from Hacker News

Canadian mega landlord using AI 'pricing scheme' as it hikes rents

by mattm on 9/5/24, 1:59 AM with 154 comments

• by meeby on 9/5/24, 4:00 AM

  It’s a shift in collective power. At the core of the issue is landlords communicating together to all set fixed high rents has been illegal for decades. This is collective rent fixing with an extra step. The “AI” here is just a buzzword, it’s masking a black box where many landlords pump in lots of data and a black box algorithm spits out higher rents. The issue occurs when a critical mass of landlords use the same service. The market readjusts from free market competition to the maximum the market can bear without collapsing, exactly what the anti-collusion laws were design to prevent. The economic drivers are reversed.

  Like generative AI for art, it doesn’t cleanly fit into any existing governance. I would assume new, and irritating complex, laws will be attempted to be written to control this development as it has more immediate real works impact than other forms of “AI”.

• by dools on 9/5/24, 3:11 AM

  If the seller is able to unilaterally hike rents beyond the level which people are willing to pay but they pay it anyway because the alternative is total life failure, then it's obviously not a functioning market.

• by metrognome on 9/5/24, 3:31 AM

  I live in an apartment complex that uses RealPage. My roommates and I re-signed the lease earlier this year, with a projected 15% rent price increase. We then walked to our leasing office to ask about it, they simply cancelled the increase. We're now paying the same rate we were last year.

  I am fairly certain that 15% increase was the automatic recommendation by RealPage.

• by anileated on 9/5/24, 3:21 AM

  The event horizon of ML offers much potential for “disruption” across the various markets. (I bet there will be products that actually do not do significant ML at this scale but claim they “do AI” if it lets them claim that it is transformative magic and not price collusion/copyright laundering/next thing.)

  Of course, if your pricing assistant is trained on pricing & occupancy data across all landlords, you and other users are obviously colluding.

  Apparently, though, you can successfully pretend you are not colluding. “AI told me to raise prices” and as we observe with copyright laundering so far legal system does not care what AI ingested. Inputs magically disappear into the black box of magic.

  Dare not think otherwise lest Nvidia tanks.

• by deisteve on 9/5/24, 2:27 AM

  ive lost all faith in my own country. there is no leadership, no rules, no regulation. UN called Canada a "modern serfdom with slavery"

• by ChrisArchitect on 9/5/24, 4:13 AM

  Related case from the U.S.:

  DOJ sues realpage for algorithmic pricing scheme that harms renters

  https://news.ycombinator.com/item?id=41330007

• by collaborative on 9/5/24, 4:59 AM

  This is all clearly a consequence of not enough supply

  Question for anyone that knows: how does it end? Will some landlords go bust and get bought by 1 or 2 mega corpos, and then rinse and repeat until it's a McDonald's/Burger King monopoly? Will all rentals be owned by a single entity? Are they already owned by one? I heard all these corps are ultimately owned by Blackrock

  I am just trying to see what possibly even worse crisis will spawn from this crisis. Population levels are expected to decrease over the coming decades. Will that trigger a collapse in rents? Where will "greed" move to, what novel forms of collusion and exploitation will we suffer instead of it being all focused on rent and property?

  Edit: I just realised that the shift may already be happening in the form of other basic necessity industries colluding: utilities, car insurance, "public" transport, food

• by ars on 9/5/24, 3:26 AM

  "“Everything starts at like $2,200 for a new place in Toronto, or even the old ones, if they’re renovated units,” she said, noting that her monthly take-home income is $3,100."

  The article blames "AI" for raising rents, and then later says, "well actually, everyone raised rents".

  You can have all the AI in the world, and even all the collusion you can manage, but competition still exists, raise rent to the point that people won't rent, you'll have an empty apartment. Lower it (i.e. ignore the collusion) and you'll fill that spot.

  The law of Supply and Demand still works.

  The only kind of collusion that might break that law is if landlords are forced by the agreement not to lower rent to compete.

  It's really very simple: What's the vacancy rate? If it's low, prices are going up, it's as simple as that. Forget the boogeyman (AKA AI), build more houses.

• by giarc on 9/5/24, 4:02 AM

  How does this happen? Rent increases in Ontario are capped. Here is the limit for 2025.

  >The rent increase guideline for 2025 is 2.5%.

  >The guideline is the maximum a landlord can increase most tenants’ rent during a year without the approval of the Landlord and Tenant Board.

  https://www.ontario.ca/page/residential-rent-increases

• by 99_00 on 9/5/24, 5:22 AM

  Every residential land lord in Canada is increasingly rent the maximum legally allowed amount.

  They don’t need AI or analysis.

  Canada has record immigration levels. And at the same time cities across the country decided, with the support of voters, that new residential development can not be on undeveloped lands. It must be on previously developed lands and increase density

  Of course redevelopment is more expensive, takes longer, requires more consultation and planning.

  The result is a severe shortage of housing.

  Instead of solving this with suburban sprawl, which isn’t ideal but is necessary, politician, voters, and density ideologist choose to blame a scapegoat.

  Landlords are an obvious candidate. Adding AI to the mix makes it a trendy story.

• by andrewstuart on 9/5/24, 3:59 AM

  Mega landlords and rich people are the only ones who will own houses in the future.

  Actually maybe that future is now.

• by Fire-Dragon-DoL on 9/8/24, 4:40 PM

  This is specific to Ontario. I was curious how they achieved this, given in BC all rent is controlled. There are workarounds, but it's not straightforward

• by CalRobert on 9/5/24, 4:58 AM

  Of course, schemes like this would be hard or impossible if enough housing were built.

• by bobbylarrybobby on 9/5/24, 3:52 AM

  I have nothing to contribute except that the favicon logo for The Breach is fantastic

• by Fire-Dragon-DoL on 9/8/24, 5:04 PM

  Would it help if we said that you can't own more than x properties for rent? Clearly a mega landlord is a problem

• by 2Gkashmiri on 9/5/24, 2:54 AM

  i dont understand why use "ai" in context of a landlord trying to increase rent.

  what happened to "you paid $100 last year. now from january you pay $120 or vacate?"

• by globalnode on 9/5/24, 5:22 AM

  I'm so sick of these economic arguments about supply and demand over housing. Basic housing should be provided free of charge by the govt using taxes. Anything above basic and we can start talking about market forces.

  Its like arguing about whether to eat apples or oranges on Mars when you can't even get to Mars. Its irrelevant. The alternative is society gets a lot worse for a lot of people and tinkering with plugging legal gaps doesn't address the issue of whether we think people are entitled to a place to live if they are part of our society.

  Going back in time, do you think the local village is going to let its warriors or farmers sleep outside in the cold with no shelter then expect them to work as a community for the benefit of the village elders?

  Its a core issue, everything else is just busywork at this stage.

• by hungie on 9/5/24, 5:27 AM

  We shouldn't permit "mega corporate landlords" to exist. It doesn't take a Marxist to see that consolidation of real estate into fewer and larger corporate holdings is going to snowball in really destructive ways.

• by cwilby on 9/5/24, 3:40 AM

  gross

• by benreesman on 9/5/24, 3:48 AM

  Just remember that the entire modern tech ecosystem from pg to Garry to sama are super cool with the spokesperson in chief for handing the reigns of capitalism over to those who view competition, efficiency, markets and freedom with utter contempt:

  https://youtu.be/zI7hbEuopLI?si=MJaJ9lVGJqLVUiTG

• by cute_boi on 9/5/24, 4:41 AM

  I don't understand why is government sleeping when greedy landlords are trying to extremely abuse basic necessity. Housing is a basic necessity and landlords are being extremely exploitative and government can't do anything...

• by Findeton on 9/5/24, 2:06 AM

  25b in assets, so that's less than 0.1% of all properties in Canada. And they say they're rigging prices? How so?