Overview
Title
Agency Information Collection Activities; Proposed Collection; Comment Request
Agencies
ELI5 AI
The Federal Trade Commission (FTC) wants to ask big companies that own a lot of houses for rent to share information about how they do business and set prices, so they can see if these companies make it harder for people to find and afford homes. They also want people to share their thoughts on this plan, before getting permission to officially collect the data.
Summary AI
The Federal Trade Commission (FTC) is asking for public comments about proposed information requests aimed at large Single-Family Rental (SFR) owner operators, known as mega investors, who own over 1,000 rental properties. These requests are intended to help the FTC study the impact of such large investors on housing competition, prices, and their influence on local markets. The FTC plans to gather data about these companies' business models, property holdings, and pricing strategies, with the goal of increasing market transparency and possibly informing future regulatory actions. Public comments will be considered before the FTC requests approval from the Office of Management and Budget to proceed with this data collection.
Abstract
The FTC is soliciting public comments on proposed information requests to large-scale Single-Family Rental (SFR) owner operators, known as mega investors. Mega SFR investors are those entities that own over 1,000 single-family rental properties. These comments will be considered before the FTC submits a request for Office of Management and Budget (OMB) review of the compulsory process orders described in this notice under the Paperwork Reduction Act (PRA). The compulsory process orders will seek information from those firms concerning their corporate structure, current and historical housing inventory information, as well as strategic business plans and other investor information regarding growth plans, competition, prices, and expenses.
Keywords AI
Sources
AnalysisAI
The document from the Federal Register describes an initiative by the Federal Trade Commission (FTC) to gather public input on a proposed inquiry into large Single-Family Rental (SFR) owner operators, referred to as mega investors. These entities are defined as those owning over 1,000 rental properties. The main goal is to understand how such large-scale property ownership impacts competition in housing markets, rental prices, and overall market dynamics. The FTC aims to collect comprehensive data about these companies' business operations, including their strategic plans and pricing methods, to inform possible future regulatory actions and improve market transparency.
Significant Issues and Concerns
The FTC has estimated that each organization will need between 150 to 600 hours to respond to the information requests, which may constitute a substantial burden, particularly for smaller companies. The broad range in these estimates lacks precision, potentially causing confusion or concern among respondents about their actual obligations.
Moreover, the estimated labor costs per entity, ranging from approximately $21,000 to $85,000, result in a total cost spanning between nearly $681,000 and over $2.7 million across all respondents. This broad range, without specific details on how these costs have been calculated or any consideration of variance, may be seen as imprecise.
The document notes potential savings based on current data storage methods utilized by mega investors, yet it does not specify how these savings could be realized or what steps the FTC plans to take to assist in minimizing these costs. Also, the language explaining specifications and definitions is complex and may benefit from simplification to aid understanding for all stakeholders involved.
Impact on the Public
The public may broadly benefit from this increased scrutiny on large-scale rental property investors. By exploring how these mega investors influence housing markets, the FTC can potentially support initiatives ensuring that housing remains affordable and competitive. Greater transparency into these companies' operations could lead to more informed policy decisions that safeguard consumer interests.
Impact on Specific Stakeholders
For consumers, the long-term impact could be positive if the study leads to regulatory changes that promote better competition and stabilize rental prices. On the other hand, the process could impose significant operational and financial burdens on the companies being studied, potentially affecting their business strategies and pricing.
For policymakers, the resulting data and insights could be invaluable in crafting regulations that better manage the influence of mega investors in the housing market. However, the exact process by which public comments will affect final decisions remains unspecified, which might lead to concerns about transparency and inclusivity in the decision-making process.
Additional Observations
There is a notable political undertone present in the comments from Commissioner Andrew N. Ferguson, who, alongside Commissioner Melissa Holyoak, addresses the timing of the initiative in relation to the political cycle. This political context could potentially color the perception of the study's motivations and could be seen as influencing the study beyond its stated objectives.
Ultimately, how the FTC handles the information collection, addresses public and stakeholder concerns, and manages confidentiality will critically determine the study's success and its potential to improve market conditions and policy effectiveness.
Financial Assessment
The Federal Trade Commission (FTC) document outlines a proposed study that involves collecting information from large-scale Single-Family Rental (SFR) owner operators, known as mega investors. The financial implications of this study are a critical aspect, particularly concerning the estimated costs that these entities will incur in complying with the information requests.
Labor Costs and Wage Estimates
The document provides estimated wage figures for different roles involved in gathering and producing the necessary information. It states assumptions based on data from the Bureau of Labor Statistics (BLS): an hourly wage of $62.18 for general and operations managers, $57.23 for data scientists, and $84.84 for outside legal counsel. These figures are then doubled to reach "fully loaded" rates accounting for non-salary benefits and indirect costs, resulting in $124.36, $114.46, and $169.68 per hour for the respective roles. The decision to double these hourly wage estimates is not fully elaborated, which may raise questions as to why this specific approach was chosen. A more detailed justification could enhance the understanding of these financial allocations.
Total Estimated Burden
For each entity required to submit information under this proposed study, the total labor cost is estimated to range from $21,274 to $85,094. When considering all 32 respondents, the overall cost spans between $680,753 and $2,723,013. This wide range could be seen as ambiguous, and more precision is necessary to fully comprehend the potential financial burden on these entities.
Additionally, while the document suggests possible cost-saving measures if data is already stored in an accessible format, it does not specify how this potential is weighed or utilized to minimize expenses. Greater clarity on this aspect could reassure stakeholders about efforts to reduce financial strain.
Resource Allocation Implications
The document indicates a significant resource burden by estimating the collection task to take 150 to 600 hours per respondent. This commitment of time reflects directly on the implied financial outlay needed to comply with the FTC's requests. For smaller entities, this demand may pose a substantial challenge, highlighting the importance of evaluating if the financial allocations are justifiable in proportion to the expected benefits of the study.
The broad range of estimated costs, both in terms of labor hours and financial expenses, underscores potential inefficiencies in resource allocation. Discussing more granular cost breakdowns based on current data storage practices could offer a more realistic financial picture.
In summary, the financial references in the FTC document play an essential role in understanding the scope and impact of the proposed information requests on mega investors. Despite providing useful baseline estimates, the analysis would benefit from additional details regarding how these figures were derived and strategies for minimizing financial impact through efficient practices.
Issues
• The estimated response time for the information collection ranges from 150 to 600 hours per entity, which may represent a significant resource burden, especially for smaller entities. More granular breakdowns and justifications for these estimates might be necessary.
• The estimated labor costs per entity range between $21,274 and $85,094, which translates to a total cost of between $680,753 and $2,723,013 across all respondents. This is a large range and lacks specificity, which could appear ambiguous or imprecise.
• The document mentions potential cost savings depending on the format in which mega investors currently store information, but does not specify how this varies or how FDIC plans to minimize these costs.
• The language detailing specifications and definitions, such as terms and required formats for data submission, may be overly complex and could be simplified to improve understanding.
• The document refers to wage estimates doubly loaded to account for non-salary benefits and other indirect costs but does not explain why doubling the figure is the appropriate measure.
• The language used in the process description for confidential comments is lengthy and could be more concise, highlighting key details about confidentiality requests more clearly.
• The timeline for comment submission, review, and subsequent decision-making might seem overly complex and bureaucratic, creating potential delays that are not fully explained regarding their necessity.
• No specific criteria are provided on how public comments will influence final decisions, which may be viewed as lacking transparency.
• Footnotes contain intricate details that are important but may be difficult for a lay reader to follow without additional context or simplification.
• There is a strong political undertone in the Statement of Commissioner Andrew N. Ferguson, which might not be appropriate for an official procedural document and could bias the interpretation of the study's timing and motivation.