After 21 years as a residential appraiser, Sanedria Potter still receives incredulous looks when she shows up at a home to do her job.
“You are the expert? she is asked.
Potter smiled to herself, realizing that she was an anomaly in her industry. Ninety-eight percent of home appraisers are white, according to the Bureau of Labor Statistics.
When it comes to Potter, the industry’s lack of people of color is at the very root of the home valuation bias, which a Brookings Institution report said last year created a $23 devaluation. % of homes in black neighborhoods, totaling $156 billion. in lost equity.
“I have no doubt biased appraisals happen because there are bad apples in every industry,” said Potter, who appraises homes in the Atlanta area. “There are a lot of reforms to be made, that’s for sure.”
The White House and the Department of Housing and Urban Development have heard startling stories that black homes have been undervalued by up to $500,000 and black homeowners have been encouraged to remove family photos or ethnic wall art to “neutralize” homes to make them more marketable to potential non-black buyers.
The Biden administration “decided that it was going to take on this challenge, and it’s a tall order,” HUD Secretary Marcia Fudge said last week when announcing the Property Appraisal Valuation Equity report, or PAVE, the result of a Task Force Chairman Joe Biden kicked off the centennial of the 1921 race massacre in Tulsa, Oklahoma, when white mobs destroyed and burned homes and businesses in the thriving all-black community of Greenwood.
Last month, the Washington Post reported the home of a black couple in a wealthy, majority-black community in Maryland that was appraised for half a million dollars less than expected and $300,000 less than they had originally paid for the house six years prior. Another black family, in Marin County, California, sued an appraiser in federal court after their home was appraised at $100,000 more than they paid – after spending $400,000 on renovations. A second appraisal valued their home at $500,000 more than the original appraisal after the couple removed any hints they were black and asked their white friends to impersonate the sellers.
Such stories, showing disparities even at the upper ends of the housing market, illustrate the bias that has damaged generational wealth opportunities for Black families.
The PAVE report and Brookings research confirmed that homes in majority black and majority Latino neighborhoods are nearly twice as likely to be undervalued as homes in other neighborhoods. Because of this, black and Latino homeowners often pay more for mortgages, get less when they sell their homes, and struggle to get home equity loans, which equates to estimated losses of $48,000. per house.
The PAVE Action Plan, which would be implemented by a collection of organizations in the housing and real estate sectors, calls for the empowerment of home appraisers to make the industry more diverse and inclusive, provide more information and assistance to landlords and encourage landlords to report any instances of perceived bias. A group of black housing and real estate leaders and landlords met with Fudge last week at HUD headquarters in Washington to begin crafting methods to create change.
Lydia Pope, president of the National Association of Real Estate Brokers, which produced the recent report on the state of housing in black America, which found similar findings to those of PAVE and Brookings, said: “The devaluation of the ownership and ownership by black people has historically been a challenge for us. When you appraise properties, you understand neighborhoods. But if you don’t know the neighborhood, you don’t understand it, it’s more to the assessments that are obvious. So a major issue is that we definitely need to hire more black evaluators.
What exactly are Potter’s thoughts. Since her son Jaelen was 8 years old, she took him to her works, and he gradually learned the trade. Today, at 20, he is one of Georgia’s youngest licensed appraisers.
“We are underrepresented in the assessment, like every other industry in this country,” she said. “I’m glad the Biden administration is taking a comprehensive approach. But in all of this, we need to increase the numbers.
To that end, Potter not only trained her son, but she also, for years, mentored young black people in assessment, sending them through a two-year apprenticeship that she funds, she said. . After the apprenticeship, they can become certified appraisers.
“My phone rings regularly, because people have heard horror stories, and sometimes they want a black reviewer to feel more comfortable,” she said. “Plus, every week, I get a call from a bright young person who is passionate about this industry and can’t find a mentor. Or if they pass the hurdle of getting a degree, they can’t pass the second hurdle, which is finding a certified appraiser to work with for two years. So it’s a difficult situation. »
The rules allow Potter to take no more than three candidates under his guardianship at a time. And in a bustling Atlanta-area market, she is one of the few, if not the only, certified appraisers working deliberately to diversify the industry by training more black appraisers.
“Appraisers are humans who view location as a factor in accessing properties,” said real estate agent Gayle Bickham, who works primarily south of Hartsfield-Jackson Atlanta International Airport. “Yeah, a lot of it comes down to race when you see those stark differences in price. But also, it is a question of location. A brand new home worth, say, $400,000 in South Fulton [County], in a predominantly black community, could sell for $515,000 north of town, where there aren’t as many black people. And we’re talking about the same house, same builder, same square footage. One of the big problems therefore goes beyond the evaluator. It’s about how our communities are devalued.
Andre W. Perry, Senior Fellow at Brookings, wrote in his book “Know Your Price: Valuing Black Lives and the Property in America’s Black Cities”: “When you really think about it, many comparisons between blacks and whites are consciously or subconsciously asking these questions: Why can’t you be more white? for decades? Why can’t you succeed academically like white people?
“When white people are seen as the norm or the standard, everyone else is seen as abnormal,” he continued. “There are certainly a lot of black people who know they have value. … By taking racism into account, researchers can better examine the true value of the house. …Communities need researchers … so that leaders and families can challenge governments and markets that devalue us, dehumanize us, and belittle us for economic gain.
Pope said the meeting at HUD allowed attendees, including black homeowners, to share their experiences with valuation bias to understand the extent of the problem and the path forward to ending property devaluation. black property.
“It was very interesting to hear what’s going on around the table,” Pope said. “It’s a conversation that’s being heard and taken seriously by people who want to make change, create major solutions that we can put in place about all of this disparity on the ratings. It’s not going to be necessarily easy. But the commitment is there.”
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