Renting? Rent too High? Odds Are DOJ Suit vs RealPage Matters to You

It would be a mistake to think that the only reason that rents are so high in Polk County, central or other parts of Florida, and across the U.S. is due to the alleged price fixing scheme that the U.S. Department of Justice (DOJ) has brought against RealPage. That said, the DOJ Antitrust Division has filed suit, and as the image at the link here from the RealPage website indicates, RealPage is operating in this area. So, if you or someone you know lives in an apartment or rental, that litigation ought to interest you because it impacts someone you care about. It should also be noted that some who live in a manufactured home community (MHC) may also be impacted by price fixing schemes, see the report with analysis linked here.

The economic ripple effects can further impact those who are buying or own their house too.

More Americans are becoming aware of the harm caused by market manipulation, the various kinds of monopolization strategies used by so-called predatory businesses, and the importance of antitrust law enforcement to fight these problems. That isn't a left-right, Democrat or Republican, issue. Monopoly power in business is a problem that dates back hundreds of years. Thomas Jefferson said that one of the things he wished was in the U.S. Constitution was a provision against monopolies.

In fact, as this screenshot of a YouGov survey revealed, most Americans of whatever background support antitrust (i.e.: anti-monopoly, anti-market manipulation) laws.

Someone can oppose much of what the Biden-Harris administration has done that has fueled inflation that contributed to price hikes. But we should all be willing to give credit where and when it is due.

The following pull-quotes are from their White House Fact Sheet on Competition. These quotes from the Biden-Harris White House ought to get heads nodding even from MAGA Trump-Vance supporters. The italics are added to make it clear that these are quoted remarks, but otherwise it is as posted on the White House website.

...For decades, corporate consolidation has been accelerating. In over 75% of U.S. industries, a smaller number of large companies now control more of the business than they did twenty years ago. This is true across healthcare, financial services, agriculture and more.

That lack of competition drives up prices for consumers. As fewer large players have controlled more of the market, mark-ups (charges over cost) have tripled. Families are paying higher prices for necessities—things like prescription drugs, hearing aids, and internet service.

Barriers to competition are also driving down wages for workers. When there are only a few employers in town, workers have less opportunity to bargain for a higher wage and to demand dignity and respect in the workplace. In fact, research shows that industry consolidation is decreasing advertised wages by as much as 17%. Tens of millions of Americans—including those working in construction and retail—are required to sign non-compete agreements as a condition of getting a job, which makes it harder for them to switch to better-paying options.

In total, higher prices and lower wages caused by lack of competition are now estimated to cost the median American household $5,000 per year.

Inadequate competition holds back economic growth and innovation. The rate of new business formation has fallen by almost 50% since the 1970s as large businesses make it harder for Americans with good ideas to break into markets. There are fewer opportunities for existing small and independent businesses to access markets and earn a fair return. Economists find that as competition declines, productivity growth slows, business investment and innovation decline, and income, wealth, and racial inequality widen...

As you ponder that, consider what follows. As a disclosure, I don't bank at JP Morgan Chase and don't have stock in that company. That said, their CEO Jaime Dimon said the following that sheds more light on what's happening with respect to consolidation in the U.S. economy, and how that plays into less opportunity, higher costs, and lower incomes for tens of millions of Americans of all backgrounds and beliefs.

Per left-leaning CNN was the following report, and again, it is italicized to indicate that the following is quoted from that source, which linked Dimon's annual letter to his company's shareholders.

The stock market is shrinking and Jamie Dimon is worried

The number of publicly traded companies in the United States is shrinking. Jamie Dimon, one of the world’s most influential business leaders, is worried.

At their peak in 1996, there were 7,300 publicly traded companies in the US. Today there are about 4,300.

It’s not that America has 40% fewer companies than it did 30 years ago, it’s that companies are increasingly staying private, largely outside the scrutiny of the public eye.

“The total should have grown dramatically, not shrunk,” wrote Dimon, CEO of JPMorgan Chase, in his annual shareholder letter...

The PE boom: The shrinking public market has private equity to blame — funds that pool money from investors to acquire or invest in companies...

So, the Biden-Harris fact sheet on competition, and the Dimon letter to shareholders, each mention that there are fewer public companies, that consolidation is occurring, even though they are coming from different perspectives.

A more or less steady pace of consolidation or oligopoly style of monopolization has been occurring that is harming Americans.

That pattern of consolidation is also harming the housing market.

An oligopoly is defined as a market where a small number of companies have a significant amount of influence over that market, profession, or industry. While my focus is housing, note that in healthcare, there are fewer providers as that industry consolidates too.

According to left-leaning Google's artificial intelligence (AI) powered system called "Gemini" is the following. Again, italics are added to make it clear that these are quoted.

Yes, there has been consolidation in the building industry in 2023 and 2024, particularly in the homebuilding and building products sectors:

• Homebuilding In 2023, public and private homebuilders closed 12 mergers and acquisitions (M&A) deals, which is higher than the historical average of eight. ...

That same response to my inquiry to Gemini about consolidation in the construction sector said this.

Building products

There has also been consolidation in the building products space. ...

Some say that the construction industry may become even more consolidated in the future, which could have both positive and negative effects. For example, consolidation can lead to efficiency gains, but it may also threaten smaller and mid-size firms.

You don't need a Ph.D. or master's degree in economics to know that when there are fewer competitors in a market, prices tend to rise.

Obviously, the DOJ has yet to prove its case against RealPage, they are allegations at this point. But as the report with analysis linked here framed in the context of the DOJ case against RealPage indicates, in the manufactured home community market, consolidation has led to sharply higher costs among certain land-lease manufactured home community brands that have been deemed 'predatory' by their residents and resident-advocates. Meaning, the DOJ and state level antitrust officials should investigate and litigate on behalf of mobile home and manufactured home owners who are being hit in Florida and across the country by purportedly predatory brands, some of which operate in Polk County.

Gemini used the phrase "efficiency gains."

• "Efficiency gains" are often business code-words for jobs being eliminated.
• "Efficiency gains" are also at times code words for threats to: "smaller and mid-size firms."
• "Efficiency gains" can mean less opportunity, fewer choices, lower pay, and higher costs.

Big businesses often prefer the status quo over the notion that people like you and me may earn more, could have more opportunities, and have a less stressful life.

Smaller businesses come and go for a variety of reasons. Some of the causes for a business exit are innocent enough, as in the case when a "mom and pop" business doesn't have an heir that is interested in running the company, and the parents want to sell out in order to retire.

Consolidation has hit the media world too. Most of us have heard the Senator Bernie Sanders (VT-DS) claim that most of the newspapers and big television networks are owned by a relatively few companies. That is demonstrably true. See the award-winning docu-drama Shadows of Liberty.

Left-leaning Poynter said the following.

A quarter of all U.S. newspapers have died in 15 years, a new UNC news deserts study found

At least 1,800 communities that had a local news outlet in 2004 were without one at the beginning of 2020.

Facts are what they are. Consolidation is steadily sweeping our country. Fewer options has real world impacts on our everyday lives.

Let me stress that this is not a pitch for politician or party (I'm a political independent and have been for a dozen years). That said, there are things in that Biden-Harris White House fact sheet page that I would disagree with, based on evidence and common sense. But their quoted statements above are well supported by the evidence.

That noted, consolidation is a serious issue in media, in housing, and in most other parts of our society.

As a closing shout out, be glad that the Patch.com makes this platform possible, because the news and views desert that Poynter mentioned and Senator Sanders lamented could be bigger without the Patch.

Looking ahead, I plan to share more on why we suffer with an affordable housing crisis by digging deeper into facts and evidence of monopolization, consolidation, and its impact on housing affordability. It will include what trade groups like the Manufactured Housing Institute (MHI), the more small business and consumer interests focused Manufactured Housing Association for Regulatory Reform (MHARR), CFED (since rebranded as Prosperity Now), and the Private Equity Stakeholder Project (PESP) have said has been playing out in the manufactured home industry. Wherever you live, it will help explain more reasons why housing costs are too high. Watch for it. ##

L. A. “Tony” Kovach and his family live in a manufactured home on private property in Winter Haven, FL. He is the co-founder of ManufacturedHomeLivingNews.com and ManufacturedHomeProNews.com, trade publications serving segments of the manufactured home industry. Having worked in several segments of the manufactured home industry for over 3 decades, Kovach is a widely acknowledged and often praised expert on manufactured housing.