Sen. Elizabeth Warren is the Harold Daggett of Massachusetts housing.
You remember Daggett, the high-flying head of the International Longshoreman’s Association who pulls down $900k a year as he threatens to “cripple” the U.S. economy?
When he’s not (literally) driving his Bentley or sailing his 76-foot yacht, he’s pontificating on the evils of technology. In particular, E-Z Pass.
“All those union jobs are gone, and it’s all EZ-Pass,” Daggett complained in a recent interview. “Everybody got an EZ- Pass on the window, and they go through like it’s nothing.”
“Someone has to get into Congress and say, ‘Whoa. Time out. Machines gotta stop.’”
If you’d like to return to sitting in traffic waiting for change at a Mass Pike tollbooth, Liz Warren and Co. have got a deal for you.
Like the doleful Daggett, Warren, Sen. Ed Markey, and Rep. Seth Moulton want to “stop the machines” landlords use to set the smartest price — also known as “dynamic pricing” — for rental units. They have written 13 property management companies with residential properties in the Bay State demanding to know if they’re using RealPage software to help them set prices.
RealPage uses data and algorithms to help owners find the best price to offer for their properties. Given that Boston is ranked among the most difficult cities for prospective Gen Z home shoppers to buy a property, demand for rentals continues to rise. Across Massachusetts, home sales have reached the lowest levels since 2008.
Not surprisingly, AI and algorithms used in nearly every sector of the economy have made their way to the housing market. Many renters and homebuyers are taking advantage of AI-powered virtual tours while also benefiting from manual paperwork process automation, more efficient and accurate data analysis, and granular inventory searches.
In other words, shoppers are using more information to get a better rental deal. In turn, rental companies are using this data to help find the ideal price.
Liz Warren hates it. And she’s not alone. The Justice Department has filed a lawsuit that also demonizes market value calculated by algorithm.
This is upside down.
Analytics programs present new possibilities for producers to set the right product prices. Data-driven pricing systems help property owners and would-be renters track demand, pricing, inventory and more, enabling all players in the rental game to capitalize on opportunities. Zillow, for example, alerts potential homebuyers in real-time of property price cuts.
Progressives like Warren and Markey are right that there’s a housing shortage in the Bay State and beyond. According to Zillow, the housing shortage has grown to 4.5 million homes. Adding insult to injury, prices across the board are now up nearly 20 percent since President Biden took office.
However, the reason isn’t evil AI or the courage of data analytics. It’s a lack of supply, made worse by NIMBY zoning policies backed by affluent progressives. (Hello, Milton, Mass.?)
Economics 101 should point America in the direction of building more homes, both single-family and multifamily. But that’s not where the focus of lawmakers like Liz Warren has been. They see a problem and then look for an evil “big business” to blame for it.
Once again, she’s wrong. Around 7 percent of rentals in the United States are managed using RealPage’s price recommendation software. What’s more, the rents that RealPage calculates based on actual market data are mere recommendations that customers accept less than half the time, according to the company.
Liz Warren and her soulmate Harold Daggett would undoubtedly like to see would-be renters and landlords bent over the want ads with a pencil in hand, guessing prices, circling leads, and calling each other on their rotary phones.
Rather than blaming rising housing costs on platforms that do math using rental market data, how about rolling back regulations and setting the private sector free to build more housing?
Because more freedom means less thuggery. And “Dock Worker” Warren isn’t interested in that.
Michael Graham is Managing Editor at InsideSources.
Reprinted with permission from DC Journal – By Michael Graham
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.