Surprise: Black Family's Home Appraisal the Victim of Racial Bias
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Surprise: Black Family's Home Appraisal the Victim of Racial Bias

A Baltimore family was apparently lowballed by more than $300,000 due to their race, lawsuit says.

Death and taxes used to be the only two certainties in life—but no matter how much progress it feels like we’re making sometimes, the sad fact is you can probably slide racism into that list, too. Are we in a moment of uprising that feels like it has the potential to create real, systemic change? Yes. Do people and organizations still show their ass on a daily basis? Oh, most definitely. And to keep tabs on all that ass-showing, we’re pleased to present our semi-regular racism surveillance machine. Stay woke, and keep your head on a swivel out there.

As if the entire housing industry didn't feel like one gigantic scam, a new lawsuit suggests the White-dominated appraisal sector is still undervaluing homes based on race.

According to the New York Times, a Balitmore family found this out the hard way after trying to get a refinance loan on a house they initially paid $450,000 for in 2017. Nathan Connolly and his wife, Shani Mott, made $40,000 worth of renovations and improvements to the home since that time. If you know anything about what's happened to the price of homes in the last five years, you’d expect the value of their house to have increased substantially. The Times and Zillow report that home prices in the city have gone up 42 percent in that time, most definitely putting the more in B’more.

But when the family invited an appraiser from a company called 20/20 Valuations, on behalf of the loanDepot mortgage lender, their appraisal came out to $472,000, much lower than they were expecting. The house in question had books, posters, and family photos that would have made it clear to anybody visiting that the residents of the home were Black. When the couple, both professors at Johns Hopkins University, decided to get a second appraisal and strip all indicators of their race from the home (nice touch: putting a framed American flag in the living room), it came back at $750,000, about a 59 percent increase. In the appraisal world, maybe that's considered a Black tax.

The experiment in appraisal whitewashing—Nathan Connolly is an expert in redlining and systemic racism in his studies—was a success, revealing what many people already know: The game is rigged. The family is now suing the mortgage company and the appraiser.

Accordion to Bureau of Labor Statistics data in the Times story, 97 percent of appraisers in the U.S. are White and the discrimination continues to be so prevalent that the Joe Biden administration has announced reforms to try to rehaul the appraisal business. So far it's mostly a task force to study the issue. According to Freddie Mac, 9.5 percent of Latinos and 8.6 percent of Black applications for appraisals come in lower than the sale price, compared to 6.5 percent for White applicants.

So imagine working hard enough and being successful enough to own a home in America, and still being lied to about what it's worth based on family photos you've got hanging and other indications of your family's racial identity. Even in 2022. It's infuriating, but also, sadly, not even a little bit surprising.