Antiracist Technology in the US

Break the Box

Team Leader

Kobla Tetey

Solution Name:

Break the Box

One-line solution summary:

Break the Box is an Opportunity zone fund for Young Minorty professionals that provides an easement in Homeownership and wealth creation

Pitch your solution.

Break the Box is an Opportunity zone fund for young minority professionals that mitigates systematic and psychological barriers into home ownership by providing an easement into equity growth. Our product reduces the 30% home ownership gap between White and black Americans by utilizing opportunity zones. We are targeting young minority professionals in Austin Texas. We purchase homes though the fund and build equity over ten years. While building equity we rent the homes to young minority professionals at below market rent under the agreement that the young professionals will also enroll in a mortgage program to get their own home for no money down and no closing costs within a year. Our goal is a minimum of 65 new AA homeowners per year. In The Us closing the home ownership gap would add 4.5 trillion dollars into the economy, provide health benefits, better schools, and better community with less crime.

Film your elevator pitch.

What specific problem are you solving?

African Americans have the largest disparity in home ownership, since the Fair housing act of 1968, while having less access to capital, obstacles to credit worthiness and difficulties with down payments. African Americans also have more student loan debt than any other ethnicity in the US. These factors make it extremely difficult to get into home ownership including remnants of systematic racism through redlining,zoning and past neighborhood covenants.The inability to use the homeownership tool as an opportunity to build wealth has led to more than 1 in 4 black households having zero or negative net worth and according to "Prosperity Now" the median wealth of African American household will fall to zero by 2053 if current trends continue. Currently there are 3.3 million African American that are mortgage ready but not buying homes. Current Affordable housing models help people move into sustainable housing but doesn't create an avenue for them to grow wealth. Affordable housing typically takes 3 years to build. Our solution works within the current system in spite of zoning issues, nimby-ism, down payment and credit obstacles.

What is your solution?

In Tier 1 We purchase homes outright keeping mortgage low or non-existent in an area where the equity will grow. We sit on that investment for 10 plus years. During the ownership of the home we house 2 minority professionals per year at below market rent and enroll them in a mortgage program so they can purchase their own home with no money down, no closing costs, low interest rates, and no fees. We utilize data collection, with machine learning, to positively impact their behaviors and aggregate data to yield to best solutions for our customers to continue to build wealth. The goal is to put a minimum of 65 young professionals in a home per year in Austin and scale to other cities. In Tier 2 we develop small campuses in the city that house a business on the ground floor and establish affordable housing above. Each campus is focused on a skill that the city needs for example AI. The small businesses housed on a campus would focus on that skill and provide the community with time, monthly, to learn about that industry to help reduce the skills gap. The business lease would make the housing above affordable.

Who does your solution serve, and in what ways will the solution impact their lives?

Our Solution initially serves young minority professionals in between 25-40, Increasing home ownership increases diversity and culture in the city and for employers, increases the talent pipeline, infuses the city with more capital, increases the stability of the community while improving standards of living, health, and schools. Young minority professionals are not being targeted for home ownership. Through our customer discovery interviews we are finding that the knowledge of home ownership and how to successfully enter into that equity class is daunting. The systematic barriers to entry have never been resolved despite the fair housing act of 1968. We consistently ask young minority professional, what are their perceptions of barriers to entry into home ownership and what would make it easier for them to get into home ownership? When in doubt we ask. Overwhelmingly young Professionals are stating that they would use our product and we now have a wait list of individuals waiting take advantage of our product. Our solution provides our Housing apprentices with a way to save money, live in a larger space, prepare for home ownership before owning a home, eliminates down payments and closing costs, keep their interest rate low when traditionally African American with equal credit scores of their white counterparts have a higher interest rate on their loans, and help to create the behaviors, through data collection, that will allow them to continue to build wealth beyond our product. Once we sell the homes in 10 plus years, we also will return a percentage of the profits to our Young minority professionals who used our product and helped us build equity over the years. Thus, creating and equity ecosystem that benefits all stakeholders. We are working to create an app Platform that increases our potential to positively impact Future AA homeowners without the need for the company to acquire more physical assets. This app would be ,similar to Airbnb, a connection between individuals with extra housing space with apprentices working to purchase their own future home. This would improve the amount of new homeowners we create and exponentially improve the housing and wealth gap in the US. Our apprenticeship program would be in place with the use of other homeowners assets. Lastly We are creating a non profit arm of the business to focus and create a course that our apprentices will go through with three specific steps the focus on Awareness and Healing, Homeownership, and building liquidity and wealth. First recognizing past trauma, building awareness and facilitating healing through and assessment of their viewpoints about money and trauma passed down through epigenetics. Once that awareness is achieved we move into acquiring a home as an asset as awareness helps to change habits. Once our apprentices achieve homeownership we teach them how to leverage that asset to build liquidity and grow their wealth to ensure that we create a pathway to generational wealth for future generations. This also help to sustain wealth assets and continue to close the housing and wealth gap for future generations of minorities.

Which dimension of the Challenge does your solution most closely address?

Provide tools and opportunities for equitable access to jobs, credit, and generational wealth creation in communities of color.

Explain how the problem you are addressing, the solution you have designed, and the population you are serving align with the Challenge.

The problem we are addressing is the disparity in Home ownership amongst African Americans in the United States. The solution we have designed creates an equity ecosystem that creates a cyclical solution to the problem. We consider stigmas and the psychology of affordable housing and working within that construct to break it. By using technology along the way we use data to positively affect the behaviors of young minorities as well as iterate ways to help more of the population as the solution is groomed in efficiency and effectiveness. Thus increasing equitable access to generational wealth.

What is your solution’s stage of development?

Pilot: An organization deploying a tested product, service, or business model in at least one community.

In what city, town, or region is your solution team headquartered?

Austin, TX, USA

Explain why you selected this stage of development for your solution.

We are testing this Pilot solution in Austin Texas due to a few factors.

The amount of Diversity in the city or lack there of
The growing cost of housing
The small percentage of African American homeowners
The continual growth of the city
The waning African American Population in the city
The lack of Diversity of corporation in the city despite their goals to reach a better level of diversity
A strong opportunity for communities of color to build substantial wealth here

We are testing our product in the 78744 zip code which is an Opportunity Zone. In Q2 we will have three individuals testing the model and working to create opportunities for 5 more. Once the operation experience is gathered and the model is further validated, we will scale.

Who is the Team Lead for your solution?

Kobla Tetey

https://www.breakthebox.io

Which of the following categories best describes your solution?

A new business model or process that relies on technology to be successful

What makes your solution innovative?

Our solution uses technology with a current solution in a matter that continuously improves the circumstances of the customers. Specifically African American and minority young professionals. It benefits all stakeholders instead of just the wealthy who can use this tax code to continuously bolster their wealth and gentrify the areas it is "attempting" to serve. By using data to positively impact behavior and creating a platform that uses existing "space" in the ownership market we can increase equity for undeserved populations and disprove the scarcity model. We can break the psychological traumas of the past and create new story lines that give a sense of solace and hope. Because we are operating our fund and solution on a smaller scale we can be more nimble, maximize returns, and flex the model depending on the area and circumstance of the potential homeowners. Nothing is off limits as we have been taught to fall in love with the problem not the solution. This allows us the gift of humility and an openness to always look for the best way to help the community grow equity and wealth. Ultimately we are building a wealth ecosystem!

Please select the technologies currently used in your solution:

Artificial Intelligence / Machine Learning
Behavioral Technology
Big Data

Which of the UN Sustainable Development Goals does your solution address?

1. No Poverty
3. Good Health and Well-being
4. Quality Education
8. Decent Work and Economic Growth
9. Industry, Innovation and Infrastructure
10. Reduced Inequality
11. Sustainable Cities and Communities
16. Peace and Justice Strong Institutions

Select the key characteristics of your target population.

Urban
Middle-Income
Minorities & Previously Excluded Populations

In which states / US territories will you be operating within the next year?

Texas

In which states / US territories do you currently operate?

Texas

How many people does your solution currently serve? How many will it serve in one year? In five years?

We have served 4 people to date through our MVP and pilot with 1 apprentice already graduating into homeownerhip. We currently are working to serve a minimum of 65 minority young professionals per year in Austin with a max goal of 1000 in ten years. In five years our goal is 500 new homeowners.

How are you measuring your progress toward your impact goals?

We are measuring our progress through a few key indicators:

Graduating apprentices into homeownership
Young minority professionals on the wait list
Attracted Investments
Public and private partnerships

What type of organization is your solution team?

For-profit, including B-Corp or similar models

How many people work on your solution team?

Full time = 1

Part Time = 4

Advisors = 3

Board Members = 3

How long have you been working on your solution?

3 years

How are you and your team well-positioned to deliver this solution?

All of my Direct team members are young minority professionals who have a viewpoint and experience of walking through the solution we are working to provide. They represent leaders in operations, finance, and technology in their respective fields.

What is your approach to building a diverse, equitable, and inclusive leadership team?

The leadership team at Break the Box represents both the United States and Africa in ethnicity with two women of color and three men of color on the leadership team. The capabilities represent executives from technology, operations, banking and finance. Our number one value and goal is the investment in people. Ultimately we fell that the investment that garners the best return is the investment in one another. We want to showcase, through BTB how investments in people and community net gains that are beneficial to all. It is realized that diversity leads to the best productivity outcomes and high profitability in business. As we continue to grow it is our mission to continue to forge the way with the best talent from diverse backgrounds We plan to achieve these goals by truly tapping into the community via non profit organizations like the Urban League and HBCU's like Hutson Tillotson in Austin to field talent. We have begun to align with local colleges to look for interns to groom talent for the team.

Do you primarily provide products or services directly to individuals, to other organizations, or to the government?

Individual consumers or stakeholders (B2C)

Why are you applying to Solve?

Public and private partnerships will be extremely important to our success. Validating the viability of our solution through the MIT solve team will help to accelerate those partnerships. Using the resources that allow for the ideation of the best ways to execute of our solution is something we look forward to with the Solve team. Lastly helping us build out the data infrastructure to negate bias in the equity industry is a welcome opportunity that we believe the solve team can help us with. Joining the MIT solve team will give further credence that what we are doing is not only the right thing but such institutions as MIT see the value in what we are trying to do to close the homeownership gap in the US. Though we have designed our impact measurement to be easily monitored as we add complexity, via our non profit programing and app platforms, monitoring and evaluation support will be important to our success and growth.

In which of the following areas do you most need partners or support?

Financial (e.g. improving accounting practices, pitching to investors)
Public Relations (e.g. branding/marketing strategy, social and global media)
Monitoring & Evaluation (e.g. collecting/using data, measuring impact)
Technology (e.g. software or hardware, web development/design, data analysis, etc.)

Please explain in more detail here.

Financial- As we raise funds it will be important to show how our solution allows the investor and the community to benefit. this showcase will allow for positive peer pressure that will help to facilitate future investment. Pitching to investors who actually have a vested interest in community will be important. The more we pitch the better. The issues with the housing market have never changed and investment dollars into a solution will be important to begin to change that framework.
We are appealing to two marketplaces. The investor and the young minority professionals that enter our program. Creating a strategy to engage each at the right time without one overwhelming the other is a strategy we need to continue to hone. For example if we have 300 young apprentices ready to move into the program but we haven't raised investor funds to purchase homes to house those apprentices we have a problem. Proper marketing is valuable to the growth of the fund and programming.
As we build out the technological pieces to our company more and more data will come in that will need an infrastructure to store and decipher to validate impact. This is an opportunity as we grow.
We will need help Developing software to grow our product exponentially . Gathering data form the homes our apprentices are in, tracking investor LP dollars, showing the social impact as it moves in real time, and creating the app "space" for the future of BTB is help we need.