This San Francisco Landlord Hosted a Rent Bidding War

Bidding wars might be common for competing home buyers, but San Francisco’s rental market has gotten so competitive that one landlord is taking the practice to potential tenants.

Property management company Centron emailed attendees of an open house for a two-bedroom apartment in Alamo Square asking them to “reply with their best offer of rent,” the San Francisco Standard reported. The bidding started at $5,000 per month.

“I felt like it broke some unspoken covenant of renting,” an anonymous tech worker told the Standard. “It just felt really scummy.” The worker and her roommate submitted an offer for $5,100 and were told they’d made it to the next round of bidding and were asked to submit a higher offer. “It was all so weird,” she said. “It seemed like a tactic to drive the price up with competition.” They didn’t raise their offer and lost out on the apartment.

Demand for apartments in San Francisco has been surging as more tech and artificial intelligence workers look for apartments while facing a constrained housing supply. Apartment availability in San Francisco fell 24 percent in the past year, per RentCafe. Rent prices have been soaring as median rent prices grew past pre-pandemic levels earlier this year.

Centron’s “douchey” rent bidding process could be illegal, tenants’ rights lawyer Joseph Tobener told the Standard.

“If they advertised a set price, and then the landlord decided to do a bidding war, that would implicate unfair competition laws in California, because it’s bait-and-switch — false advertising, essentially,” Tobener said, noting the move also “violates the spirit” of the Consumer Legal Remedies Act, a California law that bans unfair business practices such as false advertising, misrepresentation and deceptive sales tactics.

Still, tenants would likely need more legislative footing if they opted to bring a case against this kind of rent bidding.

“There’s nothing that runs afoul of the San Francisco rent ordinance right now. But the Board of Supervisors could make this just squarely and plainly illegal,” Tobener said. The lawyer said this is the second such case he’s heard of in San Francisco this year.

A Centron spokesperson classified the practice of asking applicants how much they’re willing to pay as a “fairness process” that the company uses “when there is overwhelming interest for a unit.”

— Chris Malone Méndez