The changing face of renting
Rising home prices have led many Americans to become renters. John Kobs, co-founder and CEO of Apartment List, believes that a growing number of people don’t want to be tied down to a specific place when making career and life choices. Kobs spoke with The Associated Press about the outlook for the U.S. home rental market.
What changes do you expect in the market for rental housing?
High level for us. The next 30 years in the renting economy is going to be very different from the last 30 years. We’ve seen 2 million households with $100,000 income becoming renters. Demand for renting single-family houses has increased by 40 percent since 2000.
The dream of home ownership has kind of been tainted a bit over the last decade with the millions of foreclosures we saw. It’s shifted the mindset of Americans for preserving flexibility.
Why are you thinking in terms of decades, rather than years or quarterly?
This is one of the largest classified categories that hasn’t been won by a startup. We try to skate where the puck is going. For us, when you’re trying to solve pain points for such a large audience, you have to think of decades so that there is a solid foundation to help renters transition for years to come.
How did your business change since your founding in 2011?
There are two chapters of Apartment List. For the first several years, we were primarily focused on building a search program. But because we were working with aggregators, we couldn’t achieve success in terms of listings.
After getting venture funding in 2013, we shifted the business model in 2014 to a two-sided marketplace where we could match tenants and landlords. Now, we have 5 million listings.
It was critical that we were surfacing accurate information directly from landlords.
For us, the supply of listings comes from landlords. Renters are the demand side. Our primary goal is to have a liquid supply of rental listings. Further, our model is such that we’re only paid by landlords when we successfully match the tenants with a home.
What’s the challenge for a business such as yours?
Renters are only in the market for a home every two or three years. Their average duration is 23 months. So how do we stay at top of mind with consumers when they’re not in the home discovery phase? This means finding a way to create a community beyond the transaction.
What trends do you see as shaping the housing market?
Fifty-four percent of workers say they would switch jobs if they had flexible work hours. It continues to underscore how important mobility is becoming for professionals these days.
John Kobs CEO Apartment List