Joe Biden’s HUD Task Force Issues Report on ‘Racial and Ethnic Bias’ in Housing Appraisals

Joe Biden’s Housing and Urban Development (HUD) has issued a report submitted by its Interagency Task Force on Property Appraisal and Valuation Equity that claims “racial and ethnic bias” in home appraisals for minorities.

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The task force makes the case that racism is embedded in the process of appraising homes for sale in the real estate market. The report says, in part:

A study of appraisal commentary (the free-form narrative section of an appraisal report, reflecting the appraiser’s reasoning for the property valuation opinion) revealed that appraisers sometimes make racial and ethnic references. For example, the study found that one appraiser wrote that a majority-white area was “not especially diverse ethnically,” and another appraiser noted that residents of a “predominantly Hispanic” neighborhood have “assimilated their cultural heritage” into the neighborhood.

A widespread pattern of undervaluation in communities of color can impact an entire neighborhood. Each instance of a lower purchase price becomes a candidate for the next appraiser to choose as a comparable sale for the next appraisal in the community, carrying the impact of the lower value forward.

Over time, even a slight imbalance of undervaluation can have a significant effect on the property values in a community, and hence on the accumulated wealth of homeowners in that community. {snip}

The report names five “task force commitments:”

• Strengthening guardrails against discrimination in all stages of residential valuation.
• Enhancing fair housing/fair lending enforcement and driving accountability in the appraisal industry
• Building a diverse, well-trained and accessible appraiser workforce
• Empowering consumers to take action again bias
• Giving researchers and enforcement agencies better data to study and monitor valuation bias

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