Allison Schrager: Algorithms don’t raise rents, landlords do

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A friend on dating apps recently told me she is often presented with men who are lying about their age — or rather, as they tell it, being forced to lie. The culprit, they are eager to explain, is the algorithm. “I am actually 57,” reads one profile she showed me, “but lowered my age because of the algos, LOL.”

What’s disturbing about her story is not that so many men are pretending to be younger than they are (what else is new?), but that they don’t seem to know what an algorithm is. Their problem is not a sinister program preventing them from finding a younger woman. It is that many women set an age range they don’t fall into. The algorithms are just doing their job, which is optimizing to find a solution for a given set of data.

Yet algorithms have become the villain of this technological era — blamed for depriving us of love, manipulating us on social media and increasing our rent. Democratic presidential candidate Kamala Harris has issued a plan to address that last problem, proposing to crack down on real estate companies that use “algorithmic price fixing” software to raise rents.

Algorithms are used throughout the economy to set prices and manage supply. Lowering the cost of housing is a major objective of the Harris campaign, so it not surprising that it is focusing on their use in real estate. It is far from clear, however, that algorithms are to blame for rising rents.

About one-third of rental units are priced using rent-setting software that is powered by algorithms that make use of lots of data from the local and comparable markets. The alternative — that is, landlords setting rents by looking at listings of comparable units and talking to brokers — is less precise.

The concern is that, if everyone uses pricing algorithms, landlords can collude and set above-market prices. Rising rents would seem to confirm the presence of collusion. As algorithms have become more common, rents have gone up. In 2011, according to the property management company RealPage, about 15% of rental units were priced using software; by 2021 this figure was 30%. At the same time, the US population grew in this decade, as did the desire to live in popular areas, and supply of housing lagged demand. This is a far more plausible explanation for the increase in rents.

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According to a study from two professors at the University of Pennsylvania’s Wharton School, management companies that use pricing software tend to be more responsive to market conditions: They raise rents more when the market booms, but also cut rents more and (and have fewer vacancies) when it falls. This suggests they are not colluding so much as maximizing profits.

At the same time, the study shows that landlords who use pricing software affect the behavior of landlords who don’t. In markets where more landlords use pricing algorithms, occupancy rates were lower and rents were 3% higher.

Harris supports a bill that would prohibit landlords from using the services of any company that coordinates pricing and supply information. It defines coordination as collecting data from multiple landlords, calculating a price based on that data with a “process that uses computation,” and recommending those lease terms. This would all be illegal if the lease terms were in violation of the Sherman Antitrust Act. But it is easy to foresee a situation where a landlord has to worry about being sued by his tenants anytime he uses data and a computer program to decide what rent to charge.

What the bill calls “consciously parallel pricing coordination,” most economists would call “using technology to set prices more efficiently.” The bill effectively bars landlords from using the best tools and available data to discover the right price for their units. This would indeed make landlords less profitable. But it would also make them less inclined to build more, or to lower rents when times are hard.

Besides, the main reason why rents increased was not collusion — it was a market short on supply, and that raises prices and leaves buyers with less market power. The way to restore power to tenants is not to outlaw the use of data. It is to encourage more building so consumers have more choice.

Algorithms do reflect market conditions. As housing markets across the US faced shortages in recent years, they contributed to prices rising even faster than they would have. But algorithms are not the root cause of the problem.

Of course algorithms can be used for nefarious purposes, in real estate or any market, and when people use them to collude or manipulate prices, they should be prosecuted. But it is not clear this has happened in real estate. Algorithms are often vilified, but they are a valuable innovation that can help markets become more efficient and offer more choice.

In either the housing market or the dating market, algorithms are not to blame. All they do is bring forth the underlying data that reflects a mismatch between demand and supply — whether the product is reasonably priced apartments or honest bachelors.

Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”

How chicken tenders conquered America

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MANCHESTER, N.H. — Fifty years ago, the breaded, fried chicken tender as we know it was invented in Manchester, New Hampshire.

At least, that’s what they say in Manchester. Such claims are usually impossible to prove, and the picture is clouded in this case because of the loose way the term chicken tender gets thrown around.

Those who are not particular about poultry terminology use tender to refer to any thin strip of boneless chicken. To people in Manchester and to chicken farmers, though, it means something specific: the tenderloin, a muscle along the backbone that gets very little exercise, hence its tenderness. Restaurants were cooking chicken sticks and chicken fingers before 1974. So far, though, nobody has seriously challenged Manchester’s status as first in the nation to embrace the true tender.

Whether you fully accept the claim or not, though, the floppy strips of white meat in a deep-fried crust do seem to have first appeared around that time. If you were born in the United States more than 50 years ago, you can probably remember a world without chicken tenders. If you grew up later, you can’t.

Today, the chicken tender is not just familiar. It is triumphant. It is a fixture of school lunches and kids’ menus, of all-night diners and gas stations. It can be found at airports, food courts and stadiums. It is a major reason for the double-digit sales growth that Chick-fil-A, Popeyes, Raising Cane’s and other chicken-centric chains have reported for five straight years.

Along the way, the chicken tender has become a symbol, although its meaning is hard to pin down. It can be an icon of simple, straightforward, unpretentious American taste. It can also be an expression of dull, unadventurous food engineered for the lowest common denominator. Restaurants, in their drive to stand out, have expended great effort devising crunchier breading, zestier dipping sauces, more tender tenders. And yet all the sauces in the world will never quite dispel the suspicion that the tender itself is, at heart, not very exciting.

If you share this suspicion, you probably shouldn’t voice it too loudly in Manchester. Last year, the city issued a formal proclamation declaring itself the Chicken Tender Capital of the World.

You can’t go very far in Manchester before bumping into a chicken tender.

They are sold at drive-in seafood shacks, coated in the same golden shell as the whole-belly clams. At a cafe in one of the hulking old mills beside the Merrimack River, they are served over waffles with hot honey and powdered sugar. A corner pizzeria in a residential stretch of northeastern Manchester is renowned for sweet and spicy Asian tenders that seem to be distantly related to General Tso’s chicken.

Like many stories about dishes that became touchstones of American cooking, the tale of the Manchester chicken tender starts with immigrants. In 1917, two men who were born in Greece and settled in Manchester, Arthur Pappas and Louis Canotas, opened a candy store downtown called Puritan. The shop grew and moved and grew some more.

In 1974, Pappas’ children added a large sit-down restaurant behind the shop, the Puritan Backroom. As one of them, Charlie Pappas, built out the menu, a fry cook told him “he had a small piece of chicken he didn’t know what to do with,” according to Charlie Pappas’ son, also named Arthur. This was the tenderloin.

“All it does is align the vertebrae,” said Russ Whitman, director of market reporting at Urner Barry by Expana, which tracks commodity prices. “It’s not used for walking or flapping the wings, so it is a very tender piece of meat.”

In those days, the tenderloin (or, to biologists, the pectoralis minor) was invariably sold with the rest of the breast attached. But if the bird was cut up before cooking, the tender has a habit of coming loose. This is what happened at the Puritan, where, after some tinkering, Charlie Pappas hit on a method for preparing it.

The recipe he devised is, in many ways, a peculiar item for a Greek-owned family restaurant in New England. For one thing, before it is fried, the meat soaks in a pineapple-juice marinade. It’s also served with what the Puritan calls “duck sauce,” a thinnish, yellowish, sweetish liquid. Arthur Pappas said that his father was inspired, in part, by the glowing orange condiment that Chinese restaurants give out with egg rolls, but that he experimented until “he came up with something he thought was a little different.”

In the early years, Charlie Pappas’ tenders were outsold by his barbecued lamb, broiled chicken breast and pizza. But something about the taste of fried white meat dipped in rejiggered duck sauce captured Manchester’s imagination. Word spread. Sales climbed. Imitators arose. Presidential candidates visiting the Puritan for meet-and-greets were obliged to eat a tender or two.

Slowly, inexorably, chicken tenders began to outsell everything else at the Puritan Backroom. At every birthday party, bar mitzvah and wedding celebrated at the restaurant, and there are many, tenders are mandatory. Although many, many tenders are eaten on site, even more leave the premises in takeout orders, sometimes in buckets of 150. On a typical week, Arthur Pappas said, the kitchen fries about 4 tons of tenders — 5 tons during the busiest times of year.

Orders of chicken tenders and French fries with a proprietary condiment it calls duck sauce at the Puritan Backroom in Manchester, N.H., Sept. 26, 2024. The breaded, fried tenderloin turns 50 this year. Yes, there was a time before it was sold in every cafeteria and airport. (Kieran Kesner/The New York Times)

Despite their local fame, fried chicken tenders were almost unknown outside New Hampshire for at least a decade. That changed for good in the 1980s, when Burger King, jealous of the McNugget, introduced its own hand-held morsels of fried chicken. A $20 million advertising campaign for the chain’s new Chicken Tenders worked too well. When locations around the country ran out of chicken, Burger King had to pull the ads.

The campaign had another effect, according to lawyers for the restaurant: It inspired imitators to sell their own chicken tenders. Burger King sued one of them, a poultry-packing firm, for copyright infringement. The trial was more dramatic than the run-of-the-mill intellectual property proceeding; on one of the nine days, a professor showed the courtroom where tenders come from by breaking down a 3-pound plucked chicken with a butcher’s knife.

Burger King won its case — the jury decided that, in effect, the words chicken tender described a product rather than a mere muscle.

One result of the verdict is that tender became a marketing term, like chicken fingers. Many people think the two items are interchangeable, although few of those people live in Manchester. Tender connoisseurs have little trouble knowing when they’ve ordered a pectoralis minor and been given a pectoralis major instead.

Even with Burger King’s help, chicken tenders did not begin to move in meaningful numbers until 1999, when the U.S. Department of Agriculture noticed enough volume to start tracking their price, and then only in the Northeast. It was, at that time, one of the cheapest pieces of the bird by weight, which made it appealing to restaurants.

“Because it was an unused portion of the chicken, it was a value at the time,” Whitman said. Today it is the most expensive cut. (In second place is the wing, another byproduct of chicken breasts that rose to stardom in the same period.)

The tender has other things going for it, too.

“Some of the popularity of the tender is that it is whole-muscle white meat that doesn’t have to be cut or portioned, and when cooked it makes a great hand-held item,” said Terrence O’Keefe, the content director of agribusiness news at WATT Global Media. The tender could, in other words, go from the box to the batter to the deep fryer to the table in minutes.

It wasn’t that easy in 1974, when most chickens in the United States were sold whole, according to data from the National Chicken Council. Since them, there’s been a huge shift toward cut-up parts. As carving technology at poultry plants grew more sophisticated, it became easy for processors to separate the tenders from the rest of the breast and pack them on their own.

One trait of the chicken tender that seems to have very little to do with its success, though, is flavor. On its own, without marinades or sauces, it has almost none. It is a piece of protein so mild it won’t offend anybody, although that, come to think of it, may be what has allowed it to come so far.

You could ask yourself why the least assertive part of the bird is the one Americans love best. You could wonder why no restaurant chain here has devoted itself yet to the French method of stewing gizzards to tenderness in duck fat, or cooking livers in pomegranate molasses in the style of Lebanon. You could get a little downcast thinking about how hard it is to find a good dish of cibrèo, the astonishing Tuscan stew of livers, hearts, coxcombs and testicles.

Or you could get creative, as the Puritan Backroom has done over the years. Besides its classic chicken tenders with duck sauce, the restaurant now offers tenders in a spicy breading, coconut-crusted tenders, and a version made by drenching the original recipe in Buffalo-wing sauce. Other restaurants will fry the meat in crushed cornflakes, Ritz crackers or Cap’n Crunch cereal. One brewpub offers more than a dozen sauces including Korean barbecue and Western apricot.

The front of the Puritan, where the Puritan Backroom is known for its chicken tenders, in Manchester, N.H., Sept. 26, 2024. The breaded, fried tenderloin turns 50 this year. Yes, there was a time before it was sold in every cafeteria and airport. (Kieran Kesner/The New York Times)

There’s something a little ridiculous about Manchester, the city that was once the center of the American industrial revolution, devoting so much energy to fried strips of chicken, and devoting itself so thoroughly that it can claim the title of chicken tender capital of the world. But there’s something impressive about it, too.

“It’s a silly idea,” said Nick Lavallee, who first went before the town aldermen to propose the declaration and kept bringing it up until the politicians surrendered.

“But you ask yourself: Is it true? Yes,” he went on. “Is it important? Sure. Manchester has had an identity problem. Why not point out the things worth celebrating?”

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Bethel University announces $20 million donation, launch of new health sciences college

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Bethel University on Wednesday announced a $20 million donation that will help launch a health sciences school, the first of four colleges the university is developing as part of a larger restructure.

The donation comes from Barbara and Rollie Anderson, longtime supporters of the Arden Hills university and namesakes of the Anderson Center, which houses the university’s graduate physician assistant and nurse-midwifery programs, among others.

Barbara is a university alum. Rollie previously served on Bethel’s board of trustees and is CEO of the St. Cloud-based Anderson Trucking Service.

“We have a lot of family members in the health care field. The work that’s done in health care is a natural fit for expressing care. I see this as a place where our family can extend that kind of care,” Barbara said in an interview. “It’s a great opportunity for us to make a difference in the future for patients who are in a very vulnerable situation in their lives.”

The Anderson Family College of Health Sciences will support the university’s nursing and health care programs and combine health care courses and departments from the College of Arts and Sciences — the university’s undergraduate college — and the College of Adult and Professional Studies and Bethel’s graduate school. That includes applied health sciences, counseling, nursing, social work, nurse-midwifery and premedical offerings, among others.

“This allows us to have synergy between different professional programs as we collaborate with health care systems to provide clinical training spaces,” Provost Robin Rylaarsdam said. “And it increases our ability to do inter-professional training, preparing our graduates better for their careers — they’ll practice in groups with different types of health care workers, all cooperating for the patient’s benefit.”

The donation will support the hiring of a health sciences dean, as well as new clinical spaces and financial support for students. It’s the start of a restructuring at Bethel that will result in the creation of four colleges.

For the health sciences college alone, the university hopes to raise $40 million.

“We are restructuring in a format that emphasizes the discipline or the specific area of expertise and training that we provide. So this case, it’s health sciences. And so we’re really excited to start with this one,” Allen said.

The three other colleges will focus on business, arts and sciences, and biblical theology and seminary, Allen said.

Health workers in demand

According to the Minnesota Hospital Association’s 2024 workforce report, the overall vacancy rate for health care workers was 12.9% in 2024, down from a peak of 16.2% in 2022 amid the coronavirus pandemic. That rate was just 4.7% in 2019.

Overall employment is expected to grow much faster than average for all health care occupations in the next decade, according to the U.S. Bureau of Labor Statistics. Due to employment growth and worker turnover, the government projects around 1.9 million health care openings per year through 2033.

Research by the Minnesota Department of Health points to shortages in nearly every health profession in nearly every region of the state, according to department spokesman Garry Bowman. The number of health care providers planning to leave the profession due to burnout more than doubled from 2019 to 2022, and there aren’t enough new nurses to meet demand.

For example, Minnesota institutions graduated 3,770 registered nurses in 2022, about 550 shy of what researchers say was needed.

Nate Chau, a student in Bethel’s physician assistant program, said students will especially appreciate the financial aid created by the donation.

“I think anything that can be done to alleviate that stress for students will help prevent the burnouts that are pretty prevalent in the health care field today,” he said.

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Need to go to the hospital? Texas and Florida want to know your immigration status

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By Shalina Chatlani, Stateline.org

State Sen. Victor Torres represents predominantly Hispanic Osceola County in central Florida. At Sunday Mass at his local church, immigrants often tell him they are scared to seek health care.

“They say, ‘My mother is ill, or my kid is sick, but I don’t have insurance,’’’ the Democrat said in an interview. “And I tell them, ‘You cannot be turned away. Go to the hospital. Don’t wait until the last minute when it’s too late.’”

Under the federal Emergency Medical Treatment & Labor Act (EMTALA), hospitals that have emergency departments and participate in Medicare — about 98% of hospitals in the United States — must provide emergency care to all patients, regardless of their ability to pay.

Florida and Texas, however, recently have required hospitals to ask patients about their immigration status. Supporters say the new policies will illuminate the costs of caring for people living in the country illegally, but critics say they are designed to dissuade immigrants from seeking care.

Florida Republican Gov. Ron DeSantis in May 2023 signed a sweeping immigration law that includes a provision requiring hospitals that accept Medicaid (which includes state funding) to collect data on patients’ immigration status. In August, Texas Republican Gov. Greg Abbott followed suit, by signing an executive order that requires Texas public hospitals to collect data on the costs they incur to provide emergency and inpatient care for people lacking permanent legal status.

“Texans should not have to shoulder the burden of financially supporting medical care for illegal immigrants,” Abbott said in issuing the order.

Data from Texas isn’t available yet. In Florida, however, a March report by the state Agency for Health Care Administration suggests patients lacking legal status account for a relatively narrow slice of overall health care spending.

In the second half of 2023, the agency found, immigrants without legal status accounted for 0.82% of hospital visits and 0.83% of emergency department visits. Florida hospitals spent a total of $69 billion in 2022, so based on those percentages, they spent about $566 million on care for immigrants lacking legal status.

The agency acknowledged that it did not know how much of that $566 million was so-called uncompensated care — that is, care not paid for by insurance or by the patient. It also did not find any correlation between a hospital’s level of uncompensated care and its percentage of patients living in the country illegally, nor was there an obvious connection between a hospital’s profitability and the percentage of its patients who were such immigrants.

In fact, the agency found that high levels of spending on uncompensated care were more associated with a county being rural than having a lot of immigrants lacking legal status.

“Research overwhelmingly suggests that immigrants don’t use as much health care and don’t use higher benefits than U.S.-born people,” said Drishti Pillai, associate director of the racial equity and health policy program at KFF, a health policy research organization. Pillai recently coauthored a KFF issue brief on the potential effects of the Florida and Texas measures.

KFF has found that immigrants spend less on health care than U.S.-born residents, and some research suggests that they end up subsidizing the health care of other U.S. residents through their payment of insurance premiums and taxes.

In both states, hospitals must inform patients that no matter how they respond to immigration-related questions, they will receive care. In Florida, hospitals also must tell patients that their answers won’t be reported to immigration authorities. Nevertheless, data from Florida suggests that the patients are being scared away by the prospect of being asked about their immigration status.

DeSantis has boasted that the policy has resulted in a decrease in Medicaid spending.

“We knew we’d get no support from the federal government, so we’ve had to do all these things at the state level,” DeSantis told Fox News in a June interview. “We made sure when you have people show up at the hospital that we’re asking about immigration status, and that’s caused the Medicaid expenditures to plummet by 50% in the state of Florida.”

A recent analysis of federal and state data backs up that assertion. In 2022, the year before the Florida law was enacted, state and federal Medicaid spending on emergency services for immigrants without legal status totaled $148.4 million. Between July 1, 2023, when the law took effect, and May 3, 2024, the total declined to $67 million, according to a Politico analysis of data from the Florida Agency for Health Care Administration and the U.S. Department of Health and Human Services. Medicaid, which provides health insurance to people with low incomes, is jointly funded by the federal government and states.

Florida Republican state Rep. Rick Roth, who runs a farm and employs hundreds of migrant laborers, voted for the measure. “I believe that the bill was mostly political, not punitive. It doesn’t prevent them from getting health care. It [creates] a perception that it’s going to be more difficult.”

Other supporters of the Florida law and Texas order say it makes sense to figure out how much money states are spending on care for immigrants here illegally — and if possible, to reduce it.

“Today, our health care system is overrun by illegals who came into our country, and the cost is borne by people like you and me, who are regular citizens, regular immigrants, who came here the right way,” Abraham George, the chairman of the Texas Republican Party — and an immigrant from India — said an interview.

‘A scare tactic’

Torres, the Florida lawmaker, pointed out that most immigrants and their families take on difficult work, contribute to the economy and pay taxes — without getting benefits such as Social Security, Medicaid or Medicare.

“This is a scare tactic by the Republicans on immigrants who are working every day and not asking for any handouts,” Torres said. “They’re working their tail off and just protecting themselves and their families.”

Illegal immigration is a central issue in the presidential campaign, and former President Donald Trump and other Republicans often talk about migrants draining public coffers by using benefits. Generally speaking, immigrants without permanent legal status cannot enroll in federally funded health care coverage under Medicaid, Medicare or CHIP (Children’s Health Insurance Program), and they can’t purchase plans under the Affordable Care Act. However, hospitals cannot turn them away in an emergency, and six states (California, Colorado, Illinois, New York, Oregon and Washington) plus the District of Columbia use state money to provide coverage to some adults regardless of their immigration status.

In Texas, even some Democrats worry about what hospitals and the state spend to care for immigrants without legal status who don’t have insurance and can’t pay out of pocket.

“These individuals are our fellow neighbors — they should never be denied treatment or demonized by extremists. But this can’t go unfunded in any way,” Texas Democratic state Rep. Eddie Morales told Stateline.

Morales said it’s legitimate for Texas to examine what it is spending on care for immigrants without legal status, and that it should help hospitals pay for uncompensated care. But he blamed Republicans in Washington for torpedoing a bipartisan bill that aimed to address the challenges at the border.

Long-term costs

Pillai, of KFF, said the Florida and Texas efforts might end up increasing those states’ health care costs if people lacking legal status avoid care but have to eventually visit the hospital in a worsened condition.

“This can cause routine situations to become more complex and expensive to treat later on, and it can lead to greater health care costs if an individual ends up presenting to the emergency room,” Pillai said.

In the issue brief, Pillai and her colleagues also note that immigrants without legal status play an outsize role in the Florida and Texas workforces, particularly in fields such as construction, farming and transportation.

That’s why Mike Oldham, president of the Texas Farmers Union, said he doesn’t support Abbott’s executive order. Oldham said that such measures create a climate of fear, such that migrant workers and their families who come to Texas to work “won’t even be seen out in the daytime.”

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“We have to have migrant labor. If you want milk and cheese and eggs and all the vegetables, you’ve got to have migrant labor,” Oldham said. “I can’t go pick up any white people that will do those jobs. They just won’t do them.”

Oldham said requiring hospitals to ask more questions on intake forms and hire interpreters to inquire about patients’ immigration status just creates unnecessary burdens for them.

Hospitals in Texas and Florida are too scared to discuss these policies, because they don’t want to be cast under a spotlight, especially if they serve people lacking legal status, said Deliana Garcia, a chief program officer at the Migrant Clinicians Network, a national nonprofit that focuses on health solutions for migrant populations and works with clinicians.

Garcia said the health care system can either support a person when they are relatively healthy, or provide more expensive care later on when their condition is more severe.

Besides, she said, “you don’t want someone who is ill circulating where they might then sicken you.”

Stateline is part of States Newsroom, a national nonprofit news organization focused on state policy.

©2024 States Newsroom. Visit at stateline.org. Distributed by Tribune Content Agency, LLC.