Black American homeowners are being forced to whitewash their homes just so they can receive a fair price on their appraisals; Forced to take down all photos, hide their black art and pretend no family ever lived there. This is “appraisal discrimination.” and it’s a big problem in America.
What is appraisal discrimination?
Loveland, Ohio family Erica and Aaron Parker put their home up for sale for $525,000. They were ecstatic when they quickly got their first offer for around $500,000, but the happiness soon turns to confusion when they got a call from their Realtor explaining their house was only appraised for $465,000. That was $65,000 less than the Parker’s original listing for the home. They were victims of “appraisal discrimination,” when a home is valued lower than what it’s worth, solely based on the home owner’s race, religion, or sex. The family was outraged and demanded to see a copy of the appraisal. Once received they found it riddled with errors. The appraisal stated the house was built 15 years ago when it was built in 2014. The appraisal also said there were no renovations, but the Parkers had made updates to their home. The family tried to get the appraisal company and the lenders to change the report, they refused. Their only hope was to get another appraisal. The family took all the family photos off the walls, replaced some with photos of their white neighbors, and removed anything that might speak to their blackness. Once, their home was “whitewashed” they proceeded with the second appraisal and the results were heartbreaking.
Amy Goodman, the family’s white realtor, and fair housing officer agreed to take the family’s place at the next appraising just further the illusion that no one black was the house owner. The second appraisal valued the house at $557,000, which was $92,000 higher than the first appraisal and nearly $50,000 higher than the agreed sales price. The Parker family was indeed being discriminated against based on the color of their skin, a problem many Black and Hispanic homeowners are running into far too often.
Researchers at the Urban Institute found that appraisal companies are systematically lowering the value of Black and Hispanic homes. This, coupled with red-lining and redistricting make it more difficult for black families to achieve their wealth goals. It also helps to exacerbate the racial wealth gap that has plagued this country for decades. So what is being done to stop this appraisal discrimination?
What is The Property Appraisal And Valuation Equity Task Force?
Housing and Urban Development have put together a task force called the interagency Property Appraisal Valuation Equity Task Force or PAVE for short. The group, which will be lead by Secretary Marcia Fudge of HUD, former ambassador to the United Nations, Susan Rice, and 20 year HUD staffer Melody Taylor, will try to combat the decades-old issue of “appraisal discrimination.” PAVE will look to set up enforcement against appraisal companies for discrimination, strengthen appraisal practices at the federal and state level, and increase awareness among consumers and industry professionals. President Joe Biden has given the task force six months to research and find solutions before a full report will be shared with the public.
The PAVE Task Force initiatives will be to:
- Ensure that government oversight and industry practice further valuation equity;
- Combat valuation bias through educating the consumer and training the practitioner;
- Ensure equity in valuation by making available high-quality data;
- Create a comprehensive approach to combating valuation bias through enforcement and other efforts.