New York City rental bidding wars drive up prices

NYC

New York’s competitive rental market has some would-be tenants offering to pay a year’s rent in advance and some rent-stabilized tenants struggling with huge hikes due to the loopholes that preferential rent leases provide.

New York City

But, lest you be inclined to take the optimistic view of the situation, let us remind you that things can always get worse.

Last week saw the launch of a Bay Area start-up applying eBay’s auction model to the New York and San Francisco rental markets, Curbed first reported.

Rentberry gives landlords a platform on which to list their long-term property rentals for free. Potential tenants can bid for those units, taking stock of the number of their competitors and the current highest offer.

“Essentially, we offer a more efficient and transparent application process, which has the elements of bidding and an auction,” Rentberry C.E.O. Alex Lubinsky told us.

Hundreds of landlords had already signed up for the service as of last Monday, he said.

Apartment seekers have been more wary, we presume, as bidding wars are likely to inflate prices even more.

Rentberry has said that prospective tenants will benefit from its service by saving time searching for their next place and money in rental application fees. The start-up only charges apartment bidders a $25 fee after they sign a lease.

According to Lubinsky, the start-up brings transparency to bidding wars that put tenants, who place blind bids and may end up paying more than market value, at a disadvantage. The highest bidder on Rentberry won’t necessarily be the winner either, since a landlord may pick a bidder with a lower offer but who has more suitable credentials, like higher credit scores.

Asked to defend a service that appears to capitalize on the housing crisis slamming both New York and San Fransisco, Lubinsky gave Curbed a quintessentially capitalist answer: “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.”

Perhaps the proletariat can take comfort in the fact that Rentberry, if it makes it to six-month mark, tentatively plans to charge landlords 25 percent of the extra monthly income they’re making above the original listing price for the duration of their tenant’s lease.

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