Any sort of formal decision-making process is an algorithm. Are landlords supposed to just have a hunch about what the rent ought to be? Or would it be like a “no calculators” test in school, where you’re still allowed to do the same thing but with pencil and paper?
The benefit to not having an algorithm is that landlords have to compete against each other and guess what the market considers a reasonable price for their offerings.
If you had an algorithm that factored in square footage, bedrooms, bathrooms, distance to schools, distance to transit, etc. and everybody followed it strictly, you would have a cartel of landlords and no competition among each other. At that point, what stops them from collectively agreeing to raise the price by 5% each year? It’s not like housing supply will ever exceed demand, and consumers can’t exactly boycott shelter.
You’re correct in theory. However, in practice it’s likely to end up the same way publishing CEO salaries ended up leading to a constant rise in CEO salaries, rather than curtailing them, as intended.
Any sort of formal decision-making process is an algorithm. Are landlords supposed to just have a hunch about what the rent ought to be? Or would it be like a “no calculators” test in school, where you’re still allowed to do the same thing but with pencil and paper?
The benefit to not having an algorithm is that landlords have to compete against each other and guess what the market considers a reasonable price for their offerings.
If you had an algorithm that factored in square footage, bedrooms, bathrooms, distance to schools, distance to transit, etc. and everybody followed it strictly, you would have a cartel of landlords and no competition among each other. At that point, what stops them from collectively agreeing to raise the price by 5% each year? It’s not like housing supply will ever exceed demand, and consumers can’t exactly boycott shelter.
You’re correct in theory. However, in practice it’s likely to end up the same way publishing CEO salaries ended up leading to a constant rise in CEO salaries, rather than curtailing them, as intended.
Landlords are parasites.
Rents shall be determined solely by true random number generators