Day #043: A low-tech and a high-tech way to improve renting

Could we apply the Uber model to renting apartments and houses?

August 27, 2014; 6:00 AM • by Aaron Williams

Inspired by Michael Bierut’s 100 Day Project, 100 Days to a Better RVA strives to introduce and investigate unique ideas to improving the city of Richmond. View the entire project here and the intro here.

Idea: RVA Apartment Day and a high-tech improvement to renting apartments.
Difficulty: 1 — One costs practically nothing while the other could be a successful startup that improves the lives of users.

RVA Apartment Day

Finding a place to live can be stressful and time consuming–especially for Richmond’s younger residents.

Landlords around town should unite on the first Saturday in March to host an annual “RVA Apartment Day.” During a set number of hours, apartments for rent would have an open house. A universal logo could be used in front of all properties that participate in the event.

This would not only benefit people seeking apartments, but it could limit the amount of hours and number of times renters have to open their doors to strangers for viewings.

A High Tech Approach

For the past few weeks, residents of Richmond have been using Uber for the first time in RVA. UberX allows riders to easily find and pay drivers. At the end of trips, the rider rates the driver and vice versa. Could the Uber model be applied to rental housing?

The Uber app has a number of features that promote market efficiency. As I noted on day #002, it appears the Uber and Lyft founders were paying attention in Econ 101.

An Uber-styled app for rental housing would increase the number of buyers and sellers in a single market. This lowers prices, increases options, and increases competitive pressures.

Most landlords either license software for online bill pay or they accept hard copy checks that the renter has to deliver and the landlord has to deposit. This app could allow online payment through the app which would lower transaction costs. Charging a competitive rate on this step either by percentage or flat fee is how the app could generate revenue.

Couchsurfing and Airbnb have brought the sharing economy to short-term housing. There is obvious a much higher legal standard for renting, but an app could create economies of scale for paper and legal work that would lower entry and exit barriers for renters.

Most importantly, the system would create more information in the market. Instead of piecemeal reviews across an abundance of platforms, reviews and information could be handled through the app. This would increase participation and limit some of the sampling error associated with online reviews. It would also enable landlords to rate renters.¹

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Craig Newmark refuses to update Craigslist and sued PadMapper in 2012, a website trying to use Craigslist’s apartment listings with an improved interface. Competitors have failed to earn enough market share and traction.

Renting isn’t overly cumbersome in Richmond, but it could be easier without much effort. “RVA Apartment Day” and an Uber-styled app for renting would increase information in the market while making it easier to rent for all of Richmond’s residents.

Love this idea? Think it’s terrible? Have one that’s ten times better? Head over to the 100 Days to a Better RVA Facebook page and join in the conversation.

Photo by: turkeychik

This could create some issues. Increasing the frequency of ratings to every 3-6 months instead of the term of the lease or delaying the release of the ratings could give individuals a buffer against a negative rating ruining their rental profile. ↩