The Startup That Makes Running the Slums Less Attractive

In the past, massive profits and anonymity have attracted exploitative landlords to run slums, but a new startup is trying to change that

Landlords wield all the power in today’s renter market. During the application process, they often demand official forms certifying tenants’ identification, income and background—all while remaining relatively anonymous about themselves.

It is this one-sided lack of transparency that has traditionally provided would-be slumlords a safe haven to rip off renters. For decades, this appeal of easy money has attracted exploitative entrepreneurs to run slums from coast to coast.

It pays to be a slumlord

In his new book reporting on this murky housing market, Harvard professor Matthew Desmond explores just how profitable it is to be a slumlord.

“The profit margins are not small,” Desmond said in a recent article in The Atlantic. “I left, after doing this data analysis, thinking: Why wouldn’t you do it? The profit margins can be quite rewarding.”

Desmond’s book recounts how landlords operate units below code, all while raking in hundreds of thousands of dollars each year. “The ‘hood is good,” says Sherrena Tarver, one of the landlords interviewed for the book. Tarver’s net worth is roughly $2 million and she nets $10,000 a month from the shabby properties she rents.

Desmond’s work highlights an inconvenient truth about the housing market: To date, ignoring tenants’ pleas to fix things like rodent infestations, faulty heaters, and shattered windows has been “quite rewarding.”

Bringing transparency to the housing market

Here in New York City, entrepreneur Ofo Ezeugwu is aware of slumlords profiteering, and he wants to help fix it. During a phone interview, he told me about his Manhattan-based real estate startup, Whose Your Landlord (WYL), which he said, “provides a reviewing platform that allows renters to pinpoint the landlords who are doing a good job, and highlight the ones who are not.”

Now this may not seem like a novel idea. For decades, friends, family and neighbors have profusely criticized subpar apartment owners who were prone to exploit or neglect their renters. However, these crucial insights — where to live and who to rent from — were limited to small, local networks. Here’s where WYL enters the scene. Their technology gives local renters the ability to archive their complaints and prospective renters the power to access these reviews from anywhere in the country.

“We truly believe in the concept that knowledge is power,” Ezeugwu told TechCrunch. “The ability to move word of mouth onto an online platform… is tremendously needed.”

From the dorm room to the boardroom

Ezeugwu and his team created the business in 2012 while they were still students at Temple University. As of early 2016, they have acquired over 78,000 thousand active users across 100+ cities and they are extending nationally. “We have an international presence,” Ezeugwu told The Harlem Times. “But our biggest attraction is coming from the New York, Philadelphia and San Francisco.”

As WYL scales, they hope to help make operating a slum less attractive. By shedding light on landlords’ identity and performance, WYL helps keep potential tenants (and their money) away from inferior properties. The financial incentive has already encouraged additional accountability.

“We have seen landlords look at their reviews online and immediately start improving their space.” Ofo told me. As renter’s money shifts towards more accountable leaders, this new financial incentive just might encourage more landlords to shift away from absenteeism as well.