Policies matter: Racial Discrimination in Housing Appraisals

Although redlining was outlawed in 1968 through the Fair Housing Act, many Black Americans find that racial rental and housing discrimination is still alive and well.  (Getty Images)
By Anyla McDonald The Black Lens

Homeownership and entrepreneurship are two common avenues to build generational wealth within Black communities. But, what recourse is there when you play the game correctly, and then the rules suddenly change when it’s your turn to play? Rules that leave you at disadvantage. You cannot cut off a person’s legs and then blame them for not being able to walk.

When Paul Austin and Tenisha Tate Austin got an initial appraisal of their four-bedroom home in Marin City, California, they were quoted at $1,450,000 in 2019. Located near San Francisco, this community was a historically redlined neighborhood. Their home overlooks the San Francisco Bay. There were substantial renovations made to increase the home’s value. In 2020, when the couple wanted to refinance, they sought out an appraiser through their lender. Janette Miller, already knowing that their home had been previously valued at over $1 million, quoted them at nearly $500,000 less than what they had been quoted just two years prior, at $998,000.

Understandably alarmed by the low appraisal, the Austins contested it, arguing that several factors were incorrectly or inappropriately assessed, and that the appraisal was biased due to their race. Persuaded by the Austins’ concerns, the lender agreed to send a different appraiser. This time, the couple took steps to whitewash their home. They removed family photos, artwork, books and other personal effects that could identify them as a Black family. They also arranged for a white friend to greet the appraiser and display their own family photos, posing as the homeowner. With the Austins absent during the inspection, the new appraiser valued the property at $1,482,500, nearly half a million dollars higher than Miller’s quote. While the higher appraisal was a victory of sorts, the fact that they had to erase their identity from the home raises a whole different issue around anti-Blackness in America.

The Austins filed a lawsuit for money they lost while they waited to get a second appraisal. The amounts of appraisal quotes were drastically different. When Black homeowners are shortchanged on properties that would rank at high value when assessing the market and finding similar properties like it, this is the practice of modern redlining.

Ronald Garland is an appraiser who notes that when there are two different values for the same property, the appraisers have used different comps, which are market assessments of properties based on a set of criteria; comps can be skewed by the person doing the appraising. In this case, a house that is valued over $1 million came up short when the owners are Black, which reinforces the power of bias. Even though redlining was outlawed in 1968 through the Fair Housing Act, the Austin’s experience in 2021 show us how the old tricks of racial discrimination are still around.

In response to the housing discrimination faced by the Austins, Miller, the first appraiser, was mandated not to discriminate in the future. Described in the case as an older white woman, she was required to pay an undisclosed amount and attend a training session on the history of segregation and real estate discrimination in the area, provided by the Fair Housing Advocates of Northern California. This included watching a documentary called “Our America: Lowballed” which explores discriminatory practices in the appraisals industry that adversely affect people of color. While there are attempts being made nationally to strip away DEI initiatives and programs, this incident shows why we still need them. The Austins, who also likely had to endure social and emotional stress, also had to become their own advocates, or risk losing wealth.

The Austins’ actions remind us that policies and accountability are important. The work of dismantling discriminatory practices cannot stop, and should not be stopped, even as there are laws designed to prevent it. Vigilance is as important now as it was in 1968.

Dr. Martin Luther King, Jr. once said: “It’s all right to tell a man to lift himself by his own bootstraps, but it is cruel jest to say to a bootless man that he ought to lift himself by his own bootstraps.”

We shouldn’t have to pretend not to exist to have access to the bootstraps that some Americans get without incident. Policies matter.