Just Value

Home equity is the platform from which households build wealth. However, discriminatory practices, such as redlining, have led to segregated communities and the systemic suppression of property values in communities of color, resulting in large, growing wealth gaps in the US today.

The Color of Law recognizes that redlining allowed “the government… [to] promote racial segregation through its mortgage insurance requirements...From 1944 to 1962, only 2% of all FHA mortgages were for homes in non-white neighborhoods." But redlining was not the only cause. Other practices, like racial covenants, sought to protect and grow value in majority-white communities, leading to higher home values within those communities today. Mapping Prejudice’s 2023 research finds “in Minneapolis, properties that had covenants are worth [up to] 15% more than identical houses that never had racial restrictions.” This history of racist practices contributes to race-based differences in home value, and persists in the datasets utilized in home valuation today. 

The 2022 federal Action Plan to Advance Property Appraisal and Valuation Equity (PAVE) report recognizes this market phenomenon noting that a history of even slight though widespread undervaluation in communities of color can continue to perpetuate itself as “each instance of a lower purchase price becomes a candidate for the next appraiser to choose as a comparable sale for the next appraisal in the community, carrying the impact of the lower value forward.” 

A race-based understanding of value is internalized in the traditional Sales Comparable Approach (SCA) typically utilized to appraise the value of single-family homes for the purposes of lending and is embedded in today’s algorithmic models that leverage methods similar to the SCA. These practices also survive in today’s datasets, which are replete with inequity, and are embedded in the modern tech stack servicing appraisers and lenders. Thus, BIPOC communities - and their lenders - are locked into systemic undervaluation due to this history that continues to distort data used in appraisals. 

The resulting systemic undervaluation is a root cause of the racial wealth gap. When homeowners of color earn home equity inequitably, it usurps their ability to build wealth, and the magnitude is staggering. The Brookings Institution found that "homes of similar quality in neighborhoods with similar amenities are worth 23% less in majority Black neighborhoods, compared to those with very few or no Black residents," resulting in a cumulative lost wealth of $162 billion in majority Black neighborhoods alone across the United States. This figure increases when all majority non-white urban communities are included. I founded Just Value to not only directly address the root causes of undervaluation but also develop a solution able to meet its scale so that owners of color are able to equitably tap into their home value to make investments such as home repairs, education and health care, launching businesses, or covering expenses that arise with economic hardships.

Just Value is a social impact company combating the systemic undervaluation of homes in communities of color and working to close the housing-led racial wealth gap by providing equitable financial solutions for homeowners of color. Our two-pronged approach combines a new home valuation method and a tailored financial product to address systemic undervaluation in communities of color and enable equitable wealth-building.

1. Restorative Valuation Model (RVM): Our RVM is an algorithmic valuation approach that rectifies inequities in the Sales Comparable Approach used by the mortgage industry. By removing inherent biases in the data and appraisal methods utilized, the RVM provides parcel-level insights using statistical analysis and machine-learning techniques, uncovering previously unrecognized home equity for homeowners in communities of color. The RVM seeks to change the housing industry's understanding of real estate value by recognizing persistent race-based inequity and empowering homeowners to advocate for their property's true value. For the public sector, Just Value offers a robust tool that provides RVM analysis at the neighborhood level accompanied by analytics on housing, finance, and wealth disparities to help guide responsive policy and programs.

Brookings estimates an average undervaluation of $48,000 per home in majority Black neighborhoods across the US. As quoted in the U.S. News and World Report article,“End American Horror Stories by Eliminating Appraisal Bias”, Charu contextualized the economic significance of such undervaluation estimates that “the U.S. worker averaged $44,574 in annual net compensation” in 2012-2016 and “an equitable home appraisal would… be akin to adding one more earner to their household. It also could mean financing a better education, accessing necessary health care or starting a business.” Home equity also appreciates faster than incomes, an average of 6.5% annual growth from 2016-2021 compared 2.8% to 3.5% per year. Thus, increasing home equity can lay the foundation for more robust passive wealth accumulation over the long-term.

2. Restorative Mortgage: Our Restorative Mortgage is designed to unlock the additional home equity identified by the RVM, allowing homeowners to reinvest in their homes and build wealth equitably. In our Boston pilot, we are collaborating with the City and local lenders to develop a product that leverages a home's Restorative Value to expand borrowing capacity for owners in communities of color. This increased access to financing enables the construction of accessory dwelling units (ADUs) for personal or rental use, providing an opportunity to increase home value, generate income, and dismantle a key driver of the racial wealth gap. Other uses include home improvements that address necessary capital improvements, climate adaptation retrofits, and other upgrades.

By deploying our two-pronged solution throughout communities of color, Just Value aims to provide homeowners with an equitable basis for building wealth and correct the market value of homes in these areas. Our technology-driven approach, combining advanced algorithms and machine-learning with responsive financial products, sets us apart in addressing systemic undervaluation that lead to building household wealth, preserving homeownership, and minimizing the harmful effects of gentrification, in order to contribute to closing the racial wealth gap.

Homeowners in communities of color are the chief beneficiaries of Just Value’s solution. Such homeowners are chronically undercapitalized and often are not able to meet the full capital needs of their homes nor to take advantage of wealth-building opportunities due to insufficient home equity. Just Value’s Boston project illustrates the full throughline of our work. A legacy of exclusionary housing and financial practices has segregated Boston (ranking 19th in 2019) and resulted in Latino-owned homes having median values of $473,000 or 14% less than white-owned homes with median values of $735,000 in Boston and Black-owned homes being valued 18% less at a median home value of $461,000. 

These factors prevent non-white homeowners from taking advantage of emerging opportunities in Boston and across the nation as ADU rezonings abound. With ADUs comes the potential to increase a home’s value and earn rental income, particularly in housing constrained markets. However, owners of color often lack sufficient available home equity due to lower value homes to access a loan sufficient to pay for the hefty cost (e.g. $250,000-350,000) of external ADUs. 

Typical white households will tap into their home equity throughout their ownership to fund renovations that preserve and grow the value of their homes and make investments. Often, marginalized owners forego these opportunities or access much more expensive capital (e.g. accruing credit card debt) to do the same thing, leading these families to suffer from persistent and growing wealth gaps. The Federal Reserve of St. Louis has found that “Black families had 24 cents for every $1 of white family wealth, while Hispanic families had 19 cents for every $1.”

Just Value’s solution tackles this problem at its foundation by allowing LMI and of color homeowners to build wealth equitably based on the fair value of their homes as discovered through our RVM. Further, we give owners access to this additional equity - estimated to be $48,000 on average in majority Black neighborhoods - with our Restorative mortgage. In my U.S. News and World Report article,“End American Horror Stories by Eliminating Appraisal Bias”, I contextualized the economic significance of rectifying undervaluation. Because “the U.S. worker averaged $44,574 in annual net compensation” in 2012-2016 and “an equitable home appraisal would… be akin to adding one more earner to their household. It also could mean financing a better education, accessing necessary health care or starting a business.” Home equity also appreciates faster than incomes, an average of 6.5% annual growth from 2016-2021 compared 2.8% to 3.5% per year. Thus, increasing home equity fosters more robust passive wealth accumulation over the long-term.

By providing the financial industry tools that tackle systemic undervaluation, Just Value is using market-based tools to rectify the mis-pricing of homes and delivering that $162+ billion in lost wealth back to LMI, Black, and brown homeowners.

Having grown up in a low-income community of color to parents engaged in real estate investment, I have significant lived experience and understanding of the challenges of financing properties in their neighborhoods. My family has experienced the overt and hidden practices specifically designed to devalue homes owned by people of color. This experience informs my understanding of the myriad ways wealth is usurped from people of color under the guise of standard operating procedure in the real estate industry, and the hardship endured by owners to preserve and maximize their property wealth. I have also experienced the life-changing power of home equity as my parents funded my high school, undergraduate, and graduate education with their home equity. With this education I have gained broad experience in the public and private sectors, as well as in development and financing. I am deeply committed to leveraging my personal and professional experiences to develop system-changing solutions that can meaningfully address the housing-led racial wealth gap. 

Richard Yu, our Head of Data Science, also hails from an immigrant family. Growing up renting an apartment in a low-income neighborhood, he noticed the difference in school quality and extracurricular activities when his family bought a home in a middle-income neighborhood. He credits this superior education with helping him gain entrance to Wesleyan University for his undergraduate degree and Columbia University for graduate school, and being prepared to learn at those institutions. This formative experience has guided his professional life. Richard has consistently chosen professional roles that allow him to work directly with communities and families that have been systemically left behind. At the New York City Economic Development Corporation, where Richard and I first met and collaborated together, he worked to bring services, investment, employment, and economic development to marginalized communities throughout NYC that had not yet benefited from the growth of the City. He went on to work at a charter school, bringing technology and securing facilities for children in underserved neighborhoods. His commitment to addressing the systemic causes of the circumstances he experienced throughout his childhood are a cornerstone of his professional life and drive his work at Just Value. 

Kurt Collins, our Head of Technology, is originally from Grenada. His family immigrated to NYC when he was a child. Kurt and I first met in boarding school - both having left their homes because of poor quality schools in their neighborhoods. As a Black technology developer and entrepreneur, has first hand experience with bias in the tech sector and in the products created by its largely white, male workforce. In response, Kurt founded The Hidden Genius Project, a pioneering mentorship initiative for young Black men that provides technology, entrepreneurship, and leadership training. It has delivered over 772,800 hours of training to more than 9,800 students across the U.S. His work with Just Value is an extension of his commitment to address the challenges his family has encountered in homeownership as well as the tech equity issues he has experienced first hand in the tech industry.

Our RVM has been tested in our pilot cities where we have identified undervaluation in neighborhoods of color with local partners seeking to solve this problem with financial solutions. The RVM has been developed in these local contexts and is capable of producing Restorative Valuations for tens of thousands of homes in Boston and New Orleans. The RVM is now ready to operationalize the base model into a nationally-scalable product that automates our analytic process so that we can easily and quickly provide analysis for new public and private sector clients as they come onboard.

We have also piloted our community engagement processes and tools, such as community partnerships, surveys and direct one-on-one engagement help us better understand local conditions and the specific needs of the communities in which our solutions are being deployed. To date, we have engaged with 12 financial institutions, 4 city and state agencies, 2 universities, 2 housing advocacy organizations, and 1 community developer. We have received granular, actionable insights from residents through 225 survey results (23% response rate) and focus groups with 13 participants. These processes are essential for ground-truthing the large datasets we utilize, aligning the use of our tools to respond to needs of local residents, especially the use of the Restorative Loan, and earning trust with local organizations and lenders. These approaches will be formalized in our community engagement tool which will be a platform from which we would begin a campaign of mutual education between Just Value and community members in collaboration with local partner organizations. 

The Restorative Loan is piloting with a consortium of lenders and agencies in Boston to co-design the ADU loan product and expect to deploy the loan product later this year where we have identified over 2,400 eligible properties in the pilot neighborhood of Mattapan. In New Orleans, we are designing a similar loan product for the Gentilly neighborhood, which is undergoing gentrification. Longtime residents are unable to upgrade their homes sufficiently to respond to increasing weather volatility stemming from climate change or make other necessary capital improvements, putting them at risk of displacement. A loan product that responds to their needs can prevent displacement, improve the safety and comfort of homes, and allow owners to take advantage of the rising value of their homes as the neighborhood gentrifies. Our pilots provide a forum to test and iterate our loan product as well. Recently, we have found a powerful use case where the Restorative Loan can be used to help owners consolidate more expensive debt of LMI and of color homeowners, including credit card debt, auto loans, and payday loans. 

We are also identifying core users in the course of conducting our pilots. Clear interest and use cases for government agencies and Community Development Finance Institutions (CDFIs) in addition to the regional banks have emerged. Our New Orleans pilot indicates community development organizations may be important users of our loan in partnership with housing agencies. 

To date, we have raised $250,000 in non-dilutive grant capital from Robert Wood Johnson Foundation. 

We are applying to Solve because we believe our mission to close the racial wealth gap through equitable home valuation and financing aligns closely with Solve's commitment to driving social impact and advancing racial equity. We believe the opportunity to collaborate with Solve's diverse network of experts and funders would be a transformational and time and cost efficient way to fast track the product and operational learning required to scale our product and realize the impact we seek to create.

While we have made significant strides in developing our Restorative Valuation Model (RVM) and Restorative Mortgage products, we face several key barriers that we hope Solve can help us overcome:

1. Data Access and Partnerships: Accessing high-quality, granular data on historical home valuations, mortgage lending, and neighborhood demographics is critical to refining our RVM and expanding its coverage. We hope Solve can connect us with data providers, government agencies, and research institutions that can help us secure the necessary data through strategic partnerships.

2. Regulatory Navigation: The mortgage industry is closely regulated, and introducing new valuation models and lending products requires careful navigation of complex legal and compliance frameworks. We would benefit from Solve's expertise and network in identifying legal and regulatory experts who can guide us in ensuring our solutions are compliant and aligned with fair housing laws. We also see opportunities to partner with companies that already have this expertise and infrastructure but need advisors to help us structure the right collaborations.

3. Industry Adoption: Encouraging widespread adoption of our RVM and Restorative Mortgage among lenders, appraisers, and housing agencies is essential for achieving systemic impact. However, each user has specific needs and interests. While we have developed a product and go-to-market (GTM( roadmap with these users in mind, we would seek guidance from Solve advisors on refining this roadmap and assessing our priorities to ensure we are approaching market adoption and penetration in ways that will help us gain market traction most efficiently.

4. Scaling Our Impact: As we expand our pilots and aim to bring our solutions to more communities, we will need to build our organizational capacity, refine our go-to-market strategy, deepen our community engagement, and develop a communications and marketing plan that clearly articulates the business and impact opportunity for homeowners and businesses. 

5. Amplifying Our Message: Solving the systemic undervaluation of homes in communities of color requires raising awareness, shifting narratives, and building a movement around equitable home valuation and its role in closing the racial wealth gap. However, it is difficult to prioritize funds to craft the effective messaging for various stakeholders. We would love to work with experts to deepen our community engagement and education, and develop a communications and marketing plan that clearly articulates the business and impact opportunity for homeowners and businesses. 

As a mission-based start-up with limited funds, the resources MIT Solve offers can be transformational as we can tap into expertise and advice that can be difficult to find and challenging to afford at our current stage.

Our solution is innovative for a number of reasons:

Our Restorative Valuation Model (RVM), an alternative algorithmic home valuation model, is innovative because it understands home value in a new, more equitable way. We have developed proprietary methods of understanding value that corrects biases inherent in the data and the traditional sales comparable appraisal approach utilized by the mortgage industry.

At its heart, Just Value’s tools are a financial solution that expands the capital stack available to LMI and of color homeowners whereas most financing for LMI borrowers are focused very narrowly on specific uses, such as acquisitions for first time homebuyers. LMI borrowers typically cannot qualify for home equity loans (HELOCs) due to insufficient income or home equity. In cases where they do qualify, Black and brown borrowers are typically paying higher interest rates and their full home equity is not realized due to market biases. Our Restorative Loan addresses these circumstances because it can stand alone as a HELOC product but can also amplify existing social equity solutions by deepening the capital stack by adding an additional basis for financing - as we are doing in our Boston and New Orleans for ADU construction and climate adaptation retrofits, respectively. 

While our tools are responsive to a variety of common barriers in communities of color, they are designed for scale in lock step with impact. Importantly, our loan product integrates key risk mitigation features, such as a Guarantee Fund, to protect homeowners in case they have trouble paying their loans in times of economic hardship and ensure that lender’s don’t lose their investment. We believe this feature is a critical component in attracting lenders to use this product to meet their CRA obligations and mission-driven investments while also responsiblY increasing the borrowing capacity of Black and brown borrowers.

Our social justice commitment extends to the data science behind our work with a focus on developing models that can be interpreted by practitioners, engaging with communities to correct the inherent imbalance in their data, and forging community-focused transparency reporting for black box models.

Just Value pursues a 2-prong theory of change:

First, to address systemic undervaluation at the household level our RVM and Loan offer homeowners a way to use their full and fair home equity. We harness regulation, municipal programs, and a market-based valuation and lending approach to give individual owners access to the full, fair equity in their homes and allows them to make upgrades to improve the market value of those homes. This approach builds wealth at the household level and offers homeowners options when opportunities (e.g. ADUs, solar panels,e tc) become available. It also offers options to remain in their home and access their growing home equity  during gentrification as an alternative to sale and displacement, enabling them to retain ownership and benefit from rising property values.

Second, when a significant portion of a community takes advantage of Just value’s solution giving owners across an entire community access to financing that recognizes their fair home equity changes the decision set when choosing to sell their homes. Having improved their homes and knowing the Restorative Value, allows owners to demand the Restorative Value when selling their homes, setting a new market price. 

Just Value’s theory of change is to deploy its two-prong solution widely throughout communities of color to not only give homeowners an equitable basis on which to build wealth but also as a mechanism that corrects the market value of homes in communities of color.

We are employing two core types of technology:

1. Traditional methods of gathering data that are not typically used to understand the unique conditions and needs of communities of color:

• Community-centered design: We engage directly with the communities we serve, involving them in the design process to ensure our tech-based solutions are tailored to their specific needs and challenges.
• Community partnerships: By collaborating with local organizations and leaders, we gain valuable insights and build trust within the communities we aim to help.
• Crowd-sourcing data: We gather information from a wide range of sources, including community members themselves, to create a more comprehensive and accurate picture of the issues at hand.

2. Advanced algorithmic modeling and machine learning techniques:

• By leveraging these cutting-edge technologies, we can analyze the data we collect more effectively, identifying patterns and trends that might otherwise go unnoticed.
• Our algorithms and models are designed to detect and correct for systemic biases, ensuring that our solutions are fair and equitable for all communities.

Combining these two types of technology – traditional, community-centered approaches and modern, data-driven techniques – is the key to driving meaningful innovation and solving the complex challenges facing communities of color in the housing industry.

4 full-time staff comprised of 1 data scientist, 1 Head of Data Science, 1 Head of Technology, and 1 CEO who manages fundraising, project management, business development, and strategy

2 years

In our hiring to date, we have found lived experience is a critical component to understanding Just Value’s mission, understanding the market dynamics to which we are responding, and designing the robust, responsive solutions we seek to offer communities and market players. Thus, we seek team members that offer economic and identity diversity that will imbue our thinking with the compassion and insights necessary to build innovative solutions for marginalized communities and provide unique insights into how bias manifests in the housing market, valuation, data, and technology.

Internally, we focus on strong, open, and honest listening and communication, flexibility to respond to individuals needs (e.g. family life, health needs) in the context of a remote-first company with opportunities to gather together. One of our team members has lost his ability to speak due to a medical issue, which our team has easily accommodated. After a rigorous hiring process, we place trust in our team members to offer align solutions to the business and product challenges we encounter.

We are pursuing a SAAS B2B business model.

Banks will use our dashboard, RVM, and Loan products.

Government agencies will largely focus on our dashboard product to guide policy and potentially use the RVM for targeted lending programs that align with their policy initiatives focus on shrinking wealth gaps in their cities. 

Economic development consultants will use our dashboard product to guide analysis and recommendations related to housing, neoghborhood investments, and opportunities to address wealth gaps theough targeted lending programs. 

I apologize for this short and general answer as I am short on time. I hope the other more complete responses in this application are able to provide more detail about our business model.

We have raised $250,000 in non-dilutive grant capital from Robert Wood Johnson Foundation and $17,000 from Ashoka. To fully realize the social impact of Just Value’s approach, our early stage fundraising approach relies on maximizing funding from catalytic capital, such as philanthropic grants and low-cost capital to finance the next stage of development. 

We are currently also pursuing early stage contracts to assess product-market fit and a test our early stage revenue model: 

1. Dashboard Access: Subscription-based access to an analytic dashboard that productizes our analytic pipeline, including RVM results at parcel, neighborhood, and city levels.

2. Consulting Projects: Customized analyses leveraging JV analytic models. Inform our customer discovery and product-market fit research by digging deeply into the needs of target users.

3. CDFIs: Working with CDFI as our first banking partners to utilize the Restorative Loan to fund ADU construction, climate retrofits, and loan consolidation.

Later stage revenue focuses on:

3. RVM API and Transaction Fees: Per-use fees for lenders utilizing RVM in underwriting, scaling with adoption. Facilitated via an RVM API, integrated with valuation software systems.

4. Data Licensing: Recurring access fees or per-use royalties for licensing proprietary dataset developed in communities of color to industry partners. Share revenues with data contributors.

5. Loan Origination Fees: Percentage of loan amount earned for Restorative Mortgages or home equity products originated using RVM.  

By combining these revenue streams, Just Value can generate income in the near-term through dashboard subscriptions and consulting, while building toward larger-scale, transactional revenue as its RVM gains market adoption. This staged approach allows us to validate our model and build partnerships in the early stages.

Our GTM strategy leverages the following approaches:

1. Strategic Partnerships: Engage industry groups (MBA, NFHA, NCRC) in thought leadership to build industry understanding and demonstrate industry support and access member networks. Partner with CDFIs and minority-owned banks to pilot and scale RVM. Work with housing finance agencies to integrate RVM into programs

2. Direct Sales: In addition to digital marketing, build a sales team with expertise in mortgage lending, fair housing, and government relations. Target top 100 mortgage lenders, prioritizing those with CRA obligations and a focus on underserved markets. Conduct outreach to state/city housing agencies in regions with significant undervaluation challenges

3. Thought Leadership: Present at industry conferences (e.g., MBA, CRA & Fair Lending Colloquium) to build awareness and credibility. Publish white papers and case studies demonstrating the impact of the RVM on expanding credit access and reducing the racial wealth gap. Engage with media outlets covering housing finance, fintech, and racial equity issues

4. Pilot Programs: Expand pilots to new cities with innovative lenders and agencies to refine product-market fit. Use results as adoption-driving case studies

5. Channel Partnerships: Integrate with leading mortgage origination, underwriting, and valuation software providers to embed RVM into existing workflows. Develop referral relationships with community orgs and housing counseling agencies to connect with homeowners who could benefit from RVM-enabled financing.