It seems like a dream for developers to have their new website name-checked by the mayor just weeks after release. But in the case of Biddwell, a new app from Vancouver that enables renters to place silent bids on apartments, the attention wasn’t exactly what they wanted. Mayor Gregor Robinson didn’t praise the high-tech new startup, he expressed concern the real estate app might accelerate rapidly rising housing costs in a very hot real estate market.
"The potential for that to create more bidding wars with rental housing is a real concern," he told Vancouver’s News 1130 Radio. "With a very low vacancy rate, it’s a very tough market right now for people renting, so we’re watching it very closely."
Released last month, Biddwell arrives at a time when Vancouver, like many red-hot real estate markets across Canada and the United States, is experiencing high demand, low vacancy, and incredible pressure on rental prices. The app promotes its streamlined servie as a way to help tenants, but critics see the app as an accelerant, one that will make a competitive market even more tilted to the wealthy.
According to company CEO Jordan Lewis, the app, which streamlines the process of finding an apartment, lets renters create a rental resume with verified salary and credit scores, allowing them to place blind bids and help set their price. It’s not an open auction but a way for qualified tenants to have more of a say.
"We’re trying to create the fairest market online," Lewis says. "The best way to asses fair market value is to let the rental market decide what it should be. For us, the most underrepresented person in the rental market now is the tenant. They’re our north star. Any decision we made internally, that’s who we look out for."
Bidding on rental properties isn’t a new phenomena. But Biddwell is different—and in the eyes of some rental advocacy groups and city officials, potentially problematic—because it speeds up the process, and enables wealthy bidders to quickly price out other potential tenants.
Lewis, disagrees, and sees Biddwell as being more of an equalizer. The system lets users enter in salary and credit history and become pre-qualified tenants, allowing landlords to sort through applications more quickly and efficiently. The blind bid system doesn’t necessarily mean higher prices, he says. He believes his company’s app gives qualified tenants leverage. They can’t do anything about supply and demand, but they can get them noticed.
"Bidding wars are a big concern in a city like Vancouver," says Lewis. "Tenants should have the ability to negotiate pricing."
Landlords who are using the Biddwell system believe it can be a cost-corrective. Jay Lirag is Vice President of Leasing & Marketing at Deecorp Properties, which recently signed up with Biddwell to rent apartments in its new Ocean Creat apartment, listing every unit on the site. Located in the burgeoning West End neighborhood, the property is a 32-unit renovation. Lirag says Biddwell has been a big help, allowing them to sort through to flood of applications (125 in the first three hours alone) that came through when they put the building on the market. With tenant quality as the main determining factor, Lirag feels Biddwell is a huge asset for property managers.
"We felt that we were overpricing some units and underpricing others," he says. "It was hard to judge, so it was helpful to hear back from potential clients."
Others believe that in a city facing rapidly rising housing costs and a severe housing shortage—Vancouver’s vacancy rate, among the lowest in the world, is at just 0.6 percent—it’s naive to think that making it easier and quick to bid for apartments won’t jack up already high rentals costs.
Alvin Singh, chair of Vancouver’s Renters Advisory Committee, told the Globe & Mail that the app is a "symptom of a rental market that’s far beyond overheated," and that while it’s not an auction, "There’s no way that a system like this is not going to encourage rental rates to go up." Others have called it "the commodification of housing."
Cass Sclauzero, an advocate for affordable housing, feels the bidding system will only lead to more increases in competitive neighborhoods. Sclauzero, who brought attention to the rising cost of living in Vancouver, and the city’s absurd rental market, with the Twitter account @dearYVRLandlord, believes the premise of Biddwell, which she hasn’t used, will not as much add something new to the rental landscape, but just make it more high-speed and high-priced.
The focus on pre-qualified tenants also makes screens out certain people who may not have stellar credit, but are nonetheless quality, reliable tenants.
"To me, it’s fueling landlord’s greed and leading to more bidding wars between renters," she says. "With Biddwell, you have uninformed tenants just throwing cash at landlords."
Regardless of your view on Biddwell, the nascent app may be spreading to more cities with similarly overheated rental markets. According to Lewis, Biddwell has already attracted more than 600 users since debuting in early August, and plans to expand to Montreal, Toronto, and eventually the U.S. within the next year.