I've talked about the racial disparities in America's suburbs where homes owned by Black families are selling at a fraction of the prices white families in the same neighborhood can garner even here in "racism is a relic of the barbarous past" 2022, but the issue is now so widespread nationally that it requires heavy intervention from the Biden administration in enforcement of HUD and Fair Housing Act rules and regulations.
White homeowners can expect their homes’ values to increase at twice the rate of homeowners of color, a stark confirmation of systemic racial bias in home appraisals, according to a new report.
Despite ongoing accounts of ingrained discrimination over the past two years, researchers exploring racial inequality in the housing market have not had access to appraisals. This changed last week, when, following a directive from the Biden administration, the Federal Housing Finance Agency released 47 million appraisal reports to the public for the first time.
The appraisals, which were compiled between 2013 and 2021, present evidence of a persistent, widespread practice in the home appraisal industry to give higher values to homes when the occupants are white, and devalue them if the owners are people of color.
Analyzing the millions of appraisals by using census tracts as a proxy for neighborhoods and comparing communities with nearly identical housing stock, two researchers found that the results showed a clear correlation: The higher the proportion of white residents in each community, the higher the appraised value of individual homes.
The researchers restricted their study to neighborhoods in metropolitan areas with at least 500,000 people and at least 50,000 residents of color, and ensured that not only did the houses in the compared communities look similar, but residents were of the same socioeconomic status, and amenities like parks, grocery stores and local services such as banks and post offices were on par.
Set side by side, the only discernible differences in the communities was their racial composition, said the researchers, Junia Howell, a visiting assistant professor of sociology at the University of Illinois Chicago, and Elizabeth Korver-Glenn, an assistant professor of sociology at Washington University in St. Louis. Both are respected sociologists who study segregation, housing markets and racial inequality in American cities. The report was jointly published by Washington University in St. Louis and the nonprofit Eruka, which was founded by Dr. Howell.
Inequity within the appraisal system stems from the housing industry’s long legacy of racism, Dr. Howell said. Policies like redlining, a Depression-era practice that kept homeowners of color out of certain neighborhoods, continue to cast a shadow over communities of color and deny their residents of resources.
“The appraisal system is supposed to be our checks and balances, because it’s supposed to show us how much a home is worth. But we’ve created a system that starts with racism, based on who lives in an area,” Dr. Howell said. “And who lives in what area is always connected to our racial hierarchy. So where white people live, those homes are always valued for more.”
In recent years, dozens of homeowners have made allegations of discrimination, trying to prove bias through what is known as the “whitewashing experiment.” Homeowners scrub their property of any signs that Black people are the occupants.
After a white appraiser gave their Baltimore-area house a value of $472,000 last year, Nathan Connolly and his wife, Shani Mott, both professors at Johns Hopkins University, conducted a whitewashing experiment, removing family photos, posters and books from their home and asking a white friend to stand in for them at the door. A second appraiser, unaware a Black family lived in the home, gave the property a value of $750,000.
While many accounts of systematic bias in the appraisal industry have focused on Black homeowners, Dr. Korver-Glenn and Dr. Howell found that the pricing difference was greatest for homes in areas where the population is comprised primarily of other people of color. In 2021, their report says, homes in white neighborhoods were appraised at three times the value of comparable homes in communities where residents were primarily of American Indian, Alaska Native, Southeast Asian and Pacific Islander descent.
On average, homes in neighborhoods where the majority of residents are white are appraised for $371,000 more than in neighborhoods where the majority of residents are people of color, the researchers found. This gap in values has increased 75 percent since 2013.
It's not just a couple of bucks, folks.
It's nearly $400,000.
White wealth in home equity compared to Black wealth for a similar neighborhood, controlled for all other factors, is a one-third of a million dollar tax on non-white homeowners.
If you're white, your home sells for twice the price. There's literally an entire industry enforcing redlining in America through the "free market" and they're all complicit.
But please, white folk, tell me how you're all the victims here, make it about you.
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