By Shakera Moreland
- Landis raised a $165 million funding round with investment from Will Smith, Jay-Z, and Sequoia Capital
- In 2019 57% of African Americans were renters and 26.7% were white
Investors lined up around the block to help Landis, a rent-to-own startup, close its $165 million funding round including business moguls Will Smith and Jay-Z, along with Sequoia Capital. Everyone knows that homeownership is the pinnacle of the American Dream, however the current economy and scorching hot housing market is making it harder to accomplish. With Black homeownership only at 40.6%, the lowest level since the 60s, Landis may be the missing key to buying up the block in the $8.5 billion rent-to-own market.
Why This Matters: In 2019 57% of African Americans were renters and 26.7% were white, so getting cultural trendsetters involved can really help turn around these numbers. Landis purchases a home and rents it out to the future homeowner until they can qualify for a mortgage. Not only are they purchasing the homes, but they are teaching financial literacy at the same time so that future home-owners will have more understanding of how to manage and improve their credit. Traditionally, you need to have a respectable credit score and have enough for a down-payment to secure a loan, unless you are buying a house with cash.
Many people are starting to see the value of rent-to-own properties, making Landis an ideal situation for people. The way it works is that there is essentially a rent-to-own contract between the renter and the owner that states the agreed upon rent will go towards the down payment, and eventually complete purchase of the house.
If this sounds like something of interest to you know please know that there are two options for this type of program; Lease-purchase, which legally binds you to purchasing the home once the lease is up; and a Lease-option, which gives you the option to buy before the lease is up.
Situational Awareness: Homeownership is one of the best researched social determinants of health; having adequate housing has been found to significantly improve health outcomes and decrease medical costs. Unstable housing is associated with youth issues such as increased teen pregnancies, drug use, and depression. More than 25 studies were done to examine the impact of foreclosures on mental health, and each of them noted it could result in an increase in depression, anxiety, drug/alcohol abuse, and even suicide. Any program that would help to close this disparity is definitely one worth supporting.
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