Renters can take back control with this new Yelp for landlords in NYC (Yahoo! Finance)
The rental market is on the rise. With 36% of US households deciding to rent in 2015, this makes it the largest share since the late 1960’s. Although the spike in multifamily units continues to drive the housing recovery, the high demand and low supply for affordable housing give landlords and rental companies the upper hand.
With his company Rentlogic Yale Fox set out to even the playing field. The CEO wanted to create a Yelp for landlords after having a bad experience dealing with the once successful businessman, Steven Croman.
Croman, like many landlords in New York City and other urban areas, found loopholes around maintaining rent stabilized apartments and managed to displace hundreds of thousands of families. Earlier this year he was charged with 20 counts of felonies relating to corrupt business practices.
“Not all landlords are a nightmare,” says Fox, “but we wanted to create a way that circumvents policy and enables housing enforcement to be powered by the crowd and technology.”
Similar to the restaurant grading system in New York, Rentlogic’s algorithm analyses hundreds of factors to generate a letter grade for apartment buildings and landlords. They range from A to F, and are based on the public information provided by city data. Rentlogic collects about 40% of its information from 311 complaints, buildings department or housing preservation development violations; the rest is gotten from Freedom of Information requests to various city agencies.
Fox and his team have collaborated with the Mayor’s office, the attorney general, nonprofit housing organizations and everyday people in an effort to shift the scale of power away from building owners and landlords and into tenants’ hands.
“Landlord negligence costs the city at least $750 billion a year,” says Fox. “This includes the money that it costs for the city to verify every single complaint. The data is already out there so why not collect that information, simplify it, and put it into the hands of the taxpayers when they need it most.”
How does it work?
Once you type an address into the Rentlogic site, the free data goes back seven years and the badges on the page indicate what kinds of violations the building has had and how long ago they occurred. The site provides grades for 1.1 million residential buildings, 300,000 of which have had one or more rental listings advertised online in the last five years.
Some of the badges that are commonly seen are bed bugs, heat and hot water problems, rodents, electrical problems and more. Also included on the site is the “raw data” which details every complaint called into 311, even if they were dismissed and not marked as a violation.
Fox says “vacancies are bad for business,” and his hope is that if the public knows how bad these F landlords really are before signing a lease, it should provide an incentive for landlords to improve their housing conditions.
Rentlogic was founded in 2013 in New York. Even though it’s only available there for now, Fox also works closely with Toronto to improve its housing issues. In February, Fox partnered with ACORN Canada to launch a “Landlord watch list,” naming the top 100 worst landlords in the city. Fox and his colleagues along with ACORN, FMTA, and Councillor Josh Matlow continue working closely with Toronto officials to pass a new licensing regime for landlords.
“We have been actively involved in working with the City of Toronto to get this grading system approved,” says Fox. “If it passes, it will require every building to display its letter grade in the front entrance.”
Although Fox explains that the likeliness of a policy like this passing in New York will take years, he’s determined to make it happen and the launch of Rentlogic is the start.
The data provided on Rentlogic is free for the public and Fox tells Yahoo Finance it will always remain free. “You can use any other site or a broker to find an apartment, but before you sign a lease, come to our site and check the grade,” says Fox. “This is the only way we will start to shift the needle and put the power back into the hands of the renters.”