Rally for fair appraisals.
Happy Wednesday!
There is SO MUCH to write about. So much, in fact, that we could send ten emails a day and still not keep up with the news. But when I saw the story below, I knew I had to share the historical context, and how this discrimination robs communities of not just their generational wealth, but political wealth. Hopefully, it offers more context for what you see unfolding during the protests, and encourage you to analyze how damaging our racial biases can be.
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If you experience or hear of racial bias by appraisers, report them. Use this website to help determine the best course of action by state: https://refermyappraisalcomplaint.asc.gov/.
Subscribe to updates from one fair housing organization in your neighborhood or closest major city nearby.
Reflect: How has your racial bias influenced your perception of the value or worth of a property or location?
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It’s a story you may have seen on your newsfeeds this week: a couple in Jacksonville, Florida, wanted to take advantage of this season’s low home-refinance rates. They hired an appraiser to review their four-bedroom, four-bath ranch-style house. Based on the market prices for their neighborhood, they expected a number around $450,000. So, they were surprised to find the appraiser’s value of $330,000.
The owner, Abena Horton, who is Black, suspected racial bias played a part. So, according to her Facebook post that went viral, organized a second appraisal, but did the following:
"We took down all family pictures containing Black relatives. We took down all pictures of African-American greats that we display to inspire our son. Zora Neale Hurston and Toni Morrison came down from the bookshelves; Shakespeare went up. My son and I took a convenient shopping trip during the appraisal, leaving my white male husband to show the appraiser around, alone."
The house was appraised for $465,000.
As the post gained popularity and was covered by the NYTimes, more Black homeowners shared their stories. This wasn’t an isolated incident; many of these homeowners have removed family photos and had white friends stand-in during appraisals and home sales in hopes to get a fairer price. In the NYTimes, comedian, and actor D.L. Hughley shared that an appraisal he received was so low the bank flagged the report for inaccuracy (NYTimes).
Devaluing property owned by Black people, or preventing ownership at all, is a practice that goes back decades in America. Although there are several issues that have contributed to the lack of land ownership by Black people throughout history, one is particularly relevant to appraisals. In the 1930s, as part of the New Deal, the federal government created a series of initiatives to incentivize home ownership (The Atlantic). As part, surveyors analyzed neighborhoods thorughout the country to identify which were most deserving of support, color-coding them green for “best,” blue for “still desirable,” yellow for “definitely declining” and red for “hazardous. Areas outlined in red, or “redlined” areas, were neighborhoods with predominantly communities of color. Raical biases at the time saw these individuals as untrustworthy for lines of credit, and their communities as unsavorable places to live. As a result, loans in redlined neighborhoods were extremely high or completely unavaialble (Washington Post). From 1934 to 1962, “98% of the Federal Housing Administration Loans went to White Americans” (NBC Chicago). A 1943 brochure encouraged realtors to avoid undesirables such as “madams, bootleggers, gangsters—and ‘a colored man of means who was giving his children a college education and thought they were entitled to live among whites’” (The Atlantic).
These practices “ended” in 1968, when the Fair Housing Act banned racial discrimination in housing, but discriminatory practices are still happening today. These racial perspectives of the value of "redlined" neighborhoods, and homeowners of color, are reflected in how these homes are valued in today's time, with devastating impact.
A study from Brookings Institue puts this into perspective. Their research found that owner-occupied homes in Black neighborhoods are undervalued by $48,000 per home on average, amounting to $156 billion in cumulative losses. The homes in neighborhoods where the population is 50% Black are valued at roughly half the price as homes in communities with no Black residents. And these neighborhoods with greater devaluation are more likely to be segregated than others. They also produce less upward mobility for the Black children who grow up in those communities. This mobility is just a hint at the generational impact of this economic disparity and emphasizes why rebalancing this disparity is so important. Read the full study over at Brookings’ website.
And this devalued property is ripe for gentrification, a topic we covered in an earlier newsletter. Many neighborhoods that are historically non-white will receive an influx of middle-class people, eager for accessible property prices. This is followed by a swift revaluation of the same property, forcing out existing community members or dissuading others from moving in (NPR).
And when economic justice meets social justice, more tensions arise, evident in the destruction of property during protests this summer. After a history of redlining and dispossession, Black people often live in communities where they don’t own any of the property. Lack of homeownership usually means a lack of local agency; landowners are often prioritized in policies made by local government, as they pay the property taxes that influence funding for local utilities. So when police brutality happens, Black people are not just outraged by the violence itself, but the lack of agency to drive political change. Conservatives will argue that communities are so willing to “destroy their own neighborhoods,” but who’s neighborhoods are they, really, if Black people can’t safely walk the streets to enjoy them? This conversation is explored in-depth by Aaron Ross Coleman in an interview with Andre M. Perry, a fellow in the Metropolitan Policy Program at the Brookings Institution, a scholar-in-residence at American University, and the author of Know Your Price: Valuing Black Lives and Property in America’s Black Cities, in Vox.
“As long as black lives matter less than the property that they are surrounded by, you never provide incentives not to burn something down. So when people say, “Don’t burn down the goods, businesses, services in your local neighborhood.” They’re missing the point of why people are protesting. The very fact that you have to say that means that they — the property, the goods, the services, the businesses — are so undervalued that the people around them are not respected.”
Andre M. Perry, a fellow, scholar-in-residence, and author, for Vox.
Housing wealth represents a significant amount of American wealth. In fact, homeowners' median net worth was 80 times larger than renters' median net worth in 2015 (Census.gov). And unsurprisingly, the gap between White and Black homeownership today is larger than it was when housing discrimination was legal (CNBC). And considering the added equity homeownership can bring to shaping neighborhoods as a whole, the right to fair homeownership is necessary to create a more equitable future for us all.
key takeaways
Black homeowners routinely experience lower appraisal values than white homeowners.
The practice of “redlining” historically made homeownership incredibly difficult for non-white communities, and the discrimination from that time still persists.
Homeownership is important for building generational wealth and share of voice in local communities.
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