How a Secret Rent Algorithm Pushes Rents Higher: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." [...] "The net effect of driving revenue and pushing people out was $10 million in income," Campo said. "I think that shows keeping the heads in the beds above all else is not always the best strategy." [...]
The company had been seeking occupancy levels of 97% or 98% in markets where it was a leader, Winn said. But when it began using YieldStar, managers saw that raising rents and leaving some apartments vacant made more money. [...]
Davidoff said he was careful to avoid features that might run counter not only to anti-discrimination laws, such as the Fair Housing Act, but also those that bar competitors from conspiring to set prices. [...]
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."
I also like how the article uses the pejorative "downrenting" for people who choose to only spend 30% of their income on rent instead of 40% when they have the opportunity, like they're slackers who just aren't pulling their weight. THE LINE IS DISPLEASED.
I read an article a while back with the premise, "Universal Basic Income sounds good, but if deployed at scale, how do you prevent landlords from absorbing it all?" E.g. if every person gets $500/month, rents go up by $500 across the board, and you've just given the real estate industry a handout while helping no one. YieldStar is the kind of system that would both implement and launder that.
This is why we can't have nice United Federations of Planets.
