A year-long crackdown on Airbnb in New York City has led to an explosion in the underground market for apartment rentals. And a handful of nifty startups are attracting big-name investors in hopes of snapping up properties that comply with the city's new rules.
last fall, The New York City Council imposed Local Law No. 18. It was a strict regulation of home sharing that forced Airbnb to remove most of the tens of thousands of Big Apple rentals it had on its site at the time.
Currently, hosts face onerous registration and The new rules include the onerous requirement that you be home when you have guests, unless the rental period is longer than 30 days.
In response, a patchwork of private invite-only groups with names like “Friendbnb” and “Gypsy Housing NYC” spread across Facebook, Instagram, WhatsApp, and Craigslist. They typically charge through apps like Venmo or Paypal.
The service, called “NYC Short Term Sublets,” focuses on “a midway point for those looking for short- to medium-term stays,” allowing customers to “extend their time for work, theater, film festivals, or other purposes.” “I will be coming to New York for a period of time.” It's just general tourism. ”
The group has amassed 17,300 members on Facebook since April 2023, with 630 posts added in the last month alone.
Meanwhile, in June, the New York-based startup Ohana We rented out 2,000 square feet of loft space at the newly renovated Domino Sugar Factory in Brooklyn.
There, several 20-something employees can be seen hunched over their Macs every day, combing through about 40 social media groups, representing about 60,000 listings, according to a recent count.
Focused on rentals longer than 30 days, Ohana has not hesitated to attract landlords and renters alike from the group on every possible app. Sparks may fly periodically.
“Sorry guys, but this group has been invaded by a lame startup started by Chadians who are paying people to post on the group,” says a WhatsApp group called “NYC Home Sharing.” writes Ricky Belin, founder of .
“If you have posted a product on a site called Ohana, please report it,” he added.
Elsewhere, Craigslist sent Ohana a letter ceasing to solicit host candidates from the advertising site. But CEO Ezra Gershanok said Ohana's investors see it as a badge of honor.
“It's common for companies like mine to extract leads this way,” Gershanok told the Post. “Air B&B [targeted Craigslist listings] Investors love to see it because it's proven to be a successful strategy in the early stages. ”
In June, Ohana raised $3 million from several former Airbnb executives and Spencer Razoff, co-founder of real estate marketplace Zillow. This is in addition to a $1.2 million round from startup accelerator Neo last year.
The cash was used to hire more than half a dozen students and recent graduates who speak Chinese, Hindi and Hebrew, and to persuade landlords and tenants alike, including international students.
Since its founding 18 months ago, Ohana has hired more than 1,200 hosts on Airbnb alone and acquires 500 hosts each month from social media and across the web, Garshanok said. Cleared more than $2 million in rent payments.
Gershanok, 25, worked briefly at McKinsey & Company before founding Ohana with his childhood friend and former Apple engineer Jacob Hulbert, 25.
Their increasingly sophisticated operations are disrupting groups like NYC Home Sharing. Its owner, Belin, calls it “an unofficial solution to the problems that have arisen since these new restrictions were put in place.”
The quickie group was formed in 2021 but has seen a surge in demand since Local Law 18 was enacted, Belin said. WhatsApp limits private groups like his to 1,024 members. Bellin said home sharing in New York City is at capacity, with a waiting list of more than 1,000 people. Recently, he increased his rates by $5 to $25 per month.
In a follow-up email to Post Bellin, Bellin stated that “this group was not founded as a way to circumvent the law,” adding that “the majority of posts actually involve leasing. I guess it's a rental for more than a month,” he added. Acquisitions and annual leases. ”
“Those posting on the platform must comply with local laws,” he added. As for Ohana, Belin said he kicked them out because “they were clearly violating the ethos of the group and a lot of people were complaining about them spamming their accounts.” Ta.
host universityThe service, launched in April 2023 by Northwestern University student Vera Le Sarge, is also trying to capitalize on the disruption with a site dedicated to connecting students with housing.
The Chicago startup received help from a private investment from Edwin Marchal, a former chief technology officer at Intercontinental Exchange (ICE) who now runs a technology-focused fund called Thirteen Castles. and began expanding to New York City.
“We believe local Article 18 and other regulations are positive for our business,” Le Sarge told the Post, adding that hostU is in the process of closing a second round of funding. he added.
Meanwhile, based in Austin, Texas Furnished finderwas founded in 2014 and is now a major player in New York's 30-day plus market.
Last year, private equity firm Summit Partners took a swipe at VRBO's former president, Jeff Hurst, when it acquired a majority stake in VRBO.
Hurst also acknowledged that Furnished Finder's business has skyrocketed in New York City since Local Law 18 was enacted.
“Our growth has doubled the demand and supply of tenants, and we believe they are hosts that were previously only on Airbnb,” Hurst said.
