No, Rent Management Software Didn't Make Phoenix Expensive

I have an op-ed in the Arizona Capitol Times.

Arizona’s attorney general, Kris Mayes, has filed a lawsuit against several landlords, alleging that the use of a rent management software package is responsible for much of Arizona’s significant rent inflation. She goes so far as to dismiss alternative explanations for high rents.

In the piece, I outline some of the basic ideas that I have laid out in a few posts here - the very notion of an apartment cartel doesn’t pass the smell test on a number of dimensions. And I note the experience of a recently obstructed apartment complex in the valley, in which the city and county did exhibit one of the necessary components of a cartel.

Cartels work by limiting production. If Arizona had a bagel cartel, the members would agree to limit the number of bagels they baked. They wouldn’t each bake the regular number of bagels, refuse to sell some of them, and let them go stale each day.

That is what the supposed apartment cartel is doing. They are going to all the trouble of building and maintaining apartments, only to let them sit empty.

In the real world, functional cartels, as opposed to Mayes’ imagination, prevent new bagel stores or apartment buildings from opening. After limiting their production, they sell all the limited products they have produced.

Of course, the defendants in Mayes’ case don’t do that at all. They couldn’t begin to do that. They are trying to build as many new apartments as they can. And what do you think stops them from building more?

The recent failure of the proposed Sonoran Landings project in Chandler makes that clear…

Please read the whole thing.