This is “the invisible hand of the free market” right wing punnits scream about.
It’s not market forces, it is illegal (or at best very dark grey rule-bending-in-half) collusion.
This is not a free market. The “invisible hand” reverse to market forces.
In a free market, a cartel raising prices would result in increase supply as a result of capital moving into the market seeking profits. In other words the cartel’s action would modify the market in such a way as to nullify the cartel.
But in our current housing, supply is artificially and heavily constrained by government fiat. It is not free and that is specifically the reason why this kind of price fixing is possible.
The reason why free markets are important is because it prevents this kind of thing.
This is the best summary I could come up with:
"RealPage and the defendant landlords illegally colluded to artificially raise rents by participating in a centralized, anticompetitive scheme, causing District residents to pay millions of dollars above fair market prices,” Schwalb said in a release tied to the complaint.
RealPage and the property management firms utilizing their software were the subject of a class-action suit filed in the Southern District of California in October 2022, alleging the “cartel” of artificially inflating prices.
A developer who worked on YieldStar’s algorithm told ProPublica that rental leasing agents had “too much empathy” compared to the software’s pricing systems.
Its creation of “work groups” of would-be rival landlords could also invite antitrust scrutiny, a former federal prosecutor told ProPublica.
In response to ProPublica’s reporting, a RealPage representative said the firm used “aggregated market data from a variety of sources in a legally compliant manner.”
A slide from an internal Greystar presentation cited in the complaint suggested that “at least 95 percent” of RealPage prices should be used, as “Discipline of using revenue management increased more consistent outcomes.”
The original article contains 527 words, the summary contains 173 words. Saved 67%. I’m a bot and I’m open source!
