In a new working paper from the Federal Reserve Bank of San Francisco, researchers find that “housing supply constraints are quantitatively unimportant in explaining rising housing costs across U.S. cities.” Rents are relatively inelastic, which means prices don’t budge with increases in supply or low demand. Despite growing empirical evidence that casts doubt on deregulation as a panacea to high prices, neoclassical economic proponents continue to apply the logic of widgets to the places where people live.

Instead, we should think about rental housing prices like airline tickets. The similarities are plentiful, mainly because modern pricing models for rental housing originate from business strategies developed by the airline industry. Where airline tickets are segmented and pre-priced by cabin and row, prospective renters scour a limited selection of floor plans leased at fixed prices. Tenants are tacked with junk fees and hidden costs. Things like trash removal services at an apartment complex or selecting your seat on an airplane, both of which were once included in the price, have now become non-negotiable add-ons. Just as airline tickets are priced by which part of the cabin you’re located in, what day and time you want to travel, how close to the window you want to be, and where you’re going, rental housing supply is carved up by location, grouped into categories by floor plans, and released in limited quantities so the market is never oversupplied.

And like the airline industry, where ownership is increasingly concentrated and competitors collude to set prices, in housing markets, the consolidated ownership and coordinated practices of property owners and managers worsen these pervasive business strategies. Large financial firms and corporate landlords have built massive holdings in the multifamily, single-family, student housing, and manufactured home markets, securing market power over local housing stock. Lines between these firms have blurred because many of these financialized landlords are entangled with each other through joint ventures, partnerships, and minority stakes in portfolios.