Many people blew their tops today when the Chronicle reported on Rentberry, a new eBay-style startup that will allow tenants to openly bid on rental leases in the city. This could be trouble.
Rentberry likes to think of itself as the next stage in the evolution of online apartment hunting. But bidding would presumably drive up prices, and San Francisco already has the highest rents in the nation. So, why would renters want to buy into a platform that would seem to make their monthly rent squeeze even tighter?
Rentberry CEO Alex Lubinsky told the Chronicle that Rentberry saves renters time and money (in application fees) during the apartment hunt. But savings would presumably be erased by the higher rent. To many, that sounds like a bum deal for tenants. So Curbed SF called Lubinsky and asked him what his reaction was to those kinds of criticisms. His first response: Bidding wars happen already anyway.
"I’m pretty sure I overpaid for my own apartment," Lubinsky says. (He has a one bedroom in SoMa for $4,500/month.) Without knowing how many other renters are interested in a place, tenants make blind bids and may end up paying more than they should. Lubsinksy argues that Rentberry makes an existing phenomena more transparent.
He also points out that Rentberry users don’t pay anything in fees unless they actually get the apartment, rather than shelling out money for applications and credit checks beforehand on homes they have little chance of ever living in. Rentberry at least gives you something for the $25 fee.
That may be all well and good, but with the housing crisis running people down every day, it may seem simply crass to capitalize on it. To that, Lubinsky replies that it’s the American way, saying, "This is the economy we have. We aren’t living in North Korea. We’re not living under Communism." (Lubinsky is Ukranian by birth, but has lived in the Bay Area since 1998, attended Monte Vista High School in Cupertino and, later, graduated from UC Berkeley.)
"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? We want to make sure everyone gets the fair market price," he adds.
And that’s the case against public indignation. Will it float? Well, Rentberry launches tomorrow. If renters buy in to the latest gimmick, it will take off. If not, it’ll be just one more capsized startup. As with the rentals themselves, it‘s up to the market in the end.