Apartment Building Ratings Startup Launches Multifamily Standards Board
Standards organizations exist to help provide benchmarks for industry operators so that they can do their jobs efficiently and effectively. The real estate industry has several standards setting organizations and products, such as The US Green Building Council which has a LEED Certification product to indicate how environmentally friend the building is, as well as WiredScore, which measures office buildings’ internet connectivity and ultimately improve the city’s technology infrastructure.
However, what has not existed in the past has been a standard setting body and product to certify the maintenance and operational quality of apartment buildings. With 67% of millennials who are living in big cities and renting, spending up to 50% of their paychecks on doing so, this has become important now more than ever. Just about everyone cares about building living standards in some way: renters care about the quality of their homes, owners take pride in their buildings and also have a significant amount of capital invested in them, banks want to understand who they are doing business with and who they are lending to, and insurance companies want to make stellar underwriting decisions
In addition, housing consistently tends to be a top priority for elected officials. In order to be a truly unbiased, fair, middle ground for all stakeholders above, we at Rentlogic – a company which rates all NYC residential buildings maintenance quality by grading them using letter grades much like the City grades restaurants– had to rethink what a standards organization looks like in 2018.
The aforementioned standards organizations are all voluntary. Rentlogic, however, is something different; we’re a hybrid of a standards organization and a technology company. The standards that we set are through a combination of city legislation (housing and maintenance code), and feedback from both building owners and residents.
We built the initial standards of what it means to be an A-rated building in New York City by examining the City’s Housing and Maintenance Code, which is available online here. This is based off a number of different pieces of legislature, including the City’s Warranty of Habitability which addresses issues like heat and hot water, mold, bedbugs and other pests and general building safety.
After working with the above stakeholders we realized that parts of the city code are outdated and don’t take into account the many nuances. Our version 2.0 standards are a combination of legislature and feedback, and includes the stamp of approval from landlords, tenants, elected officials and financial institutions.
The general feedback loop for setting standards is explained below:
We wanted to take it a step further, so we formed the Multifamily Operator Standards Assessment & Improvement Council (MOSAIC). This committee currently has 19 stakeholders that represent many different facets of the industry, including representation from the offices of the Mayor and Comptroller and Public Advocates, former City Councilors, landlords, renters, banks, insurance companies and brokerages. MOSAIC is comprised of such noteworthy NYC figures such as Adam Forman, the Chief Policy and Data Officer from the Office of the New York City Comptroller, real estate developer R. Donahue Peebles, Founder, Chairman and CEO of The Peebles Corporation, Juan Herrera, Executive Director of New Amsterdam Design Associates, and Dan Garodnick, former City Council member and current President and CEO, Riverside Park Conservancy.
Our carefully selected board is eager to get engaged and fine tune the grading process for the benefit of all stakeholders.
In this vein Garodnick commented, “In the ever-complicated dynamic of landlords and tenants, Rentlogic highlights common standards that everyone can understand. Bad owners will feel pressure to fix their buildings, while good owners can wear their compliance as a badge of honor. And it is unquestionably helpful for tenants– and prospective tenants – as they decide where they want to live.”
“By pointing to an independent inspection and certification, our leasing team can educate prospective tenants about what we offer and help them feel comfortable about renting with us,” stated Herrera. “Our tenants spend more time at home than anywhere else; deciding where to live is a big life decision. The impartial third-party health and safety certification puts their minds at ease.”
J’Nell Simmons, the CEO of LandlordsNY denotes, “Landlords really do want to comply with law and legislation. Simmons says the organization has thousands of landlords searching the site daily seeking guidance on compliance. “They strive to stay on top of seemingly ever-changing legislation. Rentlogic shows that landlords take pride in their investments and community.”
In the continuing quest for accountability, as CEO of Rentlogic, I do not have a vote on the Board; I am simply there to act as Chair and guide discussions. The Council will convene annually – the first meeting is scheduled for the first quarter of 2019 – to discuss and approve any changes to standards measured by Rentlogic’s grading algorithm, review Rentlogic’s use and characterization of the grading system, and to suggest improvements. We are also actively seeking public feedback and topics for discussion from New Yorkers here: [email protected]
Overall, this will start to change the way incentives work in the real estate industry and provide recognition for landlords who are going above and beyond the call of duty to provide quality housing for their residents.