The Real Reason the Rent Is Too Damn High: Greed-Driven Corporate Algorithms
Have you ever wondered why your rent is so damn high? Ask any economist or housing expert and they’ll tell you the reason is simple: There’s not enough housing. Too many tenants are competing for too few units, which drives
Many economists and housing experts attribute the reason for high rents to a simple lack of affordable housing. However, this straightforward supply-side explanation overlooks a crucial factor: corporate power. Landlords have long held the advantage, knowing that moving is a costly and stressful process for tenants. Consequently, they often raise rents year after year, anticipating that most renters would rather endure the hike than deal with the inconvenience of finding a new place.
Scarcity in rental markets, like any other market, creates power imbalances. In a seller's market, tenants face limited options to vote with their feet. In recent years, corporate consolidation and algorithmic pricing tools have exacerbated these imbalances. Landlords no longer rely on informal collusion over backyard barbecues to fix prices; they coordinate using sophisticated software designed for this purpose.
Stephen Winn, a Texan entrepreneur, founded RealPage in 1998, launching its first real estate software system in 2001. Two years later, RealPage acquired YieldStar, which became the backbone of its price-coordination capabilities. Jeffrey Roper, the founder of YieldStar, later joined RealPage as its president and principal scientist.
Roper, described by himself as a "numbers nerd," developed what would become RealPage's signature suite of AI-powered "revenue management software," effectively enabling landlords to engage in price-fixing.
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