Comment by gopher_space
2 days ago
Collusion using online management services to fix prices across a region.
I think Washington State is working on legislation around rental services due to this already being a problem in the Seattle area.
“Extra supply” is added to the portfolio containing housing they’ve already purchased. They own part of “existing supply” too.
I live in Seattle, and this is a scapegoat. it's another way to point a finger at anything but massive restrictions on supply. The easiest solution to collusion to keep prices high is to let lots of other people build and compete down price. In Washington, most new construction happens on a very small number of parcels, because that's the only place we allow it.
Nobody concerned about rent price fixing thinks that we don't also need to build more housing here. This is just another part of the problem. Are you defending the practice?
I think it simply doesn't matter. The only reason it could have any impact at all is in an incredibly constrained market. Unconstrain the market and they just won't be able to; it wouldn't work.
Also - I don't think it actually affects prices. It's just that they've gotten good at seeking price equilibrium.
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And yet action gets taken about the rent price fixing, but not about actually encouraging more building.
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Housing is a depreciating asset. Even if you're trying to continuously corner the market, you'll be losing money in the long run if you're not actually renting the units for more than you're buying them for.
If supply can be built to meet demand, trying to corner the market to achieve monopoly rents will fail in the long run.
Land isn't. And the house is depreciating, but not the value of having a rental at that location. My house is worth four times what I bought it for a decade ago. The house itself is depreciating, and because I rent a portion of it, I can claim that depreciation, but the value of the property is going up.
> Housing is a depreciating asset.
It ought to be, but that is not how America works
There are too many competing landlords to form a functional cartel.
Why this collusion doesn’t happen in Austin where rents are falling 2 years in a row?
Collusion on housing only works when there is a shortage. As soon as the shortage ends units go unfilled and landlords defect. Collusion works in industries where supply can change in the short run, tough to do that in real estate. Real estate elasticity is so high though that small collusion can work, but only if there is already a shortage. Yet, again the solution is just build more.