It's tough because people don't exactly look for new houses every single day so coming up in their brain as the app/site of choice when they do need a new house/apt is difficult. I would hate to do a "better apartment finder" startup in this space (airbnb excluded).
I think craigslist grew pretty slowly over the course of a decade, right? Not sure there's a recipe for overtaking them quickly that doesn't involve using their data/userbase in one form or another.
If you did car sales (as a bad example), you could handle the entire process for customers - sending out a photographer, building the listing and researching an appropriate list price. Wear the costs until you have the brand established and can start to make money. That would probably be attractive to people who don't have time or aren't confident enough to do it all themselves.
I disagree that it's easy to take decent photos and then deal with a sales process (fielding calls, negotiating, etc). I have dozens of things I could sell but don't because it's too much effort and I don't have time.
A few months later my whole class, including the instructor, received cease and desist letters from CL. They had found our code on Github and demanded we take it lest we face legal consequences.
So apparently it's quite easy to piss of CL.
Convincing people to put stuff in your closed database just makes it so you will eventually become the incumbent villain. It also creates a legal target, as demonstrated by this story.
Imagine if anyone could download an extension that would scrape a little bit of craigslist, copying that information into a public shared database that wasn't even centrally hosted.