HUD Tackles Historic Racial Inequity In Real Estate Appraisals

To address systemic racial disparities in the real estate appraisal profession, the U.S. Department of Housing and Urban Development (HUD) announced today a historic Conciliation Agreement with The Appraisal Foundation (TAF).TAF, the organization responsible for setting standards and qualifications for real estate appraisers, faced allegations of creating discriminatory barriers that prevent Black individuals and other persons of color from entering the profession, violating the Fair Housing Act.Recent data from the Bureau of Labor Statistics highlights the stark lack of diversity in the appraisal industry, with 94.7 percent of property appraisers and assessors being white and a mere 0.6 percent being Black, making it the least racially diverse among 800 surveyed occupations. The Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) warns that this homogeneity contributes to the persistent undervaluation of properties in communities of color, further entrenching the racial wealth gap.Fannie Mae’s 2021 research underscores this issue, revealing that 12.5 percent of appraisals in majority-Black neighborhoods and 15.4 percent in majority-Latino neighborhoods were valued below the contract price, compared to just 7.4 percent in predominantly White neighborhoods.