Comment Re:Algorithm (Score 5, Informative) 95
1 The landlords get together over meal, negotiate prices: "I want to charge at least $2000/month for a one-bedroom..."
2 The landlords all call "Vinnie" for pricing advice: "Hey Vinnie, what's the going rate for a one-bedroom?..." Vinnie knows what everyone else is charging, so the landlords all ask the same rent.
3 Replace Vinnie with Vinnie-5000, basically a bot that suggests rents: "VINNIE-5000 recommends you charge $2000 for a one-bedroom."
All three scenarios are examples of collusion. The fact that we replaced person-to-person negotiation with a machine doesn't change the collusion part.
Before RealPage, standard practice for big landlords was to try to keep all their units rented as much as possible, discounting rents as necessary to get or keep tenants. RealPage takes the opposite tack: RP advises landlords what to charge, and RP advises landlords to stay firm on rents: no discounts. Existing long-term (e.g. desirable) tenants get the the same rent increases as a just-vacated unit. Result: renters see the same pricing everywhere, because the landlords are colluding. Existing tenants outraged by a rent increase won't leave, because they can't find a better deal anywhere else. Over time, rents are ratcheted up, and landlords make more $$$.
Here's yet another way to look at it: Why would all the big landlords in a given city agree to pay RP for "advice" about rents? Could it be that landlords make more $$$ using RP?