Finding the perfect people to share that pricey three bedroom with has been a rite of passage for many New Yorkers, one made a bit simpler with the advent of online forums like Craigslist or SpareRoom.
In recent years, real estate brokers say their work has shifted toward roommate matchmaking. And a few new companies dedicated to professionalizing the hunt — such as Roomi or Roomeze — have grown into a multimillion-dollar industry.
Landlords have even begun to think of their portfolio in terms of bedrooms, rather than apartments. This more parceled outlook should not alarm tenants, however, since experts say it is not expected to dramatically impact the price of pads.
“The building owner benefits by getting a quicker cash flow,” said Avi Baron, an agent with Oxford Property Group, which prices and markets many units by the bedroom. “And the renter gets a great deal, where they pay $1,000 (for a room) instead of $3,000 for a three-bedroom.”
Roomi, a roommate and housing search app, announced its launch in 2015, backed by $2 million in seed funding, according to a news release. The company did not respond to inquiries, but it has been expanding and its founder announced in a blog post last year that it had secured a total of $17 million.
Roomeze, which offers landlords access to a pool of screened tenants for multiroom units, made its debut in 2016, and has seen its network grow to 200 landlords and property managers and 3,000 renters, according to Max Spinelli, head of marketing at the Brooklyn startup. The company expects to add 15,000 rooms — some of which will be newly constructed — to its portfolio in the next year.
And last year, Stoop, which specializes in shorter-term leases in furnished units, began pairing applicants up and helping them find apartments in Manhattan, Brooklyn and Queens. So far, Stoop has placed more than 200 renters in 27 apartment buildings, according to its founder, Zach Ehrlich.
These digital-centric companies were a logical next step after New Yorkers became accustomed to finding roommates on Craigslist, SpareRoom and Facebook, according to Serge Reda, an associate professor of real estate at Fordham University. These startups offer people the chance to peruse several peers who are also looking for roommates and who have typically passed some sort of background check, he said.
“You have access to thousands and thousands of roommates even if you don’t have the best network,” Reda said.
Sanya Malhotra, 21, signed up for Roomeze last week and said its network was a huge plus for her post-college apartment hunting.
“People who are on it mean business. They don’t want to waste your time and it’s efficient,” said Malhotra, who planned to meet with potential roommates she met through Roomeze.
Wei Lin, 29, said she wished roommate finding apps were around when she was hunting for housemates via Craigslist in 2011.
“I like that the apps let you know more about that other person — the more, the better,” said Lin, who now spends more of her time in China, but continues to regularly visit the city.
This desire for more detail is nothing new for brokers, who say their role has evolved to involve more match making because the market has made rooming up a necessity for many New Yorkers. The apps have been helpful in convincing landlords that times have changed — and advertising by the room makes sense.
Many are transitioning away from signing a lease with one person and letting that individual find roommates and toward putting multiple tenants on one lease or entering into individual agreements with each roommate, according to Joe Azar, an associate broker at Citi Habitats.
“Each applicant needs to be sourced, income verification and so forth, so it’s no different from what you have traditionally,” Azar said.
Spinelli said landlords, though initially tepid, got more comfortable with the technology like Roomeze once they saw how much more quickly they could find tenants when working with roommate finding services.
Sugar Hill Capital Partners, for instance, began using Roomeze about two months ago and was so pleased that it plans to expand its partnership with the startup and similar services, according to Joey Lehmann, the firm’s vice president of acquisitions and asset management.
“Everything is fed on a platter for us with roommates that are qualified,” Lehmann said.
Although this model makes it less likely roommates will band together to negotiate rent rates, Reda said the shift is unlikely to significantly impact housing costs. He said prices are much more pegged to how many people are looking at — and competing for — a given number of bedrooms.
“Rents may increase, but I would not expect it to be solely from the effect of the lease/license arbitrage,” Reda said. “I would expect it to be caused more by the force of supply and demand.”