HUD appraisal task force holds first meeting to address racial bias

Housing and Urban Development Secretary Marcia L. Fudge and Domestic Policy Advisor Ambassador Susan Rice convened the first principal-level meeting for the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) on Thursday.

Rice, former National Security Advisor and U.N. Ambassador in the Obama Administration, serves as co-chair of the interagency group studying inequality in home appraisals, alongside Secretary Fudge.

The task force plans to deliver a final action report to Biden within 180 days to describe the “extent, causes, and consequences of undervaluing of properties.”

The group will make recommendations on measures that could be taken with regard to government oversight to create more equitable practices in home valuations, promising to “create a comprehensive approach to combating valuation bias through enforcement and other efforts.”

Membership includes the secretaries of Agriculture, Labor, Education, Veterans Affairs, the Attorney General and additional members from independent agencies. HUD’s previous regional director for its Mid Atlantic Office of Fair Housing and Equal Opportunity, Melody Taylor, will serve as the task force’s executive director.

PAVE task force members discussed how current appraisal practices are a significant contributor to the disparity seen in housing values.

“The practice of comparing properties within similar neighborhoods can be a proxy for racial demographics, which leads to the perpetuation and exacerbation of the legacy of segregation and redlining,” according to a White House announcement about the meeting. “The group identified near and long-term opportunities to advance equity in home appraisals that will help narrow the racial wealth gap and reinvest in communities that have been historically left behind.”

The meeting comes a little more than a month after Biden addressed disparity issues in housing at a press conference on the centennial anniversary of the Tulsa Race Massacre.

Fewer than half of Black and Hispanic households are homeowners and homeowners of color accumulate less housing wealth than their white counterparts, according to a report from the Urban Institute. Appraiser bias has likely played a role in these homeownership and housing wealth outcomes, and increasing diversity in the field can diminish this bias in the long term.

The home appraisal industry is among the least diverse industries in the country, the report said. Three in four employees in real estate are white, compared with 63% in the private sector, and 89% of all property appraisers and assessors are white while only 2% are Black and 5% are Hispanic.

Disparities in home values mean that Black and Hispanic homeowners accumulate less housing wealth than white homeowners, reducing what can be passed down to future generations. Addressing the lack of diversity in the profession could improve outcomes for Black and Hispanic communities, as studies in other fields such as health care and education have suggested.

The task force has agreed to work and consult with civil rights organizations, advocacy groups, industry, and philanthropic entities to drive change.

“For too many American families, systemic racism and inequality in our economy, laws, and institutions still put the American Dream far out of reach,” Rice said at a press conference in late January. “Today, the average Black family has just one tenth the wealth of the average white family, while the gap between white and Black in homeownership is now larger than it was in 1960.”