HUD Tackles Historic Racial Inequity In Real Estate Appraisals

By Stacy M. Brown
Senior National Correspondent
@StacyBrownMedia
NNPA Newswire

To address systemic racial disparities in the real estate appraisal profession, the U.S. Department of Housing and Urban Development (HUD) announced today a historic Conciliation Agreement with The Appraisal Foundation (TAF).

TAF, the organization responsible for setting standards and qualifications for real estate appraisers, faced allegations of creating discriminatory barriers that prevent Black individuals and other persons of color from entering the profession, violating the Fair Housing Act.

Recent data from the Bureau of Labor Statistics highlights the stark lack of diversity in the appraisal industry, with 94.7 percent of property appraisers and assessors being white and a mere 0.6 percent being Black, making it the least racially diverse among 800 surveyed occupations. The Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) warns that this homogeneity contributes to the persistent undervaluation of properties in communities of color, further entrenching the racial wealth gap.

Fannie Mae’s 2021 research underscores this issue, revealing that 12.5 percent of appraisals in majority-Black neighborhoods and 15.4 percent in majority-Latino neighborhoods were valued below the contract price, compared to just 7.4 percent in predominantly White neighborhoods.

HUD Acting Secretary Adrianne Todman hailed the agreement as a significant victory in the fight against racial bias in home appraisals. “To eliminate racial and ethnic bias from home appraisals, we must ensure that the industry reflects the diversity of America,” Todman stated.

“This historic agreement will help build a class of appraisers based on merit rather than connections, bringing us closer to eradicating housing discrimination and opening doors of opportunity for all.”

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Under the terms of the Agreement, TAF will establish a $1.22 million scholarship fund to cover costs for aspiring appraisers attending the Practical Applications of Real Estate Appraisal (PAREA) programs. These programs provide an alternative pathway to meet state licensure experience requirements.

Although HUD did not issue findings before the agreement and the deal does not constitute admissions by TAF of any violations, it represents an enforceable resolution to dismantle long-standing barriers and foster greater diversity and equity within the appraisal industry.

Individuals who believe they are victims of housing discrimination can contact HUD at (800) 966-9777 (voice) or (800) 927-9275 (TTY). Additional information is available at HUD’s fair housing website.