After kicking off their Knocking Down Housing Barriers initiative approximately one month ago, Knock CRM and OneApp Guarantee are making progress, with the goal of helping 10,000 families find housing. As a performance management platform and customer relationship management company for multifamily property owners, Knock will work with OneApp to raise funds for renters that have previously been denied access to housing due to potential risks perceived by landlords, including current income, rental history, credit scores and a variety of other factors.
According to Tyrone Poole, Founder of OneApp Guarantee, the partnership between the two companies has already helped overturn more than 420 denials in its first month.
“The partnership between OneApp and Knock really originated because it is a perfect partnership in the fact that Knock’s relationship with their customers and the way that they’re involved in their business, really helps us to address the actual problem with access to housing, which we have come to the conclusion at OneApp is risk,” Poole said.
Through the program, OneApp Guarantee acts as a co-signer on leases for people who may not otherwise qualify due to potential risks. The company will then use funds raised by Knock and other members of the multifamily industry to offer renters a payment plan, allowing renters to make smaller, monthly payments until they cover the cost of the OneApp Guarantee downpayment fee. Should a renter default on a payment, the raised funds will cover the difference rather than putting a renter at risk of losing housing.
While the program officially launched in February, Knock began the Knocking Down Housing Barriers program internally in 2021, which enabled the company to raise $26,000 to jumpstart the payment plan. Throughout 2022, the company aims to gain $200,000 through the help of employees, customers, partners and the multifamily industry.
“These are people who are in a situation where the systems are kind of stacked up against them. This is right over the target of the kind of people that really truly need and deserve help, and then in the same way, it helps our customers, too,” said Demetri Themelis, CEO of Knock. “They’re looking for qualified renters who can add value and strengthen the communities that they live in and be good neighbors. These are people who are adding value to our customers, too.”
The pressure to create affordable housing has become even more pressing with vacancies in multifamily properties continuing to lower. As of the fourth quarter of 2021, multifamily vacancy across the United States dropped to just 4.3 percent. At the same time, the average cost of rent has increased by 17.8 percent year-over-year. According to Rent.com, the average rental rate for a one-bedroom apartment in the United States is $1,684 per month.
In larger markets across the West Coast, rental rates can become even more unmanageable. According to Rentcafe, rental rates average $2,563 per month in Los Angeles. In San Francisco, rental rates are even higher at $3,244 per month. Likewise in Seattle, rental rates currently average $2,197 per month.
Because of these high rates, it has become increasingly difficult for Americans to qualify for housing. Those looking to rent can be denied based on a number of factors. However, OneApp Guarantee suggests the most common barriers for people are their current income, credit score, eviction history, debt-to-income ratio and lack of rental history. While a co-signer can help people get around these factors, less than two percent of rental applications are submitted with a co-signer, according to OneApp.
“It is rental history at their last place or debt, previous landlord evictions or financial and rental history make up almost a majority of all deniers. Income is next after that obviously, because a lot of housing providers require three times the rent, which prices people out,” Poole said. “They earn enough. They just can’t meet the criteria of the management company.”
Looking ahead, the partnership hopes to continue making affordable housing a reality for the thousands of denied applicants across the United States. In its former program, OneApp was unable to overturn 80 percent of denials because of applicants who are unable to pay OneApp’s down payment fee. However, through the capital raised in the program, Knock and OneApp to make renting an attainable option.
“Knocking Down Barriers is not just raising capital; Knocking Down Barriers is opening up the way that you look at mitigating risk as an industry… there’s other tools and other ways to mitigate risk where we can rent to vulnerable people without jeopardizing our assets and our profitability,” Themelis said.