Sat, 15 April 2017
My guest today is Alex Lubinsky, co-founder of the Silicon Valley startup Rentberry.
Rentberry is a platform that lets landlords post units for rent so that tenants can bid on them. Once a landlord posts a vacancy, different potential tenants can make offers and the landlord can select which one to rent to.
Importantly, the landlord doesn't have to select the highest bidder. Potential tenants on Rentberry put in their personal characteristics up on the site, so landlords can select for the type of tenants they want. Maybe they're willing to accept a lower rent from a quiet single woman than a family of five with four dogs and six cats.
There has been some controversy about the site, stemming from the fact that it leads tenants to bid against one another, potentially pushing up prices. One tenant advocate said, "I think it's incredibly arrogant and incredibly concerning in light of the fact that we have the highest number of homeless families since the Great Depression. For them to do something to increase the rents seems really callous." Vanity Fair said Rentberry would turn rental markets into a Hunger Games-like death match.
Alex and I address these criticisms in the episode. The critics are missing one simple element to the story, which is that Rentberry doesn't just cause more tenants to bid on any given listing, driving up the price, it also allows each tenant to bid on more listings, driving down prices by giving each tenant more options. The two forces cancel one another. By only charging a one-time fee of $25 when a lease is signed, Rentberry reduces the costs of applying for vacancies. In some markets, tenants can expect to pay hundreds of dollars in application fees while apartment hunting and Rentberry allows them to avoid those. What Rentberry is really doing is allowing the market to approach equilibrium more rapidly.
Preliminary evidence also suggests that Rentberry decreases vacancy rates, since these are lower for landlords using the site than for the country in general. This is equivalent to an increase in the housing supply, which is unambiguously good.
Listen to the episode for the full discussion.
Fri, 7 April 2017
Hello and welcome to the fiftieth episode special of Economics Detective Radio! Today we have Ash Navabi back on the program, but we’re flipping the script: Ash will be interviewing me about the show and about all the things I’ve learned while making it.
In this episode, I alienate the political right by discussing the importance of labour mobility and the desirability of open borders. I also alienate the political left by expressing a lukewarm position on climate change. I also discuss my own research plans relating to law and economics.
Finally, we discuss literature! Really, if you like Economics Detective Radio, you have to hear this episode.