Hunting for a rental apartment in New York City and San Francisco—two of the most inflated housing markets in the country—is an exercise in pure masochism. Even when you see an apartment listing that you can kind of, sort of afford and you are extra overjoyed because it’s not a total dump, your spirits inevitably tank when you show up at a packed open house and you realize that hair-gelled guy next to you is willing to pay 15% more than the asking rent and put the first four months down in cash. Good luck.
Into this terrible situation jumps the latest real estate startup Rentberry, which the San Francisco Chronicle reports launched in San Francisco and New York this week.
The site aims to be an eBay-like auction site for rental hunters to bid on apartments in a competitive process. Rentberry says it offers an "efficient and transparent application process" that saves renters application fees—they only pay $25 for the place they get. Critics in San Francisco are calling it a platform that will inevitably encourage bidding wars and drive up prices even further in a city where one-bedrooms already average more than $3,000 a month. That said, bidding could drive down prices too—in theory—but that is less likely in San Francisco or New York than, say, less in-demand housing markets like Dallas, Texas, where Rentberry plans to launch next.
Speaking to Curbed, CEO Alex Lubinsky—who sold a previous IT startup last year and pays $4,500 a month for his apartment in San Francisco’s SoMA area—defends his service by saying that the service will stop tenants from making "blind bids" and overpaying, since overbidding asking price happens anyway. But that assumes that you are someone who has the luxury of bidding more than asking price in the first place. Many people don’t.
"Here we have supply and demand, and we have freedom of choice. If people are willing to pay a certain amount, why should the landlord not get that price?," he told Curbed. He is not wrong. But that doesn’t mean it’s fair, a problem in both San Francisco and New York City, where rent regulation is weak and new affordable housing developments scarce.
That said, this service is currently not more than just a concept. I signed up for Rentberry and can’t find any listings in New York City yet. So it could be much ado about nothing for now.
Cover Photo: Robert Kneschke via Shutterstock