Discrimination in appraisals
Black homeowners say homes valued for less than white neighbors
Abena and Alex Horton wanted to take advantage of low home-refinance rates brought on by the coronavirus crisis. So in June, they took the first step in that process, welcoming a home appraiser into their four-bedroom, four-bath ranch-style house in Jacksonville, Florida.
The Hortons live minutes from the Ortega River, in a predominantly white neighborhood of 1950s homes that tend to sell for $350,000 to $550,000. They had expected their home to appraise for around $450,000, but the appraiser felt differently, assigning a value of $330,000.
Abena Horton, who is Black, suspected discrimination. The couple’s bank agreed the value was off and ordered a second appraisal.
But before the new appraiser could arrive, Horton, a lawyer, began an experiment: She took all family photos off the mantle. Instead, she hung up a series of oil paintings of Alex Horton, who is white, and his grandparents that had been in storage. Books by Zora Neale Hurston and Toni Morrison were taken off the shelves, and holiday photo cards sent by friends were edited so that only those showing white families were left on display.
On the day of the appraisal, Abena Horton took the couple’s 6-year-old son shopping and left Alex Horton at home to answer the door. The new appraiser gave their home a value of $465,000 — a more than 40% increase from the first appraisal.
Race and housing policy have long been intertwined in the country. Black Americans consistently struggle more than their white counterparts to be approved for home loans, and the specter of redlining — a practice that denied mortgages to people of color in certain neighborhoods — continues to drive down home values in Black neighborhoods.
Even in mixed-race and predominantly white neighborhoods, Black homeowners say, their homes are consistently appraised for less than those of their neighbors, hindering their path toward building equity and perpetuating income equality in the United States.
Home appraisers are bound by the Fair Housing Act of 1968 to not discriminate based on race, religion, national origin or gender. Appraisers can lose their license or even face prison time if they are found to produce discriminatory appraisals. Title
XI of the Financial Institutions Reform, Recovery and Enforcement Act, enacted in 1989, also binds appraisers to a standard of unbiased ethics and performance.
After the first appraisal came up short on his house in an affluent, racially mixed suburb of Hartford, Connecticut, Stephen Richmond, an aerospace engineer, took down family photos and posters for Black movies and had a white neighbor stand in for him on a second appraisal. He was hoping to refinance; with the second report, he saw his home’s value go up $40,000 from the initial appraisal just a few weeks earlier.
Horton has filed a complaint with the Department of Housing and Urban Development. When contacted about her case, HUD said it had been assigned to the Jacksonville Human Rights Commission. The agency added that it receives a handful of similar complaints each year.
In 2018, researchers from Gallup and the Brookings Institution published a report on the widespread devaluation of Black-owned property in the United States. The report found that a home in a majority Black neighborhood is likely to be valued for 23% less than a near-identical home in a majority-white neighborhood; it also determined this devaluation costs Black homeowners $156 billion in cumulative losses.