Money Moves July 30, 2021 at 03:30 pm

Jay-Z and Will Smith team up to help low-income renters become homeowners, here’s what to know

Abu Mubarik July 30, 2021 at 03:30 pm

July 30, 2021 at 03:30 pm | Money Moves

Jay Z and Will Smith. Photos: Robert Kamau/GC Images, Gregg Deguire/Wireimage

Jay-Z and Will Smith are undoubtedly some of the best entertainers in the world. Aside from entertainment, both of them are engaged in a number of business moves that are bringing in millions of dollars. The two entertainers cum entrepreneurs are making money moves together only that this particular venture is social. The move seeks to make homeownership affordable for low-income homeowners.

In this regard, Jay-Z and Smith are backing a startup firm that is seeking to make homeownership accessible and affordable to the majority of America. Bloomberg reports that Jay-Z’s Roc Nation and Smith’s Dreamers VC recently invested in Landis Technologies, the startup seeking to make affordable homeownership possible.

The company has so far raised $165 million and will use that money to purchase at least 1,000 homes. Landis, founded by Cyril Berdugo and Tom Petit, operates by purchasing a house and renting it out to clients who qualify for a mortgage.

According to Forbes, Landis operates in 29 cities across 11 states, including North Carolina, Maryland, Pennsylvania, and West Virginia, but the company plans to expand its presence to 20 states in 2022.

“What makes Landis unique is our ability to coach anyone to homeownership,” Berdugo said in a press release. “This new funding will allow us to help more Americans on their path to homeownership by expanding to new states, hiring talent nationwide, and providing a better experience to our clients and partner agents and lenders.”

In the U.S, Black people pay more for homeownership than any other group and that has contributed to nearly half of the $130,000 retirement savings gap between Blacks and Whites, according to a new study from the Massachusetts Institute of Technology (MIT).

Blacks pay more for mortgage interest, mortgage insurance, and property taxes than any other group, according to the study. Overall, Blacks pay annual mortgage interest of $743, mortgage insurance of $550, and property taxes of about $390. In total, it amounts to $67,320 in lost retirement savings for Black homeowners when invested over 30 years.

These inequities make it impossible for Black households to build housing wealth at the same rate as White households. Furthermore, the black-white income gap of $25, 8004 is exacerbated by this “black tax” on homeownership, the study said.

According to one study, only 43 percent of African Americans—and 46 percent of Latinos—report living in homes of their own, compared to nearly 73 percent of Whites. It further points out that homeownership attainment in the U.S. remains deeply stratified by race and ethnicity.

“These patterns of stratification reflect enduring challenges that nonwhite households encounter in their pursuit of ownership. The gap is only partially explained by accounting for individual characteristics, including education levels, occupational status, and income, that differ systematically across racial and ethnic groups,” it said.

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