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Seattle temporarily halts rent bidding. (Flickr Photo / Shumei_There)

The Seattle City Council unanimously approved a one-year moratorium on sites that allow prospective tenants to bid on rental homes Monday.

Startups like Rentberry allow landlords to list rental units so that would-be tenants can offer higher or lower prices, based on what they would be willing to pay. The sites take a percentage of the difference. Operators of these rental auction sites claim supply and demand already affect rent prices and that their services just make the process more transparent.

But the City Council is concerned rent bidding could make it harder for low-income residents to afford homes. Seattle will take the year to study whether bidding on rent violates city law and then reassess whether the companies can continue to operate in the city.

The ban comes as Seattle is navigating an affordable housing crisis driven by strong job growth in tech and other sectors. The City Council has been actively trying to pass rules that prevent Seattle from falling prey to some of the issues San Francisco is grappling with.

Last year, the city passed regulations restricting Airbnb hosts in the hopes of ensuring enough long-term housing supply for permanent residents. Seattle also passed a pioneering law that would give Uber and Lyft drivers (who operate as contractors) some of the protections employees receive. That law is currently being debated in court.

“Innovation in technology has been a key component of what makes Seattle such a great city, adding to our economic diversity,” Councilmember Teresa Mosqueda said in a statement. “At the same time, we must have the opportunity to learn about new platforms, such as these ‘rent bidding’ platforms, and ensure that they live up to the equity and housing access values of our city.”

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