Residents accuse co-living startup Bungalow of housing “scam”

Co-living startup Bungalow is being slammed as a “scam” by residents who allege the compay has waged ineffective and neglectful property management tactics.

The company, which launched in New York City in 2018 and rose to become one of the largest co-living operators, is based on a model that signs homeowners to a flexible master lease and matches them with a roommate for a long-term stay.

However, residents claimed to Gothamist their experiences haven’t been so smooth, with property managers abruptly terminating leases, neglecting communication and creating fake roommate profiles. Some have even complained of strangers in their bedrooms, which can’t have locks.

“If you’re considering renting through [Bungalow], I would say run as fast as possible,” a San Francisco renter through the company told the outlet. “This is not properly functioning property management.”

The report comes as complaints against management of co-living companies rise in the city. New York Attorney General Letitia James’ office, who told Gothamist the companies are being “monitored.”

Some operators could be running afoul of the laws against renting out individual rooms. The companies aren’t facing consequences if they’re breaking those rules, industry experts told Gothamist, because law enforcement would have to witness violations to spur action.

Bungalow claimed it was not violating the individual apartment law, even though leases appear to show tenants agreeing to the “exclusive use of bedrooms.”

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Bungalow last year secured $75 million in Series C funding, doubling the company’s total funding to more than $150 million as it eyed expanding into the Sun Belt.

Estimates put the number of co-living residents in New York City around 25,000. The industry has faced some challenging headwinds during the pandemic, as people lost interest in shared common spaces.

Bungalow isn’t the only company at the center of allegations by its residents. A few months ago, Common was hit with allegations of lousy maintenance, poor security and surprise roommates. Chief executive Brad Hargreaves said the company doubled its support teams to increase response time, but also deflected some blame for rising tensions in residences towards work-from-home patterns.

— Holden Walter-Warner