Yale Fox and Don Peebles (Credit: iStock and GLG)
When Yale Fox debuted Rentlogic in 2013, the Canadian transplant wanted to give New York City renters a resource so they never had to rent another terrible apartment from another terrible landlord ever again.
“Policy and enforcement are the best scalable ways to fix social issues,” Fox said during a local 2015 TedTalk event, “but what do you do when the other player on the field is the landlord lobby and they hold all the cards?”
To build more landlord and tenant confidence in the Rentlogic platform, which grades buildings ‘A’ to ‘F’ by plugging city violations data into an algorithm, Fox has put together a diverse board of advisers. The “Multifamily Operating Standards & Assessment Improvement Council,” or MOSAIC, will weigh in on how harshly or leniently RentLogic rates buildings on everything from bedbug sightings to dangerous interior construction citations. “Ultimately we’re building this for both landlords and renters,” Fox said. “We want to sit as a middle ground.”
The board includes condominium developer Don Peebles, DSA Property Group CEO Arik Lifshitz, Nooklyn CEO Harley Courts and BMO Harris banking executive Cynthia Mufarreh. From the world of government, former city councilman Dan Garodnick and officers from the mayor’s, comptroller’s and public advocate’s office will join. The board also includes one tenant activist and organizer, Cea Weaver, of the New York Communities for Change group.
Harley Courts, Cynthia Mufarreh (Credit: Emily Assiran and Twitter)
Although Rentlogic had once explored selling its services to local government as a possible revenue stream, it has since narrowed its business model into something similar to LEED environmental certification: landlords pay monthly fees to display ‘A’ or ‘B’ or even ‘C’ signs in their windows, if they’ve deserved it. Part of the pitch to landlords to pay for certification is that they’ll be able to charge higher rents, Fox said, so RentLogic has recently incorporated more ways for landlords to get extra credit for “good landlord practices,” in a way their previous methods did not account for.
For example, a third-party building inspection can help a building owner show off extensive renovation and repair work and expedite their ascendance to an ‘A’ score. “Most landlords we look at are actually pretty good, and this gives them a way to differentiate themselves,” Fox said.
One thing Rentlogic’s algorithm does not account for, however, is the loss of rent-regulated affordable housing as a result of concerted building improvements. Many New York City landlords capitalize on vacancies — natural or through evictions — to perform extensive renovations, and then permanently increase rent to such an extent that the apartment leaves the rent stabilization system forever. “We could do it. We’ve tried it, we’ve experimented with it. But the conclusion was not to go forward with a feature like that,” Fox said, citing difficulties “painting a clear picture” of what goes on in buildings with publicly available information.
NYCC’s Weaver said she looks forward to working on ways to make the platform more useful for lower-income tenants. “I think the hardest thing to check in the city is displacement, loss of rent stabilization and eviction,” she said. “The garden-variety tenant harassment that occurs every day in New York City is something we have got to figure out a better way to measure.”
Landlord pricing for RentLogic’s building certification is currently about 20 cents per apartment unit per month on average, Fox said. The algorithm used for those certifications will get audited once per year by Cathy O’Neil, mathematician and author of “Weapons of Math Destruction,” a book about how unchecked algorithms deepen patterns of social and economic inequality.
Rentlogic has its letter rankings on the exteriors of 350 New York City buildings, Fox said, with another 500 on a waitlist. Recent client additions include landlord New Holland Residences. Previously, Rentlogic secured a contract with Blackstone at the 11,500-unit Stuyvesant Town-Peter Cooper Village. As of earlier this year, every Stuy Town building had an ‘A’ rating.