economy
The tech ban driving up housing prices
New York City’s rental market is arguably the country’s worst. Its metro area’s housing shortage exceeds 400,000 homes. Median asking rent has risen 7.3% year over year in New York City. San Francisco rents have risen twice as fast at 16.9%. These cities now have the nation’s highest rents.
TL;DR
- New York City and San Francisco face severe housing shortages and high rents.
- Many cities and states have banned rent-setting software, accusing it of price fixing.
- This software analyzes market data to recommend optimal rental prices, aiming to minimize vacancies and improve profitability.
- The Department of Justice sued RealPage for alleged price coordination but settled without proving collusion.
- Critics argue the bans stem from a misunderstanding of how algorithms facilitate market price discovery, akin to F. A. Hayek's theories on efficient resource allocation.
- Banning this technology may prevent rents from accurately reflecting market conditions and exacerbate housing scarcity.