Behind the Bastards - Part One: Why is the Rent So Damn High?

Episode Date: November 8, 2022

Robert is joined by Samantha Mcvey to discuss what is going with the rental market.  (2 part series) Footnotes: https://www.google.com/amp/s/arstechnica.com/informationtechnology/2022/10/rent-going-up-one-companys-algorithm-could-be-why/%3famp=1 https://www.multifamilyexecutive.com/property-management/revenuerevolution-pushing-rents-becomes-the-norm_o  https://extranewsfeed.com/a-history-of-landlords-rent-the-feudal-origins-of-a-nonworking-class-e718e6c82e2f  https://popular.info/p/death-by-eviction  https://www.google.com/amp/s/www.nbcnews.com/news/amp/rcna52111 https://www.nytimes.com/2004/12/08/nyregion/queens-landlordconvicted-in-plot-to-kill-two-tenants.html https://www.google.com/amp/s/amp.theguardian.com/world/2002/may/02/worlddispatch.oliverburkeman https://www.google.com/amp/s/www.laprogressive.com/.amp/homeles sness/studies-find-rent-control-works  https://www.housinghumanright.org/is-billionaire-landlord-sam-zellthe-quintessential-corporate-vulture/ https://www.investopedia.com/articles/investing/102915/how-sam-zell-madehis-fortune.asp   https://www.agriculture.com/news/business/risk-and-reward-aconversation-with-sam-zell  https://www.bloomberg.com/news/articles/2022-09-27/steve-schwarzman-buys-80-millionenglish-country-estate   https://www.google.com/amp/s/m.jpost.com/50-most-influential-jews/article-717735/amp   https://fintechmagazine.com/venture-capital/stephen-a-schwarzman-the-billionare-who-builtblackstone   https://www.investopedia.com/articles/investing/090915/how-stephen-schwarzman-built-blackstonegroup.asp   https://www.invitationtenants.com/blackstone-profits-from-the-foreclosure-crisis/   https://www.institutionalinvestor.com/article/b14zb99vmk6h6n/blackstones-stephen-schwarzman-onnot-wasting-a-serious-crisis https://www.google.com/amp/s/qz.com/2118625/corporate-landlords-are-benefiting-frominflation/amp/ https://www.theatlantic.com/ideas/archive/2020/02/rich-investors-make-easy-scapegoat-risingrents/606607/ https://archive.ph/TjPXE  https://www.npr.org/2022/03/29/1089174630/housing-shortage-newhome-construction-supply- chain#:~:text=The%20Housing%20Shortage%20Is%20Significant,nearl y%2020%25%20last%20year%20alone  https://constructionphysics.substack.com/p/is-there-a-housing-shortage-or-notSee omnystudio.com/listener for privacy information.

Alphabet Boys is a new podcast series that goes inside undercover investigations. In the first season, we're diving into an FBI investigation of the 2020 protests. It involves a cigar-smoking mystery man who drives a silver hearse. And inside his hearse look like a lot of guns. But are federal agents catching bad guys or creating them? He was just waiting for me to set the date, the time, and then for sure he was trying to get it to happen. Listen to Alphabet Boys on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts. Did you know Lance Bass is a Russian-trained astronaut?

That he went through training in a secret facility outside Moscow, hoping to become the youngest person to go to space? Well, I ought to know, because I'm Lance Bass. And I'm hosting a new podcast that tells my crazy story and an even crazier story about a Russian astronaut who found himself stuck in space. With no country to bring him down. With the Soviet Union collapsing around him, he orbited the Earth for 313 days that changed the world.

Listen to The Last Soviet on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts. Well, you know, I just, I don't know, Sophie. I think that you're kind of being unfair when you say the audience is just terrible people and you hate them and you want to throw boiling water from a cast iron skillet on them. I don't know that that's fair, Sophie. That seems kind of mean to me. But Robert, I was reading that. I would never say that about the audience. That was a direct quote from your diary.

Those weren't my words. That's what you said. Sophie, you can't prove that. I mean, it was in your blog. Well, who knows? What's a blog? It was the Zanga site. I remember I followed you. Wow. Wow. That's how old I am. I feel attacked in my own podcast.

My own podcast that I built with my own two hands. Unbelievable. Welcome to Behind the Baskins. Let's say our guest is Samantha Bigway, feminist icon. This is our podcast where I, Robert Evans, am slandered to a terrible degree, unfairly, despite having never done anything wrong. Ever. Hello, Samantha.

I would never. How are you doing, Samantha McFay? Hello. I know, again, I aged myself with the Zango reference. So I know people are going to be like, oh, my God, what is wrong with you? Oh, yeah, we're all old as hell. Everybody here is old as shit. You're welcome.

I'm really glad to throw it back at this early. Yeah. Samantha, what's, what's, what is? That's, that's your whole, that's your whole question. What is? How is it? What is? But how is it?

Yeah, exactly. How is what and what is how? Is there an answer? That's the question. There never was. That's good. Are you asking if she's the host of a podcast called Stuff Mom Never Told You? Is she?

Well, is she? This is why I keep you around, Sophie. I know that you've got this better than I do. Yeah. This has been a great introduction for all of our fans. I guarantee Robert would never have gotten there. Never. I would have gotten there.

It's not. I, I, I love our audience. I love all of everybody except for our audience. You love about 40% of them, statistically speaking. So this is a podcast. It's about bad people. Normally we're doing a little bit of a different thing today, Samantha. And I, and I brought you on, I've brought you on because as I can tell right now, you

exist in a black void based on your guitar. And I assume that that's what goes on in the heart of anybody who understands math. I feel like that was racist. Is that racist? Because I'm Asian. Whoa. Whoa. It's because you exist within a black void.

Oh, okay. Okay. I didn't say anything about you being Asian. Whoa. Jesus. You're welcome. This is how we were going to start the show. You're slander.

Like obviously if for the people listening to this podcast, there's a pretty good chance they're renters. They're about 30 renters are about 36% of households nationwide or renters head 36% of households nationwide. Although those numbers are a couple of years old. I don't know if it's that was like pre pandemic. Do you renter? Do you own Samantha?

I now officially own because we were kind of pushed out from the rental that I had because we went up by want to say 40% on our rent. Jesus Christ. Yeah. So you have been that's we're talking today about why the rent is so damn high and some of the people who are responsible, we're going to try to drill into specific people whenever possible because that's our bit, but I am also in my first year of home ownership. I've been a renter the first 15 years of my adult life.

And for me, I don't know about you. Most of the living situations I was in were like the broadly criminal, like a legal like the landlord was breaking a law and so my rent was cheaper. We actually like had to I've tell this story a couple of times. We had to like talk a city of Los Angeles inspector out of reporting fire hazards in our apartment because we were like, dude, I live a minute and a half away from Santa Monica and we're paying like a thousand bucks a month for a room each like you got it. You got to like, you got to just keep quiet.

We'll burn to death if we burn to death, right? We'll risk life or death for this situation because it's cheap because it's cheap. Yeah, it's just cheap, but nothing is cheap anymore. It has gotten rent has gotten higher at a ridiculous rate since the pandemic in particular. Not that it wasn't raising before, but it's really raised a lot. Say as you just said, you just were about to go up 40 percent year over year in Miami and Tampa rent is up about 50 percent of its pre pandemic numbers and nationwide. Median rent has topped $2,000 a month for the first time ever, which is insane.

When I was, you know, a kid 14, you know, 13, 14, 15 years ago, living in my first department, two grand a month is like, that's a rich person's rent. Yeah, like that's a crazy rich. But I remember going to like a friend's apartment in Manhattan that was 2,500 bucks a month and being like, what the fuck is wrong with you people? Right. I'd be seven hundred dollars a month for a three bedroom. Like, yes. Now, the fact that Median rent has topped $2,000 a month is heavily influenced by the poll of the big cities.

These are very skewed numbers that may not reflect most individual people's experience because of how big some of the big cities are and how high the rent is there. So San Francisco, Seattle, New York, Los Angeles, Miami, et cetera are the places that are skewing the numbers and the places where rent has surged the most. But rent is still up basically everywhere. It is currently increasing at the fastest rate since 1986. And one of the things that happened during the pandemic is we had all these people moving to cities that they thought would be a better place to live because it was remote work,

which helped spread out some of the increases. And there was a brief period of time where evictions were tamped down on somewhat by federal rental assistance. So even though rent was rising, it was hard to kick people out of their houses. But that has started to run out this year. And in 2022, eviction filings hit pre-pandemic levels and in many places exceeded them greatly. Does that have an impact? Does the impact of like what's called pandemic pricing on rent have an influence there?

Where like a lot of places they and especially in like big cities, such as Los Angeles and New York, they were trying to fill places. So they gave a lower price. And then the next year, the increase was offensively high. Yeah, that's one of the things that's happened from personal experience. It's it's one of the things that's contributed to evictions. Some cities, it's like like Houston, in particular, is one city I know where eviction rate filings are like 200 percent of pre-pandemic levels.

Like it's massively higher in a lot of cities. And this is all. Elena got hit a hard with that. And immediately as as soon as it dropped, the amount of evictions that came, it was absurd and obscene. Yeah. And in that, that's fed into the homelessness crisis. That's this huge political thing and also just like thing thing everywhere in the country right now.

And it's, you know, kind of difficult to grok in absolute numbers. How many houseless people are in encampments and other situations? Because those aren't easily recorded in federal and state statistics. But homelessness is surging in a number of American cities. And all of this is ancillary to the question. Why is the rent so damn high? Now, if you go to like, yeah, exactly. Why is there? I know we're about to go down to this.

There's going to be Black Hawk mentioning, Zillow mentioning, Airbnb mentioning. Are we going down these routes? We're going to be talking about some of these. We're going to be talking about a number of those. This is, I want to say right now, we're going to be, this isn't going to be a comprehensive list of all of the different things affecting rent prices. We're focusing on some particularly bastardy ones.

But we'll cover a lot of it. So please don't get on and be like, well, you didn't cover this or that. It's like, yeah, man, it's a big topic. Like, do you want us this to all be just one boring, broad overview of problems? You do want us to drill into some weird, fucked up assholes, which is what we're going to do. Yeah, I got time today, so let's go. Yeah. So if you go to, say, The New York Times

or most of other big legacy publications to try to like, you know, type into Google, why is the rent so damn high? You'll get various versions of the same answer. And I'm going to quote from a New York Times article here. The origins of the current homelessness crisis go back decades to policies that stopped the U.S. from building enough housing. Experts said seven million extremely low income renters cannot get affordable homes according to the National Low Income Housing Coalition.

Now, experts like these tend to place a lot of the blame on what we call nimbies, which stands for not in my backyard. And it references the fact that in cities like San Francisco, there's a lot of like upper class liberal types who make it very hard to build anything besides single family housing, because they don't like big buildings and they don't like being in a dense urban environment. Los Angeles County devotes 76 percent of its residential land to single family homes, which is bug fuck.

This leads to sprawling cities, which also require huge road systems, lots of parking, yada, yada, and it leads to higher rent prices because there's simply less space to build housing. The New York Times also notes, quote, home owners also often protest proposed housing, effectively blocking it. They fear that more housing, particularly for low income families, will change the makeup of their communities or reduce the values of their home. Now, in San Francisco, what David Chappelle did, supposedly,

I know that was like a small blue, but it was a misunderstanding. But he like blocked the housing like. Yeah. Right. Yeah. He said it was a misunderstanding. OK, I remember that coming out. George Lucas built a bunch of low income housing specifically to fuck with his neighbors. Oh, his rich neighbors.

He had had like noise complaint problems with his rich neighbors as a result of like the studio he ran. So to fuck with them, he built a bunch of low income housing in the neighborhood because he knew it would piss off the other rich people. That's so nice of him. Yeah, based to George Lucas. Dot, dot, dot. He's a he's a he's a perfect, unproblematic king.

So. Right. Yeah. And there's like they're not the New York Times and stuff. They're not wrong when they say that Nimbis are part of the problem in San Francisco. There were recently a bunch of protests to stop a project to convert one hundred and thirty one room hotel in Japan town into housing for homeless people. Like a bunch of shit like that happens.

California has about twenty three available affordable homes for every hundred extremely low income renters, which is makes it one of the worst of any state in terms of that problem. So they're not wrong when they say that like, yeah, the the Nimbis are a problem. People not allowing like multi family development in lots and stuff is a huge problem. And I've reluctantly come to see that like they have a point. I have I don't want to I don't like living in high density areas.

I would prefer to live out in the woods. But but this argument is broadly broadly correct. A huge part of the problem is that there's denser cities is that we need to have denser cities with more multifamily zoning in residential areas. However, there's also a lot of bullshit in the argument that the New York Times is making here and in this argument in general, because the way it tends to get pushed and it gets pushed by people like developers and by intellectuals who take on the attitude of developers

because the developers are their uncles or whatever is that all of the homelessness problem is to blame on these liberal city policies that just aren't letting developers develop enough. And and while, again, zoning is a part of the issue, this analysis excises a great deal of the actual problem. For one thing, the whole we're not building enough housing thing tends to lay all the blame on zoning and these darn nimbies. But one of the other problems is that like there's not actually people to build that housing. This is this is a major problem in the industry.

And I'm going to quote from a write up on NPR's website. By one estimate, the US is more than three million homes short of the demand from would be home buyers. Pandemic related supply chain problems aren't helping. They're adding tens of thousands of dollars in cost to the typical house. But the roots of the problem go back much further to the housing bubble collapse in 2008. What I call a bloodbath happened, says Klaus, who's a contractor. It was the worst housing market crash since the Great Depression. Many home builders went out of business.

Klaus was building houses in Florida when the bottom fell out. A lot of my tradespeople found other work. Winton got retrained for new jobs and law enforcement, all sorts of jobs. So the workplace force was somehow decimated. So more cops, less construction workers, nobody to build the fucking houses that they want to have built. Which is not a problem that you can lay on zoning or NIMBYs. That's because there was a fraudulent like banking industry that existed to sell people's subprime loans on houses

that were low quality, massive and built in terrible locations. And when that fell apart, suddenly all of these people had to find something else to do. And you can't blame that on the fucking NIMBYs in San Francisco. Right. I mean, there's all this conversation about funding as well as who is actually going to be able to afford it. Is it is it truly affordable in actuality? Which it often winds up not being because like we we have there's like loopholes a lot like in Portland right now, there's a building that's supposed to be affordable housing. But one of like the deals the city gets as they get or the gives the developers

that they can increase rent at a greater rate than other places could. Right. For a certain set amount of years, which like, yeah, it's all there's all these fucking ways that affordable housing winds up not being affordable that is not due to zoning or they just back out of this. So we had a whole project here called the Atlanta Belt Line, which is supposed to stretch around our metro area. And it was supposed to build up the city, have this walkable area, maybe get a rail station, I don't know, all these great things.

But they had to buy out a lot of the areas, which is predominantly urban. And therefore, you know, it wasn't it was red line was upon a time and now valuable because it's within the city. So they bought out these houses, pushing people out below. But the deal they had was they were going to put in affordable housing as well. They did not. They actually backed out of the deal so much. The originators who proposed this plan created this huge plan. That was going to be like a 30 year plan.

It's still ongoing, by the way, multi million dollars from the city. So many things that they stepped down and said they were no longer a part of this project because it went so ugly and that people had come back with. Sorry, just kidding. We're not giving you this property back. We're just going to make millions and millions and millions of dollars without any going back to the city or the people who we promised that we would help. It was bad. Shocking. Yeah. I mean, yeah, that's that sounds like the way it tends to go.

So, yeah, we have this fucking financial crash and home buying eventually slowly recovers after it, but building rates never do, right? They stay below normal after the crash. This continues for, like, you know, more than a decade because the workers simply aren't there to buy houses. So when millennials start to hit, which should have been their prime home buying years, not only are houses more expensive than they had been, but there's less houses being built.

And that's again, it's just not due to zoning. It's the result of the home building industry tanking because a bunch of people who should be in prison sold and bundled up subprime loans. And then those same people go to people in the New York Times pretending to be experts and say, no, we got to change the zoning so I can develop cities more. And it's frustrating that that's the only argument you tend to fucking here. Now, even then, even if you like.

Because again, the New York Times, the angle here is not entirely wrong. But it also leaves a lot out, even if you're just looking at their numbers, because the numbers we see that are like the U.S. is missing this many million homes, right? We're short three million homes or seven million homes. Or if not kind of fucky, which I would argue, then at least presented in a way that does not provide people with clarity as to what the numbers actually mean. When I say the U.S. is short three million homes,

which is something you'll hear on the New York Times a lot, that suggests that like, well, there's three million people who don't have, who can't get housing because of sheer lack of availability, right? Or at least, you know, X number of people, however many people fit into three million homes. And that's not really true. There's a lot of people who have started. Yeah. Where are these numbers coming from?

Where are these numbers? And I'm kind of confused. I'm like, who actually says, all right, I've gone and taken a statistics. And we figured out that, yes, this amount of people need this much many houses. But do we actually have a number? And how did it come up to that? Yes, we're about to get to that. I'm going to talk to it.

It does not work the way you would think it does, based on the way it tends to get summarized, right? But yeah, there's folks who will argue just in general that the problem is not the way it's often presented. Kevin Drum is a writer from other Jones. And I think kind of on the more libertarian end of things with a lefty tinge, his big claim to fame is that he helped solidify the idea that there's a connection between the drop in violent crime

and the removal of environmental lead, like getting lead out of gas. He's like the journalist who is big on that. And he points out that while construction never recovered after the 2008 crash, that's because the crash led to the bursting of a housing bubble. And since housing was indeed a bubble in that period, why would construction have returned to the rate that it was being added at when everyone lost their minds building trash houses as part of a shell game? What? Right?

Like maybe it's not it's not the problem isn't that housing construction didn't return to previous levels because those levels were insane and fundamentally based on irrationality. Quote, during the early aughts, housing supply grew far faster than population. After the bust household formation caught up by around 2013. And since then, housing supply has matched household growth and has exceeded population growth. So do we have a housing shortage?

Everyone keeps saying we do and the housing groupies keep yelling at me that my chart is meaningless. But why? It sure looks right to me. By the way, I was browsing through some OECD stats the other day looking for health care information. And I happened to run into their league rankings for housing. Guess how we compare? Based on indicators such as rooms per house, basic facilities and affordability,

they rank us as number one in the entire OECD group of rich countries for the year 2020. We must be doing something right and something wrong. According to the OECD, we rank second from last among housing affordability for low income tenants. So what he's saying is that like, well, the evidence that like we're short on housing is weaker than the evidence that prices in housing are being jacked up and inflated. It's like the there is inflate. It's like with the grocery store.

There is inflation that's affecting the price of your groceries. Those grocery stores are also making record profits because they have jacked up prices specifically to make more money with the cover of inflation. Yeah, drums work is quoted favorably by Brian Potter, who works in the wonky side of the construction industry and writes a popular sub-stack for weirdo construction nerds who want to know about things like why has wood gotten so expensive and why did agriculture mechanize and not construction? Those are the kind of things he writes about.

He's also a member of the Institute for Progress, which is a right wing libertarian shaded think tank who pushed the idea that a lot of social and political policies should be tested by having prominent people tweet shit. What I'm trying to say is that I'm not going to totally back this guy up, but he certainly knows more about construction than me. He has an angle, which is why I laid out what he writes for. But he does he does the best job I've seen of answering the question of like, what does a statistic like we're three million houses short really mean?

Quote, we'll start with some context. The U.S. has roughly 330 million people living in roughly 141 million homes or about 0.42 homes per person. This puts the U.S. slightly below the OECD average of homes per capita. One thing worth noting about this is that previous rates of home building in the U.S. were partly driven by falling average household size. But there's a limit to how much average household size can fall. You can only add so many new households to a given population size.

At the extreme end, you can't have more households than there are people. Average household size can't be less than one. And in a world where a children live with their parents until they're 18 and B, most people live with a romantic partner and C, the population isn't declining, is a world with a higher floor on how small the average household can get. What happens if this world changes to one where the average household size is two? In the final condition, you'll be building twice as many houses.

If you add four people to the population, you're now building two homes instead of one. But to get to that second world, you need to build 100 additional houses. Even if this process takes 50 years, that's an extra two houses per year on top of the ones you're already building, which will temporarily juice your building rate. But once you work through that backlog, your building rate will drop off. Turning back to the real world, in 1960, the US had a population of 180 million with an average household size of 3.33.

By 1980, average household size had dropped to 2.76. This means that between 1960 and 1980, over 550,000 homes per year were needed just to keep up with changes in household size. By contrast, from 2001 to 2021, average household size only went from 2.56 to 2.51. We thus can't infer much from the fact that US home building rates per capita are lower than they were in the past, because we would expect that to happen at some point soon regardless. Do you see what he's saying there?

Explain it to me, because I'm trying to keep up with all of these numbers. This is very wonky. I don't know any other way to say it. The gist of what he's saying is the average from the 60s to the 80s, household sizes on average got smaller, which means more people were living in more houses, so there were fewer people on average per house. The number of people per house, by comparison,

barely changed at all from 2001 to 2021. It would have been unreasonable for the housing rate to continue at the same rate it had been from the 60s to the 80s, because the household size was not decreasing by that much. The social changes that led to us having more smaller households had already happened, and so it would have been unnecessary housing to a large extent. Basically, you can't infer a housing shortage by looking at housing construction rates in isolation, which a lot of people do.

I think the point here is that there's a lot of money in convincing you that this problem is simple and that the only thing to do is deregulate. If we deregulate construction, if we deregulate zoning restrictions, that will solve the problem. Obviously, Potter, because he does conclude that zoning changes are one aspect of helping with the crisis that we're in right now, but the thing that he and Drum are both saying is that the people who are saying this is just about a lack of households or a lack of quote-unquote affordable households

aren't actually looking at the numbers as they really exist. They're taking these kind of broad summaries, and they're trying to torque the actual numbers to say something that they don't, in order to present a simpler picture. Specifically, it is a picture that reduces the problem and removes solutions like rent control and eviction moratoriums. That's what's going on here. There's a lot else.

One of the other major issues here is that, and this is something that Potter points out, when we're talking about missing housing, we're not talking about a lack of houses. You'll hear a lot of people say there's X number of empty houses in the United States, and that is true, but that's not necessarily vacant housing. Vacant housing is housing that is on the market and available for people to purchase. Right now, the US does have a historically low vacancy rate, so there are fewer houses, like per capita fewer houses available for people to rent than there have been in the past, even though there's plenty of actual empty houses,

because if those houses aren't available to be rented, they're not vacant. And a big reason why there's so much empty housing that is not technically vacant is Airbnb. Right. Yeah, so that is a major factor here. Wait for me. Yeah, and we're going to talk about that. But first, you know what's not Airbnb? I hope not.

Maybe. Super awkward. Any of our sponsors. Probably. Sophie, are we sponsored by Airbnb? Not that we would have approved or signed off on, but we don't have control of the random ads, so it's randomly in Airbnb ad. Yeah.

Look, if you hear, here's what I'll say. If you hear an Airbnb ad on the podcast, find your nearest Airbnb rental and Hakamalatof cocktail through the window. Whether or not there's people inside, it doesn't matter to us. Legally, this is a joke. Yep. I'm just going to send the background here. Yeah, it's fine.

It's fine. It's fine. Is that something on fire today? Yeah. I feel like that mean of everything's fine with the dog and the fire. That's my face right now. Everything's fine. That is your face right now.

You know what? I'm going to enjoy this moment. During the summer of 2020, some Americans suspected that the FBI had secretly infiltrated the racial justice demonstrations. And you know what? They were right. I'm Trevor Aronson, and I'm hosting a new podcast series, Alphabet Boys. As the FBI, sometimes you got to grab the little guy to go after the big guy. This season will take you inside an undercover investigation.

In the first season of Alphabet Boys, we're revealing how the FBI spied on protesters in Denver. At the center of this story is a raspy-voiced, cigar-smoking man who drives a silver hearse. And inside his hearse was like a lot of guns. He's a shark. And not in the good and bad ass way. He's a nasty shark. He was just waiting for me to set the date, the time, and then for sure he was trying to get it to heaven. Listen to Alphabet Boys on the iHeart Radio App, Apple Podcast, or wherever you get your podcasts.

I'm Lance Bass, and you may know me from a little band called NSYNC. What you may not know is that when I was 23, I traveled to Moscow to train to become the youngest person to go to space. And when I was there, as you can imagine, I heard some pretty wild stories. But there was this one that really stuck with me about a Soviet astronaut who found himself stuck in space with no country to bring him down. It's 1991, and that man, Sergei Krekalev, is floating in orbit when he gets a message that down on Earth, his beloved country, the Soviet Union, is falling apart. And now he's left defending the Union's last outpost. This is the crazy story of the 313 days he spent in space, 313 days that changed the world. Listen to The Last Soviet on the iHeart Radio App, Apple Podcast, or wherever you get your podcasts.

What if I told you that much of the forensic science you see on shows like CSI isn't based on actual science? The problem with forensic science in the criminal legal system today is that it's an awful lot of forensic and not an awful lot of science. And the wrongly convicted pay a horrific price. Two death sentences and a life without parole. My youngest, I was incarcerated two days after her first birthday. I'm Molly Herman. Join me as we put forensic science on trial to discover what happens when a match isn't a match and when there's no science in CSI. How many people have to be wrongly convicted before they realize that this stuff's all bogus? It's all made up. Listen to CSI on trial on the iHeart Radio App, Apple Podcast, or wherever you get your podcasts.

Oh, gosh. What a great day to be an American. Said no one ever. Well, I don't know. I did when I watched those Philly fans sliding down those greased up light poles. Every time I see Philadelphia celebrate anything, I'm proud to be an American. I was proud of the New Yorkers at the Yankees Astros game that heckled Ted Cruz. Have you ever seen that video? Proud of that, too.

And I'm proud of Forbes for reporting on how bad Airbnb's are for housing vacancy rates. And I'm going to quote from them now. Research conducted by the Harvard Business Review across the U.S. found that Airbnb is having a detrimental impact on the housing stock, as it encourages landlords to move their properties out from the long-term rental and for sale markets into the short-term rental market. A separate U.S. study found that a 1% increase in Airbnb listings leads to a.018 increase in rents and a.026 increase in house prices. It may not seem like much on the surface, but there's a cost creep for those looking to rent long-term or buy.

So it's just, again, I'm not saying the times is wrong when they say that nimbies are part of the problem we have here, but be cautious whenever somebody talks about the housing shortage issue and just throws that out there or just frames it as a housing shortage issue, right, rather than a cost or creeping up because a bunch of different kinds of capitalists are finding new ways to fuck people, which is the thing that's actually happening. Yeah. Another thing that's happening is that the rent surge and the way it looks and stuff, and the fact that the rent surge is being attributed to a lack of housing construction and whatnot and zoning issues,

that's heavily skewed by outlier cities by San Francisco. In other words, rent is increasing everywhere, right? Everyone in every city is dealing with rent prices that are surging, rent prices that are surging in San Francisco and a couple of other big cities because of zoning issues, but rent prices in Atlanta or in Houston are not necessarily surging because of those issues. But because of how big like San Francisco and New York are and how much they're outliers and they fucked the data up, and so the picture they present in large is not accurate to why is most people's rent raising, right? Does that make sense?

Yeah. And I'm going to quote again from Potter's analysis here. There is essentially zero correlation. The metros with the largest rent increases had added population and added housing ratios, no different than metros with smaller rent increases. For example, for instance, between 2001 and 2019, the San Francisco Bay Area added around 336,000 people, but only built 94,000 new housing units. This gives an added population, added housing ratio of about 3.54,

much higher than both the national and regional average household size. This seems like it would indicate many more households than homes got added, which we'd expect to push prices up. And indeed, San Francisco saw a rent increase of over 53% during this period, one of the highest in the country. The problem? The Atlanta metro area saw almost the same added population over added housing ratio, but it had a much lower rent increase. Atlanta added 653,000 people over the same time period and only built 186,000 homes

for an added population, added housing ratio of 3.51, and Miami added almost 500,000 people, but only 98,000 homes for an added population housing ratio of over 5, but Atlanta and Miami saw rent increases of just 22% and 17% respectively. So again, it's just not as simple as that number alone. And I don't know, I'm probably harping on this too much. So we're going to get out of the number shit now. I apologize. I just wanted to make the point that the people who just say this is all about zoning, this is all about housing construction are trying to fuck you, right?

Right. Like they are trying to enable others to fuck you and you should not take them at their word. This is the classic trick in trying to blame someone else so that the people who are actually profiting and making the most money look innocent, kind of like the whole recycling bit. We know, we know, like they're trying to blame the individual instead of realizing these huge corporations are fucking over the environment, but they don't want to talk about it because they don't want to lose money. So this is how we're going to rescope this. Yeah, we're going to, we're going to scope this as like there's too much regulation on like,

yeah, but you guys are also jacking the prices up, right? You're also like, you're also like colluding to fuck people over by, yeah. Anyway, and you're doing shit like Airbnb, like you've done a, but capitalists have found a bunch of different ways to fuck with housing in the last 15 years. Right. And it's not just a construction issue or a zoning issue. They're basically saying that rent's high because of the lack of quantity of places available, but like, it's really not the case.

No, otherwise it would be raising its similar rates in these other cities where the numbers are even worse. I didn't understand the math. That's awesome. I love that. Yeah, yeah, yeah, yeah. So good. Anyway, you can, whatever. Um, I, like, fuck these people.

Rent is high. Rent is, oh, you wrote that in your script. Rent is too damn high. Rent is too damn high. Yeah. And there's a number of reasons for it and anyone trying to say it's this one simple thing that is also really good for developers is probably trying to fuck you. So now we're going to start talking about assholes, which is fun.

Let's go. Oh, I'm stoked. And more, more are strong suit than numbers. So the first thing you need to know about, or the first person you need to know about is a guy named Jeffrey Roper. Jeffrey is a businessman who describes himself as a numbers nerd and formerly worked as Alaska Airlines's director of revenue management in the 1980s. Anybody, anybody who says they're a numbers guy to you? Yeah, just like them immediately. I don't know.

I like my accountant, my guy who does my taxes. But if somebody, like, if that's their first thing that they want you to know about them, red flag. Red flag. A couple of red flags. Do not date that person, okay? Also, having the last name Roper, that makes me think of the guy who used to be Ebert's friend and probably killed him. That's my headcanon. If they mention anything about, like, their credits, I'm just saying, they mention anything about their credit score.

If they mention anything about numbers, if they mention anything like that in their dating profile, do not match with them. Wait, have you had someone put their credit score? Oh my gosh. More when I was living in Los Angeles. Okay. Yeah, that was a thing. Maybe Atlantis are not impressive, so therefore they leave it out on purpose. I don't know, because I did not see that.

That's a new one to me. All right. Robert, tell us about the numbers guy. Roper. Numbers nerd. R-Money is what we're calling him, actually. R-Money. Okay, tell us about R-Money.

Yeah, yeah. So he's a numbers nerd. He used to work as Alaska Airlines director of revenue management in the 1980s. And look, Alaska is like the least shitty domestic airline that we have. Great, great. A great, great airline. But when Roper was there. I haven't seen them being jagging people off the plane so.

Wait a minute. Yeah, they don't do that now. I will say this. They absolutely, while Roper was director of revenue management, robbed us all of about a billion dollars back in the 1980s. So we're going to talk about how that happens. Like robbed us consumers, like stole illegally, criminally stole a billion dollars. Okay.

It's cool. Okay. We're not the only actually a number of airlines stole collectively a billion, but Alaska was kind of leading the pack. Anyway, competing airlines, what happened is competing airlines started using price setting software. And their different computers would all kind of share data on planned routes and prices with each other to make sure that like nobody was undercutting anyone else.

And Jeffrey was a big part of this. He brings in price setting software to Alaska and he helps set up this system, which they're very happy with because it helps avoid a price war in the 1980s. And when you frame it as a price war, it sounds like, oh, they avoided a price war with this software. That's good. No, it's not. What a price war is, is companies competing to give you the best price so that you will

choose their service, right? It's good for consumers when a price war occurs. When you avoid a price war, it means you're getting fucked. Right. Price war amongst each other so they can not have to compete for businesses unless they're in like, I'm guessing they're doing like the price is right type of where there's just a dollar less. Well, that normally what would happen is you would not, it would kind of be a little bit

of a black box and they would set their rates just based on this is what we think is fair. And then kind of over time as they see what consumers are choosing, you know, then like, maybe we need to lower our rates or maybe we can raise them a little. What they're doing with these softwares is they're all communicating with each other to be like, this is what we are charging, oh, we can all afford to charge more. So the prices just start raising and just start raising and just start raising, right? Price wars occur when corporations fight to lower prices while still staying profitable. This is good broadly speaking for consumers.

If capitalism worked the way my high school textbook said it did, then this would be an example of why it's a good system, right? But that's not what happens. What really happens is that companies like these airlines do things called, do so what's called price fixing, which is illegal. Alaska under, well, you know, the system that Roper helps set up is illegal price fixing. The Department of Justice says these companies are all illegally fixing prices. I'm not like declaring this price fixing because I don't like it.

The Department of Justice says they did a crime. Did anybody actually get absolutely not well a little bit. So the DOJ accuses Alaska and several other airlines of artificially inflating prices using the system, which costs taxpayers about a billion dollars between 1988 and 1992. The government gets settlements and consent decrees out of eight airlines, including Alaska, which is like, again, when you're a big company and you have lawyers, nobody goes to prison for this shit. Sometimes you kick the government some money.

Yeah, exactly. Now, during this investigation, federal agents remove a computer and documents from Roper's office because again, he's kind of one of the ring leaders of this. He will later claim it in an interview, quote, we all got called up before the Department of Justice in the early 1980s because we were colluding. We had no idea. Of course. Of course.

Yeah. Sure, buddy. Yes, I'm certain you had no idea. I didn't know what that was. Oh my God, we were price fixing. I didn't know all our price fixing was price fixing. I didn't know how we got all that money. It was hard.

Yeah. It seemed like we were just making a lot of money. We were just so good. It's very funny that he says that. He gets really punished again, whatever settlements they make are kind of slap on the wristy. After this, Roper leaves the United States for central in Eastern Europe to fuck with people's lives and post-Soviet Europe. He's helping.

He's one of these capitalists who goes over there because he's like, oh, there's a lot of money to be made in setting the stage for Vladimir Putin's rise to power by fucking with all these newly privatized industries and siphoning money and access to future money away from any kind of regular people or social safety net that might be built, which will create ideal grounds for authoritarianism. Anyway, it's whatever. It's good stuff. He made money.

Don't worry about it. He makes a lot of money doing this. Then he gets back to the US and he's like, you know what I realize? The US apartment rental industry is stuck in the past. It looks like these emerging markets over in Europe. It's old fashioned. It's too slow. The thing that he finds that really disgusts him is that apartment managers are, quote,

basically pricing their product on a paper napkin, which he seems to have found viscerally offensive. Now, what's going on here is that to some extent, renting is more of a human business back then. People are coming in and sitting down and their landlord saying, well, this is what it is. There's haggling and stuff and back and forth. If you've ever haggled with a small landlord or gotten one to give you a break because

like shit got fucked up in your life, you know what I'm talking about, right? You can say what you will about how inherently predatory, you know, landlording is or isn't or whatever. But at the end of the day, it's better when you can be a human being sitting across the table from another human being because sometimes that matters, right? Sometimes. Sometimes. Small landlords can be shitty and terrible too.

As a general rule, every time I had to lease from a huge company, I found the monolithic slow to respond to problems and cruel in their application of things like fees and penalties where I was able to like talk shit out of little landlords and, you know, not that I never had a small landlord fucking steal shit from me, but if I prefer one situation to the other, right? I think out of the 20, 20 years that I rented, one was a big corporation and I hated it. It fucking sucks. I want to at least be able to call my goddamn landlord on the phone and get a person and

deal with a problem, you know? Well, I also had the age-old problem where the guy who came to fix things, the maintenance man was hitting on me, so I had a fear that he was going to just come into my house. So, yeah, I know. There was that. I had the handyman in my last one. Didn't hit on me. No, no, no.

He would come in and lecture me about life choices and tell me about, you know, he was just really misogynistic. It was worse. Totally opposite experience. I think that would be worse. I think it's equally bad. I had a gloriously opposite experience and so when I was renting a slum, it was legally zoned servants quarters.

It was one room. I lived in it with two other men falling apart. The ceiling collapsed on me while I was showering and the next day I called the landlord and I'm like, hey, the ceiling fell in on me while I was showering. You waited the next day? Well, it was like night time. I tend to show like, it was like nine. It was like ten at night, something like that.

Immediately. I don't remember if I called, maybe I called immediately and he wasn't around. Anyway, I get in touch with him and he's like, I'll get my guy right over. So he sends over a repairman and he's just kind of this like old hippie looking dude and he comes over and he looks up at the hole and he's like, yeah, we're not going to be able to fix this for a while. And then he says, do you want to buy some weed? And I said, yes.

And he was selling $50 ounces of pretty solid popcorn. That's like mids. It was good. Well, it was worth it. It was like several months where we didn't have a ceiling over the shower, but good weed. It was a pretty good weed hookup. We were poor as shit. So a $50 ounce of mids, that's not a bad deal.

You know, well, it must be wonderful to have you don't get that experience with a big corporate landlord. That's the kind of landlord you get when your landlord is yeah, breaking a number of different laws, but basically chill. Yeah. Look, again, this is, yeah, again, you can have whatever Marxist opinions you want to have on landlords. I'm talking about like from a human being perspective, it's always better to deal with

a person than a giant edifice. So whatever, Jeffrey Roper's entire business attitude revolves around making that kind of thing where like if you're living on the margins, you can kind of skate by because you're able to like talk to someone on a human level. He wants to make that impossible, right? Of course. Because that is a barrier to profits. No compassion, empathy allowed.

Exactly. You have predicted where we're going here. So in 2004, he gets hired by a company called Real Page as its principal scientist. They bought software from Camden Property Trust, which is a large owner of apartment buildings that was supposed to help them maximize profits. Now previously, back in the napkin days, we'll call them, even big corporate apartment managers had kind of been left to guess. Even if you were working with a big corporation, it was still kind of like eventually some

guy's going to sit down and just kind of guess what he thinks he can get out of you, right? Roper knew that he could do better just as he'd done at Alaska by introducing machines and price fixing to the legally not price fixing yet, although it might prove to be price fixing in the future. We'll see what the DOJ says. But legally he has not committed price fixing in the rental industry to an extent that has been proven. I'm going to quote from a pro-publica investigation.

Roper quickly realized he required data, a lot of data, to get the algorithm working properly. He began building a master data warehouse that pulled in client data from other Real Page applications, such as those for leasing managers. A proof-of-concept version of the software had performed well in tests at townhouses. Camden offered for rent in its home city of Houston. At the time, the street behind Camden's townhouses was shut down while a grocery store was being built. The staff wanted to discount rent for the townhouses because of the nuisance, said Kip

Zacharias, who worked with Camden as a consultant. Instead, Yieldstar, which is the company that's selling the software, suggested boosting rents. We were like guys, just try it, Zacharias said. The units ended up renting for significantly more than staff had expected. He said, that was kind of the Eureka moment. If you'd listened to your gut, you would have lowered your price. Such 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. This is one of the reasons why we wanted to get pricing off-site. Unimpeded by human worries, Yieldstar's price increases sometimes yet led to more tenants leaving. So, he's literally is saying what you were saying. There's too much empathy in the process as it exists. We gotta get rid of that shit so we can really fuck people. Right, right.

We need to get rid of the human aspect. I like that part too. That's like, don't be human. If you're a small landlord or if you're just a person at a leasing office with discretion and a person comes in and they're like, you know, they remind you of your mom or you're on to your cousin or your friend or like, you know, you have a good rapport with them. They're like, yeah, I want to make sure you get a good deal like I'll work again. I've had that happen to me.

It's like this is and the system, by the way, that system, the one I'm describing was not idyllic. It was still bad. Rit was still too high, but this has made it much worse. Right. So he's the one that began like, no, really, every year you should increase by 15 percent and they'll never question it. We just do it to every single person uniformly.

And then, you know, nobody's, it's not personal. This is just the price of housing now and this is just the way that it works. And, you know, we're just trying to, we found that you're underneath the, and this is what it means also when like you get that letter saying, you know, your house is under priced or lower than like market value or whatever. So we have to increase it by X amount. That's what they are. What they're quoting on is the shit that this software hands them, which is not necessarily

a real thing. It is made a prediction by this machine. It is a thing that the machine calculated by doing the machine version of price fixing that again, as of yet has not been ruled to be price fixing by the DOJ, but may prove to be ruled price fixing by the DOJ in the near future. We'll see real soon. Okay. Okay.

Camden noted their turnover was about 15 percent higher in 2006 after it started using yield star, which is again, that's the software that Roper is managing. Despite this revenue grew by 7.4 percent. So 15 percent of their clients like leave the apartments that they're in or 50 percent more of the clients leave their apartments that year, like don't renew their leases, but revenue still grows. And that all sounds fine when you treat it like numbers, right? That like, oh, we had more turnover than number, but revenue still grew.

But that 15 percent of tenants who turned over includes people who got evicted because they couldn't pay their rent and people who had to leave a neighborhood or even a city they loved because they'd been priced out. And it also, the added rent that these people paid, the reason why profits were still up, means money those tenants aren't spending elsewhere, money they're not saving for a house themselves or contributing to the local economy, rather than pumping more cash into a massive corporation whose shareholders all live far away from the communities where this decision is impacted. Right.

Yep. So the CEO of Camden Property Trust is one of the people who doesn't see things this way. He summarized the impact of yield star like this, the net effect of driving revenue and pushing people out was $10 million in income. I think that shows that keeping the heads and beds above all else is not always the best strategy. Wait, what?

Yeah, man. We put some people on the street, but we made $10 million. Fuck them people. It's funny. So ProPublica does this big investigation and they're the ones who bust this story. They find this quote from Campo where he's like, heads and beds, fuck it. And they're like, hey, this kind of makes you sound like a monster. Kind of?

I think I'm just gonna get the kind of. Yeah. I'm gonna quote from their article. Campo told ProPublica it sounds awful and doesn't reflect how he or Camden views renters today. We fundamentally believe our customers are the most important part of the business, he said. We're not about pushing people out.

Of course you think customers are important, they're the ones you're jacking money from. Like customers are important to Camden. The way somebody with a nice watch is important to a man with a handgun and a fucking desire to get a fix by robbing him at gunpoint. Like yeah, that guy is important to him. The liquor store I might rob later tonight is important to me. This is that same level of like child training kid children to work and then you're like yeah.

This is not what you think it is and their excuse of like, no, but if the children didn't work for low wages, their family wouldn't have any money, so they're doing a good thing. We're doing a good thing. We're helping them out. All good. All good. Yeah. It's it's it's ghoul logic and it's I also I don't want to I don't want to be unfair

here and compare a guy like Rick Campo to somebody who robs people at gunpoint or holds up liquor stores because that individual robbing people at gunpoint or holding up liquor stores. That's honest work, right? You know. There you go. Yeah. Yeah. Yeah.

To the person who is desperate and trying to get anything. Yes. All right. I got you now. I'll take that flip. Yeah. I'll take that flip. And again, that's a human interaction as a general.

You can probably talk your way out of the worst part of the interaction. There's more compassion there. Yeah. It's not an algorithm deciding whether or not you get stuck up, you know, there. Because, you know, it's not heads and beds. Yeah. Exactly. Speaking of heads and beds, we sell a lot of mattresses on this podcast.

We do, but I have yet to get one. Yeah. Yeah. They don't give it a lot like they used to. That's what I'll say. Yeah. It sounds so bougie. Let's get to it.

Yeah. Heads. During the summer of 2020, some Americans suspected that the FBI had secretly infiltrated the racial justice demonstrations. And you know what? They were right. I'm Trevor Aronson, and I'm hosting a new podcast series, Alphabet Boys. As the FBI sometimes, you got to grab the little guy to go after the big guy.

Each season will take you inside an undercover investigation. In the first season of Alphabet Boys, we're revealing how the FBI spied on protesters in Denver. At the center of this story is a raspy-voiced, cigar-smoking man who drives a silver hearse. And inside his hearse were like a lot of guns. He's a shark, and not in the good and bad ass way. He's a nasty shark. He was just waiting for me to set the date, the time, and then for sure he was trying to get it to heaven. Listen to Alphabet Boys on the iHeart radio app, Apple Podcast, or wherever you get your podcasts.

I'm Lance Bass, and you may know me from a little band called NSYNC. What you may not know is that when I was 23, I traveled to Moscow to train to become the youngest person to go to space. And when I was there, as you can imagine, I heard some pretty wild stories. But there was this one that really stuck with me. About a Soviet astronaut who found himself stuck in space with no country to bring him down. It's 1991, and that man, Sergei Krekalev, is floating in orbit when he gets a message that down on Earth, his beloved country, the Soviet Union, is falling apart. And now he's left defending the Union's last outpost.

This is the crazy story of the 313 days he spent in space. 313 days that changed the world. Listen to The Last Soviet on the iHeart radio app, Apple Podcast, or wherever you get your podcasts. What if I told you that much of the forensic science you see on shows like CSI isn't based on actual science? The problem with forensic science in the criminal legal system today is that it's an awful lot of forensic and not an awful lot of science. And the wrongly convicted pay a horrific price. Two death sentences in a life without parole. My youngest, I was incarcerated two days after her first birthday.

I'm Molly Herman. Join me as we put forensic science on trial to discover what happens when a match isn't a match and when there's no science in CSI. How many people have to be wrongly convicted before they realize that this stuff's all bogus. It's all made up. Listen to CSI on trial on the iHeart radio app, Apple Podcast, or wherever you get your podcasts. We're back! Ah, good times. So, Campo, Rick Campo, by the way, asshole name, that's a jerk ass, right? You can tell, fucking Rick Campo. No, Rick, your job is selling time shares in Florida to elderly people with dementia who don't know where they are. I mean, he's so racist radio personality that just screams at people and then tries to pretend like he's not a racist asshole. Yeah, Rick Campo, the guy whose job is to get up at 6 a.m. and say the n-word before playing a fucking Blink-182 song.

So, obviously, he says that they're not about pushing people out, but that is objectively what the software did. And it began to take off like wildfire in the real estate industry, which led to articles about it like this in the Landlord-focused news website. Yield Pro. Yields is the profits you jack out of people for housing, which they will die without. So, here's them writing about this positively. Equity Residential, which completed installation of LRO. So, LRO is the other kind of software. There's Yield Star and there's LRO. And they both do the same. They're both competing at this point, competing software. We're talking about both of them. Equity Residential, which completed installation of LRO across its 165,716 unit portfolio in Q4, 2006, found it extremely useful through the turning point in the apartment market.

We've raised rents hundreds of dollars in some markets, and I don't think people on site, given the way we'd trained them to think about pricing, would have had the courage to push it as aggressively as this program has. CEO David Neithercutt told panelists during a Deutsche Bank conference in January, Keith Odin, Camden Property Trust President and COO, agreed. It's not in their DNA to raise pricing $150 to $200 per unit on a lease turn, he said. Camden completed rollout of Yield Star across its 64,384 unit portfolio in Q4, 2005. Both Camden and Equity so far report 1-2% lifts to net operating income that they attribute to the use of Yield Star and LRO, respectively. And again, this is the very start of it, because these algorithms, the way they work like any other algorithm,

they get more effective at the thing they do, the more often they do it, the more data they get, right? So that's, again, they get better at raising rent by more the longer they're doing it. And the more they, I'm guessing, the more they are raising the prices as it gets higher and higher, they're going to use that as a factor. Because it raises all of the average prices everywhere else, right? Because again, they're price fixing, but not legally, so don't sue us. Oh yeah, I just wanted you to say everything that you named the corporations individuals are all the bad guys in history of the world right now. So I'm like, oh, this is bad. Yeah, these are bad guys. Yes.

So if you are currently in an apartment complex and you've seen your rent rise by a surprising amount, you might want to look into whether or not your landlord uses LRO or Yield Star. And while many companies don't use these programs, the fact that they're in use in major markets increases pricing for everybody. As one real estate executive told Yield Pro in 2007, a rising tide lifts all boats. The way Jeffrey Roper sees it, landlords who don't jack their prices up are ripping off all the other landlords. Quote, if you have idiots undervaluing, it costs the whole system. Which is the same logic that led to the price fixing your bubble with the airlines, right? My face is turning red.

My face is turning red. It's this dark void of mine. My face is turning red. This is why you don't touch anybody who says they're a numbers nerd. No, and it's one of those things. If this guy's logic is being, I don't know, if he works for a company that makes premium bourbon, right? And he's applying this logic to get the most profits out of people who want to buy nice bourbon, whatever, right? It's discretionary. People die if they don't have housing.

Safe housing. Can we put that as the marker? Because a lot of these houses that are for rent, who are with the more personable, are probably not in a safe area. Yes, they're fire hazards like half of the houses I lived in when I was a renter. Exactly. There's so many things that could happen. And you're like, you literally are giving up safety for the price. Once again, as you had said, you're like, you know, I'm living in a place that doesn't have a ceiling. I live in a nice neighborhood for fucking nothing, you know, or not then. That was not a particularly nice neighborhood.

Not later on. We dude, not the We Connect. It was OK. So the way Jeffrey Roper sees it. Yeah. So anyway, initially Roper's competition in this horrible business was LRO or lease rent options, right? I quoted about them earlier. But Yieldstar purchased LRO in 2017 with the Justice Department's acquiescence. They were flagged for high level review, but ultimately passed. Surprise.

ProPublica writes, the approval allowed RealPage to acquire its only significant competitor. Roper said, adding, I was surprised the DOJ let that go through. So 2017. Is that what you said? Yeah, 2017. Really? Were you really surprised? Yeah. I feel like those like organizations bought that long time ago.

I mean, that ability. That should tell you what a fucking scam this is, right? That like even he's being really, yeah, man, I can't believe they didn't call that price fixing. I can't believe they said that wasn't monopolistic behavior. We did it. It's fucked up what we did. So RealPage was pricing one and a half million units and the acquisition of LRO would double that. Steve Wynn, RealPage's CEO at the point at that point said in a 2017 investor conference,

I don't think there's any concentration, enough concentration of buying or pricing power here to warrant the DOJ stepping in. Yeah. So that's cool. And yeah, they made a lot of money. RealPage's influence that year, like the firm's target market was multifamily buildings with five or more units. Made up 19 million of the nation's 45 million rental units. And a huge share of those buildings were owned by firms backed by Wall Street investors who were the first adopters of this pricing software, right? He is specifically going to jack up the pricing of like housing for families that is tradition, like should have been more affordable, right?

Like he's actually directly, this business directly is targeting and jacking up the prices of what we call affordable housing. Again, not all is owning issue. So RealPage renamed its combined pricing software AI revenue management. And by the end of 2020, the firm was reporting in an SEC commission filing that its clients used its services and products to manage 19.7 million rental units of all types, including single family homes. The private equity firm Toma Bravo brought the company public a few months later for $10.2 billion. And again, it's all, that's enough to affect everyone, right? 20 million housing units. That's enough to raise everybody's rent price. And by God, it has. Can you name Camden? So are you talking about the Camden apartment complexes that are everywhere?

Yes, yes. Okay, okay. They're the guys who brought this monster software into the world. That's what I'm talking about. I hear the people fucking listening. They probably live in a Camden building right there. Burn it down, y'all. Yeah, burn. Just get it.

Burn it down. Burn it down. Sorry, Sophie. Yeah. Add to this. It's it. Yeah, it's cool. So cool.

Cool. The good, the good stuff is that, I don't know. Basically, the attitude these companies were able to realize because of this software is that previously, even though they'd all always wanted to get as much money as they could. The number one priority was keeping occupancy full, right? So we'll make deals with people. We'll cut prices if we can get another person, another unit, right? Because the worst thing is an empty unit, right? An empty unit is just a total waste of money.

This software in Roper comes in in Roper's attitude is, no, it's not. Empty units are fine as long as we're jacking up the prices of other units more. If we have to keep more units empty as long as we're getting more total money out of the built, the complex, that's all that fucking matters. And what this actually means in reality is that people are winding up on the street or they're being forced to move or forced to double and triple up somewhere else just to survive. And profits still raise for the company because everyone who gets to stay in housing is just getting built for more money. In one analysis ProPublica did, if a building owned by a company that used Yieldstar next door to a building that didn't, rent for the Yieldstar building rose 42% since 2012, as opposed to 33%. So like these are substantial increases. And you got to also admit or note that like the average in that like the gap between Yieldstar and non-Yieldstar buildings is higher because the average rental price is also being affected by the fucking Yieldstar price, right?

Like it's not just that Yieldstar buildings are higher than non. It's that they're raising rental prices for everybody because the whole market is surging. And because that's the conversation is that, yeah, these like, well, I say this, this all inclusive maintenance apartment complexes, they have their steady prices with no negotiations. But even though they're significantly higher, whatever you are paying with these mom and pop landlords is still going to increase because no matter what, even if it was like, let's say it's cheap $800, going $1,200 is still significantly cheaper than the $1,800 apartment that's gone in. So it sounds cheaper, which is what's happened everywhere. Yeah. Because the apartment that I left literally is cheaper than everywhere in Atlanta, but it still went up 40%. Exactly.

So everything's good. Is it? Yeah. That's not the definition of good, Robert. Things are fine. Everything's fine. It should always be acceptable to turn pricing for things that people die without into a fucking algorithm game, just like everything else that's terrible in our society. Nothing should matter more.

I love making people die and risk their safety for white men to continue to get rich. That's amazing. I love that. That's my favorite thing to do. You know, it's not just white men. You have to assume they're not all white, you know? So that's fine. That's true.

That's true. Yeah. So anyway, we're going to talk about an even more entertaining piece of shit next episode. And we're going to talk about some other important stuff, including what you might call it, rent control. But yeah, those are, oh yeah, yeah, in some places, although yeah, there's some fuckery going on there too. But yeah, these are some of the assholes who have made rent be so damn high. And also the assholes. It's always a pleasure.

The assholes who, because the assholes in this, you know, Roper is the one we're really digging into in this episode. But other assholes are just like all of the journalists who blithely report like, well, experts say there's just not enough housing and we have to change zoning. It's like, no, no, no. Not that that's not part of the issue, but don't pretend that's everything that's going on. That's the only issue. You fucking dishonest pricks. I'm going to have to go run or something. What do I do?

Yeah. I don't know. Go rent a house. Everybody go out and sign a lease. I quit. Yeah. Yeah. Samantha, do you have anything you want to you want to plug?

Oh, sure. Let me gather my thoughts. Yes, you can come find me at my podcast with Annie Stuff Mom Never Told You. If you like to talk about feminist issues where you want to rage about how the US hate women. A lot of people hate women apparently in general and those who identify as female. They think they do, essentially, or any issues dealing with those who identify as female. Come on over. Listen to us.

Yeah. Also, you can find me on Instagram, McVay.sam or on Twitter. I believe McVay. Samantha. Yeah. You can see pictures of my dog. Well, go with Christ, my children. And we'll be back for part two on Thursday.

Oh, yeah. Well, maybe. And then watch us out. Okay, bye. Bye. Okay, bye. Behind the Bastards is a production of Cool Zone Media. For more from Cool Zone Media, visit our website, coolzonemedia.com.

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