Top educator shines a light on hip-hop’s best bosses, but has she got the facts right?
She just might.
Jay-Z and Will Smith’s latest investment indicates he has a plan that will help poor people to own property through a unique and innovative lease-to-own model. However, a top black academic says she has a “reasonable doubt” about the company, claiming that they are offering a Rags to Riches (ala “Fresh Prince to Bel Aire”) dream that will ultimately exploit those who are currently living. in a “hard blow life”.
Nikole Hannah-Jones, the new Howard University Knight chair in race and journalism, took to social media to explode Landis Technologies, Jay-Z’s Roc Nation and Will’s Dreamers VC home ownership program. Smith, calling him a “predator” by nature.
“Credit counseling is not what will bring low income tenants to landlords, wealth will,” Hannah-Jones tweeted. “All this program does is charge extra fees for people in trouble because they are poor, which all other predatory lenders do.”
However, the CEO of Landis Technologies says she is misinformed about the program in which the two rappers have paid 165 million dollars. Cyril Berdugo said that in defending the initiative, “A lot of the things that have been said are not true”.
“We really care about the financial literacy and financial inclusion of our clients… we are the business that empowers people to own property,” he continued, stating that the firm already had. made the decision never to charge for coaching or consulting or anything like that. “
But is this just a quick cover-up statement to protect the two hip-hop moguls?
According to the website, Landis Technologies’ primary focus is “helping tenants to own property.”
Under the “About” section, a page at the top that says “We’re here to help,” the company outlines their plan.
He explains that Landis allows his “clients to select their dream home and rent it out for up to 2 years while they prepare for a mortgage”, further stating: “We also offer tools and incentives to our customers to improve their credit and build their down payment.
Further down, he indicates that he earns money from the rent paid to them on the dream house “and the appreciation of the house during the rental period”.
“To make sure we’re always on your side, we’re not talking about commissions or fees from our agents. In addition, we never sell your data to anyone, ”the site says. This is probably where the double talk begins for critics like Hannah-Jones, as the company never shares how it will make money on rent.
Traditionally, companies with the “rent-to-buy” payment structure are considered to have what is called a predatory lending practice, believing that they are offering an “unfair or abusive loan or credit sale transaction or practice of lending. recovery ”. The New York State Department of Financial Services considers these programs to be no better than payday loans, title loans, and prepayment prepayment loans, a practice it does not currently allow. It also contains a disclaimer regarding the “Home Equity Programs” and “Rent with Option to Buy” models.
Landis’s website also notes that this program is not in New York City, a state with stricter laws on exploitative hire-purchase models.
Hopefully Berdugo is right, and more conversation needs to take place.