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corporate landlords
Ignore the Wall Street-Funded "Science" Attacking Rent Control
We’ve seen that corporate landlords—and the economists who do their bidding—will do anything to generate billions and billions in profits by charging excessive rents year after year to vulnerable tenants with no ability to fight back.
Sep 12, 2024
If you tune into CNBC on any given morning, you will hear various economists proclaim with confidence wildly different interpretations of economic events. The same goes for what market indicators will mean for the 2024 election.
Many an investor has lost a fortune following the advice of "expert" economists. Despite its lofty claims, economics is not a “science”; it is a social science which relies on interpretations of human behavior with a subjective component. It is about as reliable as seismology: Have you noticed that most earthquakes occur on faults previously unknown?
Economists have a lousy track record at predicting recessions, which should be a source of humility. How many economists warned us of the Great Recession? Almost none.
Sure, economists are smart people, and their academic work can help to steer the ship of state and industry. However, they have no business wading into the political realm to influence voters based on their "expert" opinions.
If a lack of precision wasn't enough to expect economists to act with caution, there is the matter of corruption. Economists are paid by corporate interests to bless their profit motives. There is an inherent conflict of interest in being paid by an industry to provide the best opinion and supposed objectivity that only big money can buy. Economists are routinely paid vast sums by the highest bidder to render opinions in anti-trust lawsuits.
When the pre-purchased masters of dismal science tell you that helping renters put food on the table will destroy affordable housing, look closely at who is footing the bill for the "scientific" research.
Unlike writing for a major medical journal that rigorously investigates potential conflicts of interest, economics is an accountability-free zone. You seldom hear disclaimers that a particular economist is paid to have an opinion that supports a selfish motive. The public is rightly cynical or just flat-out ignores economists. Case in point: Tens of millions of people didn't get the memo that the U.S. economy is thriving because it isn't thriving for them. Economic terms like "pricing power" mask that the true meaning is price gouging.
A basic flaw in most economic thinking is that it begins with this premise: Maximizing profits benefits everyone. This is glaringly false when it comes to housing. In recent years, a massive wealth transfer has taken place, squeezing money from the poor and the working class and transferring it to billionaires. Some of these very same well-heeled economists are telling us that rent control is inherently disastrous economically. Yet some of the greatest cities in the world, such as New York, regulate rents.
In reality, there are many economists who believe that rent control helps keep people in their homes. Rent control is much like the minimum wage—the sky doesn't fall when the minimum wage goes up. And the real estate market won't tank because of rent control. When workers or tenants have more money in their pockets, it keeps them afloat and generates more economic activity.
In fact, a group of 32 top economists wrote a letter to the Biden administration last year, supporting rent control. They wrote that rent control will “protect tenants, stabilize neighborhoods, promote income diversity in regional economies, and improve the long-term outlook for housing affordability.” They also added, referring to predatory landlords, that “we have seen the devastating impact of a poorly regulated housing market on people’s livelihoods, as already unaffordable rental prices outpace wage growth.” They understand that only rent control will rein in the greed of corporate landlords.
That’s important. We’ve seen that corporate landlords will do anything to generate more billions by charging excessive rents year after year, and the RealPage scandal is the perfect example. Using a RealPage software program, a cartel of corporate landlords—many of whom are the largest landlords in the country—wildly inflated rents in cities across America. Now, the Department of Justice—along with numerous state attorneys general—has sued RealPage, while dozens of tenants have filed anti-trust lawsuits against RealPage and corporate landlords. It’s yet another reminder that rent regulations are glaringly needed.
So, when the pre-purchased masters of dismal science tell you that helping renters put food on the table will destroy affordable housing, look closely at who is footing the bill for the "scientific" research. Use your horse sense to determine what you know to be best for helping people in need: Rent control.
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DOJ Files Rent-Fixing Lawsuit Against Corporate Landlords' Go-To Software Firm
"Today is a good day for renters and families and a bad day for predatory landlords," said one advocate.
Aug 23, 2024
Executives at the property management software company RealPage claimed they had the "greater good" in mind when they offered corporate landlords a price-fixing algorithm service, said the U.S. Department of Justice as it filed a lawsuit Friday against the firm—but the scheme allegedly drove rental costs up in communities across the country, contributing to the housing crisis.
The antitrust lawsuit, filed with attorneys general from states including California and Colorado, accused RealPage of using confidential data about its clients to algorithmically determine the highest price renters would pay, using its AI software.
U.S. Attorney General Merrick Garland and other officials said the company has violated antitrust laws by providing the service, which gives corporate landlords recommended rental prices and allows them to align prices with one another instead of having to compete.
Assistant Attorney General Jonathan Kanter said the lawsuit is "best understood in the words of RealPage's own executives," who have said the company's software allows landlords to "drive every possible opportunity to increase price, even in the most downward trending or unexpected conditions."
"RealPage tells landlords that it would prefer everybody succeeding versus essentially trying to compete against one another," said Kanter. "But that's not how free markets work. Competition among landlords, not RealPage, should determine prices for renters."
Garland added that "Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law."
As Common Dreams reported in June, RealPage and the corporate landlords that rely on it has come under the scrutiny of watchdogs including Accountable.US, which found that the six largest property management firms brought in a combined $300 million in increased profits in the first quarter of 2024, thanks largely to rent hikes.
The windfall came as rent prices have skyrocketed by more than 31% since 2019, while wages have gone up by just 23%.
RealPage's algorithm is alleged to have helped fix rent prices for about 16 million rental units across the country, said Accountable.US.
"Today is a good day for renters and families and a bad day for predatory landlords," said Lindsay Owens, executive director of the progressive think tank Groundwork Collaborative. "The Department of Justice is right to take on the affordability crisis that RealPage has been supercharging. Algorithms are being used to unfairly drive up prices for housing, meat, and more. This price-fixing must be stopped."
Caroline Ciccone, president of Accountable.US, said Friday's lawsuit shows that "the Justice Department sees evidence of a major rental price-fixing conspiracy by RealPage that extends to metro areas around the country."
"We've documented how many of the same landlord companies that were sued in the initial rent fixing lawsuit have boasted of massive profits after jacking up rents," said Ciccone. "Any property company that uses RealPage in one of these states should face a serious probe. No renter in America should be price gouged under a potentially illegal rent fixing scheme."
Accountable.US added in a social media post that "while rents soared, RealPage executives bragged about how their software could 'maximize' profits, even in the face of a housing crisis."
Andrea Beaty, research director for the Revolving Door Project, said RealPage's actions have "left tenants across the country paying the literal price of corporate greed, even in the midst of a global pandemic."
"This lawsuit will hopefully usher forth renewed corporate accountability in the rental market beyond RealPage, which is far from the only corporation capitalizing on tenant's struggles to live in safe and affordable homes," said Beaty. "We hope that in addition to the bipartisan set of eight state attorneys general suing RealPage, even more attorneys general will sign on in response to RealPage's actions to drive up rental costs in communities in their states."
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Harris to Target Predatory Wall Street Landlords With Four-Year Housing Plan
The Democratic nominee is expected to endorse a crackdown on algorithmic price-setting by big landlords and an end to tax breaks for corporate investors that buy up single-family homes.
Aug 16, 2024
Democratic presidential nominee Kamala Harris on Friday is set to outline a four-year housing plan that would promote the construction of 3 million new housing units, provide substantial down-payment aid to first-time homebuyers, and strip away tax incentives for corporate investors that
purchase single-family homes and drive up prices to pad their bottom lines.
Harris'
proposals to tackle the nation's worsening housing crisis are part of a broader economic agenda that the vice president will lay out in a speech Friday afternoon in North Carolina.
Harris, who recently pledged to "take on corporate landlords and cap unfair rent increases," is expected to urge Congress to pass a pair of bills that would crack down on algorithmic price-setting by big landlords and bar corporate investors who buy up 50 or more single-family rental homes from taking advantage of tax breaks, building on President Joe Biden's push for corporate landlords to cap rent hikes.
A recent report by the Government Accountability Office (GAO) found that just 32 institutional investors owned a combined 450,000 single-family homes in the U.S. and the five largest investors owned nearly 300,000 homes. Institutional investors control 25% of the single-family rental housing market in Atlanta, Georgia, according to the GAO.
Another major component of Harris' housing plan calls for providing up to $25,000 in down-payment assistance to "working families who have paid their rent on time for two years and are buying their first home."
Harris' campaign said the plan would "expand the reach of down-payment assistance, allowing over 4 million first-time buyers over four years to get significant down-payment assistance."
"Trump likes to talk about being a builder, but when he was president, he simply never got it done. Now, his Project 2025 agenda will make it more expensive to rent or buy a home," the Harris campaign said Thursday. "Year after year during his presidency, Trump tried to gut rental assistance programs. New home construction slowed while Trump was in office—tightening the housing crunch and enabling his wealthy friends to profit."
Housing justice advocates applauded the emerging details of Harris' plan, arguing that persistent tenant organizing has helped elevate the hardships of renters to the top of the Democratic Party's priority list for 2024 and beyond.
"How did these get on the agenda? Organized renters making good trouble," the Alliance for Housing Justice wrote on social media.
In recent months, progressives and tenant organizers have worked to make housing central to the 2024 campaign as renters across the U.S. struggle to make their monthly payments and as sky-high prices, elevated interest rates, and supply shortages box out first-time homebuyers. Housing costs accounted for roughly 90% of the overall increase in the Consumer Price Index last month, according to the Bureau of Labor Statistics.
A recent research brief by Russell Weaver of Cornell University stressed that tenants impacted by the nation's housing affordability crisis are a "large, untapped political base—especially for Democrats and progressives."
"Candidates who campaign on housing affordability and tenant protections have the potential to significantly boost renter turnout, which could be decisive in tightly contested races," Weaver said.
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