Disrupt something else, please.
Disrupt something else, please. Rentberry

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Two recent startups allow landlords to post rental units online and invite tenants to place bids based on how much they'd be willing to pay in rent. The websites also display credit scores and other information from renters. Together, the tools provide a powerful platform for property owners to get the most bang for their buck.

While neither of these websites, Rentberry or Biddwell, has taken off in Seattle yet, advocates fear that the practice known as “rent-bidding” could drive up housing costs if these platforms become more popular.

So the Seattle City Council took some pre-emptive action. On Monday, city council members voted unanimously to place a one-year moratorium on rent-bidding websites, giving city officials time to study whether they violate housing regulations. The ordinance also gives the option to extend the moratorium for a year.

Today's move likely makes Seattle the first city in the United States to take action against rent-bidding. Parts of Australia banned the platforms last year.

“At it’s heart, this is really about fair housing,” said council member Teresa Mosqueda, who sponsored the bill. “It touches on our commitment to try to be proactive and get ahead of new platforms as they come on the market to make sure we’re looking at any unintended consequences."

It’s unclear whether rent-bidding platforms conflict with any of Seattle's housing laws, such as the first-in-time ordinance requiring landlords to rent any available units to the first applicant who meets advertised criteria. Landlords are currently challenging the City of Seattle over its first-in-time law in King County Superior Court.

The Associated Students of the University of Washington first brought concerns about rent-bidding to the city council earlier this year, emphasizing that potential rising housing costs would especially burden students.

As rent-bidding websites started popping up in the last couple years, they've come under fire for giving more control to landlords even though they already wield more power than tenants in the housing market.

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In interviews, Rentberry CEO Alex Lubinsky touts a free-market ideology associated with Silicon Valley-types. "There’s a syndrome in Silicon Valley where people hate engineers,” Lubinsky told San Jose Inside. “But if there were no engineers, there would be no Silicon Valley. The problem is not us, it’s not startups or the tech industry or the landlords. The problem is actually government.”

After entering the San Francisco and San Jose markets, Rentberry self-reported that the site increased rents by 5 percent above listed prices, Lubinksy said in the same interview.

At the time this post went live, no Seattle properties showed up on Rentberry. Biddwell had 62 units listed in the city. Neither website returned requests for comment.