One reason few millennials buy homes–if they can manage to afford them–is mobility. If you expect to jump between New York and Boston or L.A. many times for work or love or any other reason, buying an apartment or house doesn’t make financial sense. And people who do own homes often feel stuck in the city where they’ve bought.
A new startup is trying to solve the problem by connecting people for home exchanges in a nationwide housing community. If someone gets a job in another city and wants to move, they can move into another member’s house without actually having to sell their old place.
“We got this idea because we travel a lot,” says Petr Novikov, who cofounded the community, called Restate, with his brother Fedor. “In the last five years, we both lived in five different countries . . . we realized we don’t want to tie ourselves to any particular house. But on the other side, renting is hard.”
On the new site, homeowners can sign up to join the community for free. If they later want to move into another home on the site, they pay a monthly fee of $99. For a short move, it’s a far better deal than selling if the market is bad or if they just moved into the old house. The extra costs of buying and selling, from transfer tax to broker fees, can also add up to tens of thousands of dollars.
People don’t swap houses directly with each other, since it’s unlikely that two homeowners would need to go to each other’s city for exactly the same amount of time. Instead, the site matches multiple people in a chain.
“If I want to move from New York to San Francisco but you want to move to L.A., we then find a person from L.A. who wants to move to New York, and then we do an exchange between three people, or even more people,” says Novikov. “And while you’re in L.A., if my stay in San Francisco is shorter, we’ll find another person who wants to stay in your place.”
The site automatically suggests houses or apartments that are equivalent in value; if you move from an apartment in New York to a house in a small town in Minnesota, where there may not be an equivalent, you’ll be paid a stipend for “downgrading” to a cheaper home. In the opposite direction, homeowners can pay to upgrade to a more expensive market.
Restate provides legal paperwork and vets homeowners–to make sure they actually own the home, among other things–when someone requests a swap. They also think the model provides some security.
“Airbnb already showed that people are okay with letting other people stay in their homes . . . and they’re not giving their own property as security,” says Novikov. “If you’re a member and you [stay in another person’s home], you give your property as a security, so you already have this kind of collateral there.”
In a beta test, the startup says it was quickly able to find matches for people wanting to move, though it’s easiest for those moving between large cities, where there’s the most demand.
At a later point, they want to expand to work with renters. “There are 8 million people, according the census, who rent by choice–they could buy a house but they don’t want to because they think it would limit their future choices of work or lifestyle,” he says. “While we’re starting with homeowners, along the way we’re going to add people who don’t have homes.”
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