> ... violates the company's free speech ...
First, a business doesn't have a right to free speech. Second, I don't see a problem with your web-site telling all consumers the recommended price for each suburb: That's what you mean by "free" right: Information given to everyone, without additional cost? (Both meanings of "free" are applied to your service.)
> ... high rents, not on the software ...
Then landlords don't need your software/services, they'll instantly be mega-rich from government refusing to build more suburbs. Now, it's sounds like the landlords are victims and the governmen
Say it aint so! (Score:4, Informative)
The People's Republic of Berkeley is biased against a company that sells rent-gouging-as-a-service?
I'm Shocked! Shocked I Say!
...well, not that shocked.
Re: (Score:2)
If you agree it's rent-gouging, then did you mean that as a compliment for Berkeley?
Re: (Score:1)
Is that a pejorative to you?
It is a name the city uses to describe itself. It is emblematic of the politics: "of, by, and for the people". It is the name on (some of) the signs in town.
When we want to make fun of the place, we call it Berserkly -cause they are all crazy there.
Foreign trolls just don't understand...
Re: (Score:2, Insightful)
I’m a native English speaker and don’t have the faintest clue about the pseudo intellectual word salad you’re spewing.
Re: (Score:2)
The US Department of Justice, the federal government, sued RealPage..
Multiple cities have accused RealPage of facilitating price fixing.
There are long-standing laws on the books against price-fixing enforced by the Federal Trade Commission and antitrust and competition laws enforced by the Department of Justice..
.
This is pretty clear-cut facilitation of anti-consumer, anti-competitive corporate collusion.
If there is any bias to be had in this it is bias against a competitive marketplace and for tools f