Rentberry sues Seattle over temporary rent-bidding ban

Rent-bidding platform Rentberry, a landlord, and the Pacific Legal Foundation (PLF), with support of landlord-advocacy group Rental Housing Association of Washington (RHAWA), have sued the City of Seattle over a year-long ban on rent-bidding platforms.

The ban, passed unanimously back in March, puts a temporary moratorium on platforms like Rentberry—where instead of presenting a fixed price and terms, landlords review multiple offers, or bids, on a rental property—while city staff study the effect of such platforms on the housing market.

Specifically, the ordinance prohibits use of “online or application-based” platforms that facilitate auctions over rental terms—including not just the base monthly price, but lease length and other terms—for one year. During that time, the ordinance directs city staff to study compliance with city laws and effect on housing equity. The biggest city law in question was the “First in Time” law, which required a landlord to accept the first qualified applicant for a rental property. The law was overturned in another PLF and RHAWA suit in late March, but is currently under appeal. Despite still being tied up in court, PLF is using that decision as a justification to overturn the ban.

The suit also argues that the ban violates First Amendment rights of landlords. PLF made a similar argument in a recently filed suit against another Seattle rental law which bans housing discrimination based on criminal records.

“We passed a moratorium on rent bidding applications so we as policy makers can have an opportunity to determine how these platforms intersect with our fair housing laws,” said Teresa Mosqueda, who introduced the ordinance, in a statement to Curbed Seattle. “This is a civil rights issue regarding equity in access to housing in Seattle. I believe we are well within our rights to ‘push pause’ and ensure that our city has the opportunity to consider how our regulatory framework applies these platforms, and how they comport with equity in access to housing before they permeate the market.”

Delaney Wysingle, the landlord named in the suit, said in a statement that he had been hoping to use Rentberry this summer “to easily communicate with his tenants and “to facilitate easier communication with both existing and prospective tenants.” A press release from RHAWA and PLF said the ordinance “unconstitutionally deprived him of the ability to do so.”

“I do not believe there are any ‘free speech’ violations associated with this legislation,” said Mosqueda. “Landlords still retain the right to post rental listings on whatever sites they choose. Rather, this law is a means to identify how the process of bidding rents through these platforms comports with our fair housing laws.”

Mosqueda said that she has “full faith in our City Attorney’s office to defend against this lawsuit.”

Dan Nolte, a spokesperson for the City Attorney, said that the office had not yet received the complaint, but once it does “we’ll review it and determine our next steps.”

The ban on rent-bidding comes during a hot Seattle home-buying market, where, without enough housing to go around, bidding wars (especially at lower price points) drive up sale prices of homes.

As new rental homes have come online, skyrocketing rents have begun to level out a little bit, but too late for many—Seattle’s supply of affordable housing remains low. The ordinance nods toward Seattle’s “very competitive” rental market “causing scarcity issues for tenants.” (An inventory crunch, as many argue, isn’t the only thing driving up home prices in Seattle—but the ordinance prevented rental homes from literally being given to the highest bidder, for now.)

While news was announced by RHAWA, the group is not officially named in the suit. Still, RHAWA board president William Shadbolt argued in a statement that rent-bidding platforms could result in win-win situations for both landlord and tenant: “Rent bidding sites offer renters and landlords to settle on mutually agreeable terms, terms which could greatly benefit the renter such as negotiating lower rent or deposit,” said Shadbolt in a statement.

Mosqueda reiterated that the ban isn’t permanent: ”The city is working with landlords and consumers as we study this issue in anticipation of revisiting the moratorium next year—with more information and data to inform any long-term regulation.”

This article has been updated with more specific information on Wysingle’s situation and RHAWA’s involvement.

• CB 119198 [City of Seattle]