Renters need collective solutions

New players in the private rental sector claim to make things better for renters. In reality, they benefit certain renters at the expense of others. What we really need are structural solutions.

One of the latest attempts to make money from renters comes from companies launching ‘rent-bidding’ apps. These apps turn the rental application process into an auction: ebay for the human right to shelter. But they have lofty claims arguing that they benefit renters and “increase transparency”.

Who benefits here? You could say that the successful bidders benefit, even if they end up having to pay more. The other beneficiaries are the owner, who gets more income, and the companies, who take a cut.

Of course, there are losers too: the renters who miss out. If not for the rent-bidding app, the single mum on minimum wage might have secured a home. Instead, she’ll have to spend another weekend on the hunt.

So it’s hardly true that a rent-bidding app benefits renters. At best, it benefits a renter, or a single group of renters. But if you see renters as a community with a common interest in affordable housing, renters are unequivocally worse off.

The same is true of systems that ask renters to hand over more information during the application process in order to improve their chances. These platforms encourage renters to sacrifice their privacy to help them make a successful application. TrustBond’s “TrustScore”, for example, asks you to link your social media accounts. If you apply for a property through Snug, you are generously given the option to pay a fee to run your name against a database to check that you haven’t previously appeared before a rental tribunal.

Again, this might benefit the individual renter who decides to trade off more dignity in a desperate search for housing. But renters on the whole are worse off: they end up with less privacy, and more costs. Even worse, if all renters eventually knuckle under and start complying with invasive self-disclosure requirements, then the individual benefit is largely gone. Now everyone is worse off.

In “Evicted: Poverty and Profit in the AMerican City”, sociologist Matthew Desmond offers a harrowing account of the private rental market in Milwaukee. While the book focuses on evictions, it inevitably covers applications too, as every eviction results in a desperate flurry of home-hunting. “There are losers and winners,” he writes. “There are losers because there are winners.” [emphasis added] He goes on to quote Martin Luther King Jr.: “Every condition exists simply because someone profits by its existence.”

So these companies may well claim that there will be winners. But they fail to acknowledge that there will also be losers. As a community, renters are worse off. Landlords and third-party companies are advantaged. Individual renters: some win, some lose. Renters as a whole: losers.

These individual approaches that divide renters and make us compete against one another are a zero-sum game. Your gain is my loss. Instead we need structural responses that benefit all renters, that are wins for renters as a community.

For example:

  • Minimum energy efficiency standards will ensure that all rental properties are cheaper and easier to keep at a healthy and liveable temperature. And because all properties have to meet a new standard, it’s not possible for landlords to charge a premium.
  • More supply of housing will mean less intense competition between renters. It will mean more landlords having to compete on affordability or, if you can even imagine it, maintenance and upkeep. All renters benefit, because average rental costs are lower.
  • Restrictions on unfair evictions mean all renters can be more confident in standing up for their rights. Renters would have greater security of tenure and would be more able to make a home and put down roots in their community.

So keep this in mind next time you hear a start-up promising to make things easier for renters. Is it landlords who end up with more of our money? Is it just some renters, a select few, who win at the expense of others? If so, it is just a mirage.

The problems we face as renters are collective, structural problems. The solutions we need don’t pit renter against renter. Instead, they involve all of us, working together, for stable, affordable, and liveable homes.