New Apps and Services for Renters

March 14, 2016 | By Ronda Kaysen
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Of the many things that make New York renters miserable, hunting for an apartment ranks pretty high. Getting out of a lease early is up there, too.

In the past year, a handful of start-ups have emerged that promise to make the slog to get, or unload, a rental a little less grueling. With cheerful names like Flip, Quo, Symbi and Padspin, these companies offer services meant to trump Craigslist and StreetEasy, the titans of rental apartment listings. These fledglings help renters find homes, break leases, sublet, schedule viewings, find roommates and avoid broker fees.

Depending on the outfit, either the lease holder or the prospective tenant may have to pay a fee, but in some cases, renters can profit from the experience.

Two-thirds of New Yorkers rent, and yet the city has no central listing service. Apartment seekers must cull information from myriad websites, sorting viable listings from bogus ones. Unlike buyers who partner with a real estate broker dedicated to their search, renters tend to juggle multiple brokers, frequently meeting them to get access to an apartment they have found on their own.

For this, renters pay the broker a hefty fee — generally around 15 percent of the annual rent, which for the median rent of roughly $3,400 means a fee of $6,120. A renter looking for a roommate must decide if a total stranger is a sane and safe match. And if a tenant decides to break a lease, the costs can be staggering.

The new services aim to ease the pain. One, Flip, formally started on Friday, offering tenants a novel way to break a lease, an albatross for anyone who unexpectedly needs to move. Thus, it also helps people rent the homes of these departing tenants.

“The space for finding and renting apartments in New York has been so ripe for innovation for so long,” said Ben Killen, 34, a graphic designer who moved into an apartment in Crown Heights, Brooklyn, last month that he found through a test version of Flip. “Flip is one of the first things I’ve come across that has really changed the landscape and really empowered the renter.”

New York State law requires landlords to let you out of your lease    with 30 days’ written notice if you provide a qualified replacement tenant.

A tenant using Flip who wants to break a lease posts a description and photographs of the apartment online. (The company will even send out a photographer.) Once the tenant finds a potential new renter, Flip provides a report detailing the applicant’s credit history, salary and education. The would-be lease-breaker can then approach the landlord with a qualified alternate renter.

In the case of Mr. Killen, the management company dissolved the previous tenant’s lease and offered Mr. Killen a new one for $1,450 a month for the one-bedroom, a $50-a-month increase.

TF Cornerstone, which owns and manages 6,500 rental units in the city, recently began recommending Flip as an option for its tenants, about 1 percent of whom ask to break a lease each year.

“We’re living in a way that’s much more transient,” said Susannah Vila, 30, the chief executive officer of Flip. “We constantly want to be switching neighborhoods, switching houses, switching apartments, but that doesn’t fit the way lease terms exist.”

Steven Sirko and Jessica Rutledge found their apartment in the Washington Heights section of Manhattan through Padspin. (Deidre Schoo for The New York Times)

Breaking a lease can be expensive. A renter can lose a security deposit or be left on the hook for months of remaining rent. Flip offers a marketplace where tenants can free themselves of a lease, sell it or pay somebody to take it over. In one listing, the tenants of a $4,600-a-month West Village one-bedroom asked $550 for the privilege of taking over the apartment. Flip charges the departing tenant $150, or $350 to guarantee the lease will be flipped in two weeks.

To meet that two-week deadline, Flip will professionally clean the place and stage it with decorative vases and lamps and contemporary furniture, if yours is dated. Applicants pay $50 for the credit and background check.

“A lease shouldn’t be a burden, it shouldn’t be a liability,” Ms. Vila said. “It should be an asset.”

Another website, Padspin, which started in January and overhauled its website on Thursday, also helps tenants profit from their unwanted leases. Tenants post their apartments on Padspin, providing a description that is often more colorful than a typical broker’s listing. “I’ve lived in this building for three years and I’ve loved every minute of it,” a listing for a $2,100-a-month one-bedroom on the Upper East Side reads, adding that the Pony Bar and Bar-Coastal are nearby.

If another user of Padspin rents the apartment, Padspin pays the departing tenant a fee based on the rent, starting at $150. Renters pay a fee starting at $300 if they rent an apartment through Padspin. With a click of a mouse, an apartment seeker can sign up for a viewing on a schedule set up by the current tenant. By encouraging renters to post apartments directly, Padspin circumvents traditional brokers, reducing the fee to incoming tenants.

“There is an entire untapped resource, which is current renters,” said Jeff Segal, 35, who founded Padspin with Brandon Beveridge, 34.

Both Padspin and Flip depend on landlords’ agreeing to a plan that their tenants unexpectedly spring on them. A landlord might not be pleased to learn that his or her apartment has been posted online, let alone that the tenant is departing early.

Prospective renters are also at the mercy of the tenant, who could mislead them or the landlord. If the outgoing tenant does not stick to the letter of the law, a new arrival could land in a precarious or illegal arrangement, potentially losing the apartment after he or she moves in. Flip helps smooth the process by providing users with information about their legal rights and offering them guidance about how to speak with the landlord.

Even if the rules are followed, there is no guarantee that the landlord will comply willingly.

“There is a general conservative tendency among landlords,” said Jake Elghanayan, a vice president of TF Cornerstone. “Why give up what you have?”

Although the landlord is required to let a tenant break the lease if the tenant finds a qualified replacement, he or she could claim that the candidate is not up to snuff. In that case the tenant’s recourse would be to take the landlord to court to prove otherwise — or move out and hope the landlord does not come after the remaining rent.

“There are all sorts of machinations that owners come up with to justify” rejecting a replacement, said Bradley S. Silverbush, a partner with the law firm Rosenberg & Estis. “The landlord will find a way to say ‘No.’ ”

But the new sites for renters are hoping that more landlords will be amenable than not, particularly if the departing tenant has done good legwork.

“Some owners welcome an assignment to a creditworthy tenant,” said Sherwin Belkin, a partner at the law firm Belkin Burden Wenig & Goldman.

Donna Grigonis, left, and Sarah Stannard used Quo to locate an apartment in Bedford-Stuyvesant, Brooklyn; they share their quarters with two other roommates. (Deidre Schoo for The New York Times)

Both Padspin and Flip also handle sublets. For Steven Sirko and Jessica Rutledge, both 25, subletting from a tenant who had posted on Padspin was seamless. Ms. Rutledge fell in love with the exposed brick walls and new kitchen finishes of a Washington Heights two-bedroom for $2,200 a month.

These new services might serve a niche, but the relentless forces driving the city’s rental market remain unchanged: Housing is expensive and hard to find. The vacancy rate in Manhattan was about 2.3 percent in October, and the median price for a rental apartment in the borough was $3,391 a month, according to a report by Douglas Elliman. And, brokers say, the rental process is unlikely to change, even with a clever new website design.

“I appreciate the ingenuity, but I haven’t seen many of these companies take hold,” said Gary L. Malin, the president of Citi Habitats, a New York brokerage that specializes in rentals. “Because the system, as it is now, works.”

Even the seemingly draconian broker fees make sense, Mr. Malin said. The broker fee pays for a trained professional supported by a back office staff that files paperwork and vets listings. Despite what many renters believe, “no one’s job is simply opening a door,” he said.

Whether the new companies can grow by charging a fraction of what brokers charge remains to be seen. “The reason nobody has been able to make this work is nobody has been able to make money,” Ms. Vila said.

Joe Charat, the chief executive officer of Naked Apartments, a listings website that was founded in 2010, said, “Since we’ve been around, we’ve seen the graveyard of companies trying to build for the New York City renter.”

But for some New Yorkers, particularly those who are new to the city, figuring out how to navigate the complex and decentralized system can be overwhelming. “Things have gotten worse” in recent years, said Amit Patel, 34, a founder of Quo, a service that began operating in New York in June. “More onerous.”

For $90, Quo users are paired for up to 60 days with what the company calls a “concierge” who serves as part personal assistant, part city guide. New users fill out a questionnaire that asks them about where they work and shop, their hobbies and their interests. Communicating over phone, email and text, the concierge matches them with neighborhoods and schedules viewings of apartments.

“My job is to know about them on a deeper level than just their budget and the number of bedrooms,” said Janine Shea, 28, a Quo concierge.

When Donna Grigonis moved from Cleveland to New York, she did not hesitate to pay for the service. “I did it really quick without really thinking about it,” said Ms. Grigonis, who is 28 and works as a corporate consultant. “I thought it was too good to be true.”

Within minutes of signing up, Ms. Grigonis’s concierge, Jules Malley, educated her on the limits of the $1,200 a month she had budgeted. She would not be able to replicate her Cleveland three-bedroom with two full bathrooms and garage parking in New York.

Ms. Malley, 26, arranged appointments for Ms. Grigonis for the week she arrived in New York in early November, scheduling four or five appointments a day.

Ms. Malley did not accompany Ms. Grigonis to the viewings, since concierges are not licensed to represent clients in real estate transactions.

Ben Killen, at home in Crown Heights, Brooklyn, was an early user of Flip. (Deidre Schoo for The New York Times)

However, users of Quo often end up paying a broker fee anyway, since the apartments that concierges find are often listed by brokerages, which still demand payment.

The business model certainly raises some eyebrows in a market rife with free listings websites. “You don’t need to pay anyone $90 to get a list of apartments,” Mr. Malin said.

But Mr. Patel of Quo said its model works, particularly for newcomers unfamiliar with the city and those too busy to do their own homework. “We’re saving people a lot of time, a lot of stress,” he said, noting that concierges remind customers to bring items like checkbooks and identification to appointments.

Ultimately, Ms. Grigonis assembled three roommates and Ms. Malley directed the group to a four-bedroom, two-bath duplex in Bedford-Stuyvesant, Brooklyn, for $3,800 a month. The group did not pay a broker fee for the apartment because it did not have one.

For many renters, finding a roommate can be more stressful than finding an apartment. And the roommate search affects a large swath of renters. Eleven percent of renters in Manhattan lived with a roommate in 2014, and among Manhattanites between the ages of 25 and 34, that figure jumped to 28 percent, according to data provided by Make Room, an advocacy group for rental housing.

Craigslist has long been the first destination for the roommate search. But anyone can post listings there, making it something of the Wild West of roommate listings.

“You never really know what you’re going to get,” said Lia Wayman, 26, who with Josie Hubschman, also 26, founded the Room Ring, a roommate-finding website that started in October. To reduce the odds that you might encounter an unsavory stranger, you sign up with your Facebook account, and can see only users within your social network, not unlike the dating app Hinge. So your pool of potential roommates is only as wide as your social network, which could be limiting for someone with few (or no) local friends.

“It’s not going to be helpful for everyone,” Ms. Wayman said. The company plans to release a mobile app early next year.

Symbi, another roommate website, has grown to around 10,000 users since it began last January. For no charge, renters can post a detailed personal profile. The site is now testing a premium service that would cost $20 a month and act as a roommate matchmaker, handpicking potential roommates based on their profiles.

“It’s kind of Tinder-esque,” said Samantha Wagner, 23, referring to the dating app. She met her roommate, Emma Bates, on Symbi.

The site hopes to generate revenue by offering users discounts for ancillary services like moving companies; in exchange, those companies pay Symbi a referral fee. But Symbi’s founders recently took full-time jobs at other companies, and now operate the site in their spare time.

“We hoped it would be more profitable,” said Simone Berkower, 28, who founded the site with her fiancé, Peter Kalmakis, 27. Ultimately, “Craigslist is king,” she said.

But even as companies like Symbi struggle to remain viable, apartment seekers continue to use them.

Last summer, Ms. Wagner and Ms. Bates, 22, were both graduating from colleges in Boston and moving to New York. They found each other on Symbi, bonded over coffee at a Boston Starbucks, and then spent three frenetic days in New York looking for an apartment.

The second day ended in tears, but a day later the pair found a two-bedroom walk-up on Hester Street in Little Italy for $2,800 a month. “If we could make it through apartment hunting together,” Ms. Wagner said, “living together was going to be a breeze.”

Correction: December 13, 2015 
An illustration last Sunday with a cover article about services for apartment renters erroneously combined an advertisement for the mobile payments service Apple Pay with a screenshot from the website Flip, a service that helps tenants break their leases. Flip does not accept Apple Pay.

Tags: Wisdom, App