IMPACT
11/09/2018 05:45 EST | Updated 11/09/2018 10:35 EST

Landlords Are Powerful. Here’s A Way Renters Are Regaining Some Control.

Landlords are the wealthiest demographic in the U.S., while tenants often experience hardship. These sites aim to restore some balance to the relationship.

THE ASSOCIATED PRESS
A "for rent" sign outside an apartment building in Sacramento, California. There is often a deep power imbalance between landlords and tenants. A number of ratings sites aim to change that.

The downtown apartment had everything Tony Cellante and his college friends were looking for: plenty of space, a good price and close enough to New York’s nightlife to stumble home.

Just before signing on the line, however, he happened to run into the departing tenant. What followed was a telling account of the “nightmare” landlord: about him entering the unit whenever he liked, regularly removing furniture and frequently adding extra charges onto the rent.

Cellante avoided the apartment but the encounter planted a seed in the back of his mind: “I thought to myself, ‘Shouldn’t everyone just be able to run into the old tenant of the place they want to rent?’”

That was nine years ago, when Cellante was a student at Binghamton University in upstate New York. Soon after graduating, he partnered with a college friend to create the website Review My Landlord. As the name suggests, the online platform invites people to post their views about their landlord or property manager.

Ten years after the financial crisis ― precipitated by the subprime mortgage collapse ― more than 36 percent of U.S. families live in rental housing ― the highest proportion in the last half-century.

As the ranks of renters expand, so too does public attention to the power imbalance between tenants and landlords. A new study by the Washington, D.C.-based Urban Institute, for example, finds that renters experience higher levels of material hardship and are less likely to have emergency savings than their home-owning peers.

Landlords, on the other hand, are among the wealthiest demographic in the U.S. Yet the services they offer all too often leave their clients disgruntled. One recent online study into negative public sentiment puts bad landlords above taxes and adultery.

For Cellante, review websites like his represent an opportunity to even out a market that ― despite anti-discrimination legislation such as the Fair Housing Act ― seems to tip the scales consistently in favor of landlords’ interests.

“There is a big power mismatch in today’s rental market, but it doesn’t have to be that way,” says Cellante, whose website clocks several thousand new reviews every month.

He is not the only one to think that way. Recent years have seen the emergence of a growing number of similar tenant-focused websites, with notable examples including Whose Your LandlordRate My Landlord and Rentlogic.

Giving tenants a greater voice is welcome, of course, but can it really level the U.S. rental market?Hypothetically, yes. Your landlord persistently refuses to fix the leaking toilet, you post a scathing review and the next renter knows to go somewhere else.

Ideally, the outcome is less combative, says Ofo Ezeugwu, founder of Whose Your Landlord. In a perfect world, just the threat of being named and shamed would be enough to persuade landlords to up their game.

Temple University
Ofo Ezeugwu, the founder of Whose Your Landlord, hopes even the threat of being called out publicly will lead landlords to treat renters better.

“At the end of the day, it’s hard to hide something that is out there in the public domain,” Ezeugwu reasons.

While testimonials to this effect litter these sites, perhaps the strongest proof of their impact is the stiff pushback from landlords. Ezeugwu says he has been threatened with lawsuits “hundreds of times” ― a claim echoed by Cellante.

Yet to really reset the power dynamics in the rental market, it takes more than a few disgruntled renters logging on to rant.

When it comes to reviews, volume counts. Whose Your Landlord carries over 12,000 reviews from 225 U.S. cities, but, as with its competitors, the lion’s share of them are focused on the country’s largest metropolises and student towns.

There is a demographic bias as well. The majority of traffic to these review sites comes from digital-savvy millennials. That’s only natural: high prices, student debt and a lack of money for a deposit are among the reasons young adults are far more likely to rent than buy. But, even so, it still leaves other segments looking bare.

These are essentially problems of scale, which can be fixed if and when the habit of rating your landlord really takes off. Other problems are harder to fix, such as the natural bias toward complaining about bad landlords (rather than commending good landlords) and the lack of updated information about landlords between rental periods (tenants typically post after they have given back the keys).

The threat of landlords kicking out tenants who criticize them or even suing them for defamation is also very real, says Eric Goldman, a law professor at Santa Clara University: “Some landlords are thin-skinned, so they react poorly to any public criticism, warranted or not.” 

One way around the limitations of reach and the legal liability of reviewers is to use a more objective system.

This is the tack adopted by Rentlogic, which has developed an algorithm based on publicly available data (typically, complaints to the city housing authority) to rate apartments across New York City.

Rentlogic’s automated system currently grades 1.1 million apartment buildings, with scores between A and F. The worst grades are granted only when a municipal inspector confirms the validity of a renter’s complaint ― an event that usually precipitates a fine as well.  

“This information acts like a verified ‘micro-review’ and so it is user-generated, but there is a higher barrier of entry to place the complaint and it’s further validated by a third-party source,” says Yale Fox, founder of Rentlogic, which successfully completed a recent $2.4 million round of funding.

This move away from the subjective reviews to rely more on existing complaint systems is one that housing authorities ― and tenants associations, in particular ― welcome.

Corianne Scally, a senior researcher at the Urban Institute, expresses a common hesitation about review sites replacing more formal checks against bad landlords.

Her concerns are especially for renters on low incomes. Not only do they often lack either the time to shop around or enough rental options to have a genuine choice, she says, but they are unlikely to use these websites for “the kind of information they need most” ― which, basically, boils down to the cost.

According to the National Low Income Housing Coalition’s latest annual report, someone earning the federal minimum wage would need 2.5 jobs just to afford to rent a modest one-bedroom apartment.

Couple this income-to-rent disconnect with a demand-supply imbalance and you have a market ripe for landlord abuse of low-income renters. Discrimination against holders of government-granted housing vouchers remains commonplace, for instance, with county authorities in cities such as Milwaukee only recently prohibiting such practices.

THE ASSOCIATED PRESS
Tiny houses at a homeless encampment in Seattle. In the absence of legislation to provide incentives for the acceptance of Section 8 vouchers, politicians and advocates have been scrambling to keep up with the surge of unsheltered residents in the state.

“If there is real discrimination going on, then they shouldn’t report it on websites but through the proper legal channels,” Scally adds.

The rejoinder from the sector’s advocates is that an honest review at least means that people can now walk into a new rental with their eyes open. Whose Your Landlord goes a step further, offering tenants advice on practical issues via blogs and podcasts. 

Early next year, the New York City-based site is also preparing to publish guides for tenants on specific neighborhoods in the city. With a view to helping enhance immigrant renters’ rights, these “renters’ commandments” will be published in Russian, Mandarin and Spanish, as well as English.

For Ezeugwu, the Whose Your Landlord founder, the end goal of all landlord rating services is to increase “housing literacy” and generally improve life for both sides ― renter and landlord.

“At the crux of the platform are landlord reviews, but the idea of sharing transparent information is what creates trust,” he says. “And trust is what ultimately builds stronger communities.”

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