As if renting an apartment wasn't stressful enough: Between the cutthroat competition, massive upfront expense, and daunting paperwork, now renters in more than 1,000 cities can add the panic-inducing thrill of online bidding wars to the process.
Rentberry is an online rental marketplace that allows prospective tenants to bid for available apartments. Simply attend an open house — trying not to make eye contact with the fellow humans whose dreams you intend to shatter later — and then go online and try to outbid each other, driving the rent upward in a frothy mix of hope and spite. Sound like fun?
Founded in San Francisco (of course), Rentberry has been operating in a handful of markets since last summer, including Los Angeles, New York, Chicago, Austin, and Boston. Now, the outrage-inducing site is going national.
Rentberry bills itself as "a transparent home rental service and a price negotiation platform uniting tenants and landlords," which makes you wonder if they understand the concept of unity. The site, says Kriston Capps for CityLab, "seems designed to exploit renters."
To be fair, landlords have listed 100,000 properties through the service, so some apartment hunters must find it useful. Savvy renters might be able to make the service work in their favor by setting up a charismatic user profile and submitting a custom bid—perhaps proposing to pay a bit less in monthly rent, but offering a larger security deposit and touting great references.
In hot rental markets that lead many prospective tenants to submit blind offers over the asking rent to try and win an available apartment, Rentberry's founder Alex Lubinksy argues the site's transparency will help level the playing field. (He also says apartments listed on the site rented for 4.3% less than comparable units listed elsewhere.) But of course, on a flat field—or, frankly, any other surface in Manhattan—the rich guy usually wins anyway.
"An apartment is not a car or a coffeemaker. People need a place to live."
It's just the latest (level) battlefield in an inherent and longstanding conflict that arises when the free market collides with a basic human need. While it's only natural for landlords to operate as a business and to seek the most reliable, high-paying tenant they can find, an apartment is not a car or a coffeemaker. People need a place to live.
To that end, the U.S. has fair housing laws meant to protect renters from exploitation and discrimination. It's unclear whether Rentberry overtly violates any of them, but the possibility certainly exists. Landlords aren't required to accept the highest bid or the first qualified tenant; they can factor in background checks, employment history, credit scores, user profiles, and other details Rentberry provides to choose the most suitable tenant. In a world where identical resumes yield dramatically different results when the job seeker's name sounds Black, you don't have to stretch your imagination to see the potential for abuse.
One thing's for sure, though: The apartment rental business is probably due for some disruption. If Rentberry (or anyone else) can efficiently assume the role of middleman—long the purview of rental agents and brokers—by smoothly connecting landlords with tenants and facilitating credit and background checks, applications, leases, and other paperwork, no one's going to miss the onerous fees that accompany the traditional arrangement.
In competitive rental markets like New York, Los Angeles, or Boston, rental brokers may charge a full month's rent or more for those services. And these fees are often paid by the tenant if the market is hot, when apartments just about rent themselves.
It's hard enough cobbling together three months' rent upfront for first, last, and security. But paying another month's rent to the joker who simply unlocked the front door and played on his iPhone while you looked around the place? That's infuriating. By contrast, Rentberry currently charges just $25 once you sign the lease on your new home. That may eventually change to a percentage charged monthly, according to the Wall Street Journal, but it's still meager—and spread out—compared to a broker's fee.
Of course, Rentberry's ability to spark ruthless bidding wars all depends on whether landlords and renters actually play along and use the service. Would you?