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spotlight innovator

Charu Singh

Humane Works LLC

New York, New York

LinkedIn: Charu Singh

Just Value AVM

Starting Date: 2021-06-01

Innovation Summary

The Just Value AVM is a social-equity focused automated valuation methodology (AVM) that will identify the impact of racial bias in home appraisals inherent in the sales comparison appraisal approach.

The core innovation of the Just Value AVM (JV AVM) is two-fold. First, to provide greater parity in residential valuation by diversifying the data upon which appraisals are based to ensure the intrinsic characteristics of homes are objectively valued.

Second, to galvanize community-scale action in Black communities that assists homeowners in realizing the Recovered Value in their homes through several avenues. JV AVM will model an approach for appraisers and lenders to adjust their methods in order to reduce racial bias in their valuation methodology and integrate greater accountability into the process. JV AVM will also empower homeowners with data to challenge unfair valuations and motivate community groups and local government agencies to work directly with Black communities to assess the Recovered Value for each home in a selected community. In addition, JV AVM will partner with lenders, investors, and NGO’s to offer relevant financial instruments and partner with local construction trade associations and unions to establish a preset menu of commonly required improvements to ease the challenge of home repairs.

questions & answers

What is the geographic reach of your work to date?


Which metropolitan areas (if any) does your work focus on?

Secondary Cities, pilot communities are located in Philadelphia and New Orleans

What is the core idea of your innovation? How does it increase the value of homes in Black communities?

Just Value AVM (JV AVM) relies on 2 core ideas, each catalyzing market transformation that will increase home values in Black communities.

1. Race-based undervaluation in home appraisals is a methodological and data problem, a legacy of racist practices. JV AVM will identify valid approaches and predictive data sets to quantify the racial bias specifically found in the value attributed to the physical or intrinsic characteristics of homes in Black communities.

JV AVM will demonstrate a viable alternative to the traditional appraisal approach, which can be widely adopted by the appraisers, lenders, and investors to reduce bias and increase value. By quantifying the Recovered Value (RV) on a home-by-home basis, the AVM sets the stage for powerful market and non-market action by diverse stakeholders. Social justice and wealth generation initiatives can add the AVM lens to their work to articulate the extent of real estate disinvestment and size equitable investment.

2. To move the RV from the realms of data science and social justice to market transformation requires a building a bridge from mathematical theory to commercial viability, which can be achieved through a 2-pronged approach.

First, harness regulation, municipal programs, and philanthropic supports to change market practices and make available the unbiased equity to owners through no and low-cost capital sources. These interventions can help owners access capital and can impact market practices over time, but change can be slow and uneven. Widespread, accelerated change requires buy-in from capital markets.

Second, access financing to make the higher, unbiased value transactable but the structure must mitigate financers’ risk, such as investing in housing upgrades to buoy the Market Value (MV) to the RV. Although undervaluation is not caused by the home’s physical condition, improving the home is the only locus of control owners have to actively generate greater MV.

Durable market transformation relies on motivating both prongs to build a bridge from the RV to the MV by making opportunities available to entire communities of color and innovating the capital stack (low/no-cost financing, redistribute risk, prioritize owner equity). A targeted community-scale focus can herald a race-based market correction that will establish new MVs that traditional financing will accept over time.

How is your idea new or different from current approaches?

JV AVM offers a new approach to deepen approaches currently underway: The AVM treats undervaluation as a data problem rather than only a race problem. Flawed data in appraisal methods is a legacy of historic and ongoing biased mortgage and valuation practices and must be addressed concurrently with issues of racist policy and practices.

It recognizes that the methodological problems at hand are beyond the ability of individual appraisers to address. Many current solutions focus on human agency in determining value. However, diversifying the appraisal industry will not address bias in the underlying data or methods. In fact, to equitably correct the undervaluation of homes requires complex mathematical approaches that go beyond the typical Sales Comparison Approach (SCA) and beyond the ability of an appraiser. Assigning value with greater precision is a highly developed field using regression analysis and data science.

JV AVM offers a precise solution that targets the specific methodological and mathematical inequities in the appraisal industry. The same tool can also guard against overvaluation when trying to correct for racial bias. It can be modified to respond to the nuances of individual markets and scaled across several communities or across entire Metropolitan Statistical Areas (MSAs) to guide efforts to undo racial injustice. A parity-focused application of the AVM will result in a tool that is locally responsive tool while also being able to scale across geographies.

The majority of efforts currently underway- while worthy of pursuit- focus on the race problem while failing to address the math problem. That is, efforts focus on diversifying and educating the appraiser base, assessing the industry’s governance and standards, improving dispute processes, etc. None of these interventions will actually result in discerning the extent to which individual homes are undervalued due to race, nor provide homeowners a path to access the additional value that has been denied them.

The tremendous depth and breadth of this problem demands solutions that offer scalability to meet the need. Solutions that apply thoughtful data science at a community-scale partnered with organizations, cities, and capital have the ability to mobilize quickly in pilot projects and grow to meet today’s need. JV AVM is a tool conceived and designed to offer such a solution.

What are the primary circumstances that devalue homes in Black communities that you are addressing? What is the impact?

A home valuation derived from the SCA is comprised of 2 sources of value:
– Intrinsic or physical characteristics, such as the number of bedrooms, bathrooms, lot size, age of the home, etc;
– Extrinsic or community characteristics, such as proximity to transit, schools, parks, and job centers, that owners value.

While intrinsic characteristics can be exactly the same in a given majority White or Black neighborhood, amenities differ by neighborhood due to a number of factors – racially discriminatory planning, development, and lending practices chief among them. Appraisers are challenged to establish a fair market price when both intrinsic and extrinsic characteristics differ between an Appraised Property and its comparable properties (comps). The SCA’s solution is to hold the extrinsic characteristics constant by choosing recent sales in the surrounding neighborhood. These comps share similar access to community amenities, thus, normalizing the extrinsic characteristics. Further, the SCA limits the percentage adjustment made to a comp’s sale price to make it more similar to the Appraised Property, making it unreasonable for an appraiser to use comps from a different neighborhood, which would result in large adjustments.

The SCA approach is designed to the abilities of human appraisers (who aren’t able to compute reams of diverse data) but result in systematically maintaining undervaluation, supported by recent findings from Freddie Mac (Sept. 2021). The impact of biased data and methods is an estimated average $48,000 per home and total “$156 billion cumulatively in majority Black neighborhoods,” according to a 2021 Brookings report. While staggering, these figures only measure the current financial impact of undervaluation. They do not capture the associated lost opportunities today nor impacts of segregation and the lack of access to equity for almost a century.

JV AVM addresses the SCA’s systemic shortcomings head-on by:
– Utilizing a larger data set that includes unbiased valuations
– Disaggregating intrinsic and extrinsic data embedded within home valuations
– Extracting the intrinsic value of the physical characteristics for similarly placed homes, regardless of racial community
– Assessing the extrinsic value based on robust community data

What were your “aha” moments (the key insights) that led you to see how your innovation could work?

The spark for me occurred when I recognized that the data and valuation challenges that I encounter in my work at a real estate private equity firm that invests in emerging Asia parallels those underlying equitable valuation in communities of color.

When acquiring assets in emerging Asia, we are often faced with the problem of having no comps against which to value a potential acquisition. As an investor, we are typically investing in land to develop modern logistics warehousing in markets where such a product does not yet exist. In these markets, our approach would be an innovation as we introduce a new product type into areas with no demonstrated demand, leaving us with no comps against which to underwrite our investment. While our investment thesis posits a long-term trend for the demand of modern logistics space, the existing market provides little immediate data to support acquisition prices and rental rate forecasts, leaving us with the perennial problem of how to prove the potential of an acquisition to our investment gatekeepers.

The insights I’ve acquired from solving the valuation challenges we have in Asia has allowed me to understand the valuation challenges in Black communities as one of data, in addition to race, process, and history. When taken from a data perspective, undervaluation in Black communities presents the problem of incomplete information. The typically utilized comps contribute sufficiently to the extrinsic value of an appraised property as they will share the same community amenities but are insufficient in fully describing the value of the intrinsic qualities of a home because of bias embedded in the values of surrounding comps. In this way, the lack of data we encounter in neighborhoods in emerging Asia is similar to the problem of insufficient data in Black US communities.

After recognizing the similarities between these two circumstances – both of which interest me greatly – I have been able to craft a methodology for Black community property valuation based on my emerging Asia experience. Bringing to bear the power of data science approaches allows me to develop a tool that can elucidate at scale the extent and magnitude of undervaluation in Black and other communities of color.

How does your innovation create structural change? What will be different in 5-10 years if you are successful?

Information is power: Racist land policies and real estate practices are an expression of race-based power. In the case of undervaluation, the first step to redistributing power within the industry – including to owners – is understanding the extent of undervaluation on an asset-by-asset basis, not only in aggregate. JV AVM will be designed to provide quantifiable, actionable information on a home-by-home basis in communities around the US. It will have utility to numerous stakeholders beyond the homeowner, including municipalities, community groups, and capital providers.

Catalyze action: The information provided by JV AVM can inspire a diversity of responses, ranging from homeowner empowerment to strive for a Just Value selling price, buyer empowerment to offer a Just Value as part of a personal contribution to rectifying historic injustice, municipal efforts to offer reparations, and lender/investor commitments to help homeowners access the Recovered Value identified in their homes.

In 5-10 years, JV AVM will be deployed throughout the US and form the basis for investment in communities of color in the form of grants or low-cost 2nd mortgages in partnership with community organizations, city agencies, and/or impact/philanthropic capital. In addition, lender’s will deploy JV AVM throughout their portfolios to identify areas of bias and redesign practices to reduce bias in their lending practices. While lenders often use an AVM to check human-led appraisals, the parameters are related to GSE requirements and does not focus on equitable valuation.

Redefine scale and impact for the real estate industry: The challenge of recapitalizing undervalued homes poses a unique challenge not only to the justice movement but also the real estate industry, especially the growing impact investment sector. Typical capital providers focus on “deal size” as a pathway to scaling investment portfolios. The case of undervaluation presents the challenge of small deal sizes but the opportunity to scale at the community-level – small individual investments targeted to entire neighborhoods – to transform value and home conditions for an entire neighborhood. The JV AVM makes such a scale feasible by offering the basis of individual investment.

What is your innovation’s path to (i.e. strategy for) success? What momentum or impact have you achieved thus far?

The strategy for success relies on 3 key areas:

1. Proof of concept: This step involves identifying pilot locations, obtaining the necessary data for these locations, and developing the beta algorithm(s) for these locations. I have identified specific pilot communities within Philadelphia and New Orleans, have partnered with Attom Data ( to contribute the initial data sets for these locations, and have hired a seasoned data science team to develop the JV AVM prototype and a simple user interface.

2. Testing and development: Partner with municipalities and community banks to gain access to relevant data sets and identify additional target communities on which to test and refine the JV AVM prototype. This can include lender valuation data, new proprietary data, and new locations on which to develop and test the AVM.

3. Engage key stakeholders: Develop and deepen relationships with city agencies, community organizations, homeowners, building trade associations, lenders, and impact/philanthropic capital in pilot locations to develop a program for deploying the JV AVM and a financial instrument designed to capitalize the Recovered Value.

Momentum to date: Just Value has secured initial data from Attom Data and hired a team to develop the JV AVM prototype. Preliminary results will be available within 2 weeks and with a protype available in April. We have begun initial engagement with Philadelphia city government and have identified key stakeholder(s) in New Orleans with whom to begin conversations. All conversation to date have been marked with enthusiasm for the concept and interest in collaboration.

Key next steps include securing Attom Data as a continued source of data and/or other data sources, largely a financial commitment. In addition, Just Value seeks to partner with lenders to collaborate using their mortgage valuation data to refine the algorithm, expand its geographic scope, and investigates the interest and limitations on the part of lenders to address racial bias in their valuation practices. In addition, grassroots engagement within Just Value’s pilot communities is essential to realizing our full vision, starting with developing community and municipal partnerships.

What will take your innovation to the next level?

1. Securing one or more data sources over the product development and pilot period is of utmost importance for building the prototype and moving into the testing phase. The initial data has been donated to the effort but long-term access to the existing data and acquisition of additional complimentary data will require funds. In addition, developing a partnership with an organization that produces or collects mortgage valuations would be a tremendous boon to JV AVM. Such a partnership would allow Just Value to work directly with valuations (rather than derivative data, like AVM-produced valuations) and lay the groundwork to develop a financial instrument that could deliver the full, just equity to homeowners in Black communities.

2. Developing the JV AVM prototype is the next critical step. Just Value has engaged a team to develop the JV AVM prototype. The process of producing the prototype has been educational. Among the lessons learned so far are gaining greater clarity about our data needs, the analytic process, and our staffing requirements.

3. Hiring a data science team is vital to being able to move past the prototype stage. Our next stage of growth will rely on accessing and integrating continuous data, refining the methodology, and potentially broadening our geographic scope. We have identified a couple options and are exploring academic partnership, though funding is likely necessary to move forward.

How will you involve others to move your initiative forward?

The twin innovations of JV AVM and a related community action will require collaboration with a number of specialties.

Development of JV AVM requires the continual cultivation of data sources and working with data scientists. Establishing a partnership with a lender to utilize their valuation data would be a beneficial though not mandatory path to refining the tool.

Development of the community-scale investment program that would accompany the JV AVM requires collaboration across the real estate industry, including not just homeowners but also community/civic organizations and/or city agencies, capital sources, and construction trades to develop.

Community and city collaborations are important to not only help us engage, build trust, and increase awareness with homeowners, but aid with designing and administering a program as well. Capital sources, including philanthropic and municipal sources, are required to structure financial instrument(s) that can be made available to the community to fund the Recovered Value and address the risk associated with the difference between the Just Value and the prevailing market value of homes.

Finally, partnerships with local construction trade associations and unions to establish a preset menu of the most commonly required improvements package of work linked to the funding offered to homeowners. Such a program would ease the challenge of home repairs and help homeowners increase the MV of their homes while being able to access the full equity identified by JV AVM. Some cities, such as Philadelphia, are already considering a similar program to address climate-related improvements. Just Value may be able to join and amplify such initiatives.

What is the current composition of your team (types of roles, qualifications, full-time vs. part-time, board members, etc.). How do you plan to evolve the team’s composition as the innovation grows?

Currently, the JV AVM team is comprised of myself and a contracted data science team.

After development of the AVM prototype, our staffing needs will focus on retaining our contracted analytic team or establishing in-house capability to continue to analyze additional data sources and refine the model(s). Over time, this function will move from the current contracted solution to an in-house function.

An additional key position to the team would be a Community Engagement and Partnership specialist who can develop relationships with residents, community organizations, local leaders, and city agencies in the selected pilot location. Just Value will form an advisory committee to provide insight into the unique technical, practical, and ethical challenges at the intersection of justice, community advocacy, race, data, property, and capital markets.

How does your team reflect communities directly impacted by the topic you are addressing? Why are you, your team, or organization dedicated to the issue?

The hiring of a Community Engagement and Partnership team member will focus on identifying individuals in the pilot city and community/communities who are already engaged in community organizing and justice work. Over time, I also hope to employ data scientists originating from marginalized groups. Although finding such professionals has been challenging in this initial stage, it remains a top priority and would be greatly assisted through funding. Impactful race-conscious, justice-focused technology demands practitioners of color who can contribute the nuanced insights gleaned from lived experience.

My dedication to racial justice in the built environment comes from my personal experience as an immigrant. As part of an immigrant family in a small Pennsylvania town, I was made aware of discrimination at a young age. Within my home, discussion of race, power, and opportunity lost were the norm. My early childhood heroes were Mahatma Gandhi, Jesse Jackson, and Mohammed Ali for their conviction and action on behalf of oppressed peoples. I’ve never felt the marginalization and oppression that Black citizens of America experience, but I glimpse it from the racism I have witnessed and experienced. Having grown up in a multi-ethnic Black and immigrant neighborhood, I am familiar with the daily hardship and injustice endured in America by marginalized peoples as well as their tremendous resilience. I will forever seek justice for these communities through the lens of my abilities and experience.

Is there anything else you think we should know about your innovation?


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