The White House is acting against racial discrimination in the appraisal of home values.
Announced on Wednesday, the 21-step plan seeks to improve oversight and accountability in the home appraisal business. It includes a legislative proposal to modernize the governance structure of the appraisal industry.
“A home appraisal is a critical element of the home buying and lending process, intended to provide an independent, fair, and objective estimate of the market value of a property so that lenders can accurately evaluate risk,” the Biden administration stated in a release.
“Homeownership is the primary contributor to wealth building for Black and brown households and continues to hold promise for building multigenerational wealth and housing stability for households of color.
“But bias in home valuations limits the ability of Black and brown families to enjoy the financial returns associated with homeownership, thereby contributing to the already sprawling racial wealth gap.”
U.S. Department of Housing and Urban Development [HUD] Secretary Marcia L. Fudge and Domestic Policy Advisor Susan Rice are co-chairs of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE).
On June 1, 2021, the centennial of the Tulsa Race Massacre, President Joe Biden announced the Task Force would establish “a set of actions to root out racial and ethnic bias in home valuations
“It will represent the most wide-ranging set of reforms ever put forward to advance equity in the home appraisal process,” according to the administration.
Administration officials said the median white family holds eight times the wealth of the typical Black family and five times the wealth of the typical Latino family.
According to a recent study by Demos, a public policy organization, and The Institute on Assets and Social Policy (IASP), eliminating racial disparities in the wealth families gain from owning a home would narrow the wealth gap by an additional 16% between Black and white households and an additional 41% between Latino and white households.
The Action Plan details a set of commitments and actions, most of which can be taken using existing federal authorities, which will help every American to have a chance to build generational wealth through homeownership.
A HUD/Consumer Financial Protection Bureau complaint hotline will be expanded, and appraisal bias training in homebuyer education classes will be instituted. In addition, the plan will address whether some computer systems used to value homes perpetuate racial biases.
To view the plan, visit http://www.PAVE.HUD.gov.
