Rentlogic lands millions to grade NYC real estate for renters and landlords

INSUBCONTINENT EXCLUSIVE:
A company calledRentlogichas raised $2.4 million totake the guesswork out of determining whether that cheap, beautiful New York apartment is
actually a deathtrap wrapped in a brownstone clothing.Renting in New York is murder already, but using Rentlogic, apartment hunters can
figure out if their new housing situation could actually kill them (or put them at significant risk of bodily or property harm… or even
minor inconveniences).Investors in the company seed round include the Urban-X accelerator (which is a partnership between Urban.US and
Mini); Urban.Us, an investor in urban technologies; the millennial-entrepreneur-focused investment firm, Kairos; and Seagram beverage
company scion Edgar Bronfman, Jr.Rentlogic already provides a grade for every building in New York — more than 1 million properties —
but has added an inspection feature that it charges landlords for so that they can display a rating outside of their building
It like the city scoring grades for restaurants in neighborhoods.&We grade every single property in New York,& says Yale Fox, the company
founder and chief executive
&We have inspected 103 properties
Everybody is really happy with it and everybody is going to re-sign and we&re going to start scaling this out to every property in New
York.&Rentlogic scores buildings on a combination of around 150 different variables, including the ability to provide continuous heat and
hot water, and whether or not a building has evidence of bed bugs or rodents.The looks of the building doesn&t matter, Fox says
It more about the conditions of the building.&It the same way a building would get LEED-certified,& says Fox
&It a good way for one landlord to differentiate their property as higher quality than a competitor in the same neighborhood.&Launched
initially in 2013, Rentlogic was born out of Fox own tragic experience as a new renter in New York
The Canadian transplant (and the son of a family of real estate professionals and small scale landlords) had come to the city for a new job
and was looking at an apartment in the West Village.After shelling out a $12,000 deposit for first month rent, last month rent and a
security deposit, Fox settled into his abode in the tree-lined luxury of one of Manhattan most sought-after neighborhoods
The love affair with the building didn&t last long.Unexpectedly, Fox started to become sick
Several visits to the doctor couldn&t identify a cause for his illness, until, finally, his physician suggested a mold-related illness.&I
asked the landlord to fix it and I wound up having to take the landlord to court,& says Fox.By the time the court date arrived, Fox had paid
to fix the mold problem himself and had little in the way of solid evidence to show a judge
So he built an app that would track the public complaints filed against the landlord and the public assessments that had been done on the
building.&I went to court and I showed the judge this model that I had put together and he said, ‘Welcome to New York and I&m sorry this
happened to you… and you should definitely build an app, because New York City needs this.'&Rentlogic founder Yale FoxFox, already
enrolled in the TED Fellows program, built the app, initially called &RentCheck& and began marketing it to landlords and renters
&It was just a hobby because I was so angry about how things had happened to me,& says Fox
&We didn&t want to charge renters fees to the site
We thought having equal access to information could prevent this from happening in the future.&Things continued as a nonprofit for a while
until last year Fox hit on a business model
He designed a ratings card for the building based on the data his company had collected and showed it to his current landlord
&She said, ‘How much would you charge for it'& Fox recalled.Thus RentCheck became Rentlogic and a business was born
Fox charges landlords for assessments and to display a ratings placard that indicates the building grade.Renters are willing to pay up to an
additional $45 per month, according to a white paper, to sign a lease in a building that been independently certified
&People are willing to pay a little bit more just to not deal with the constant headaches that happen in certain kinds of buildings,& he
said.Fox appears to have launched Rentlogic at the right time
The market for housing in New York has softened as luxury apartments flood the market and demand softens, meaning that rents are coming down
across the board.But beyond being more competitive there a defensive aspect to getting rated in a market filled with demanding,
complaint-prone consumers that have no qualms savaging any business, from landlords to local restaurants (although oftentimes the landlords
and restaurants deserve it).&A lot of times landlords are purchasing this because there no way to prove they&re not a one-star landlord,&
Fox says.&This is accessible for big landlords and small landlords
In a zero-transparency and low-accountability marketplace, there no incentive for bad actors to improve their behavior, but with Rentlogic
there is.&The company is already making institutional moves
Fox has inked a deal with Blackstone about providing ratings for their $5.5 billion Stuyvesant Town acquisition on the Lower East Side,
according to Fox
In addition, the company has partnered with a number of real estate brokers and roommate-hunting services like Nooklyn and Roomito use its
ratings.While Rentlogic is scrupulous about using data to train its algorithm, it also transparent about how the algorithm works, according
to Fox.&Algorithms control so much what going on in the world and people just don&t understand them,& he says
So in the interest of full transparency, the company is putting together a building simulator where users can add problems and see how it
affects a building rating on the Rentlogic site
The company also has an algorithmic review committee that reviews the results coming from the building assessments.And while Rentlogic is
starting in New York, the company has plans to use its machine learning system to hoover up publicly available data and provide grades for
real estate across the United States.Ultimately, Fox just wants to help improve the tenant-landlord relationship, he says
&I was in a terrible situation with a landlord who went to jail… I launched this site so no one would have to go through what I went
through.&