New Program Targets Home Appraisal Bias

“There has never been any formal overseer for appraisers, so they built systems the way it works for them,” said Sarah Jenkins, the program manager for the Metropolitan Milwaukee Fair Housing Council. “Some of these discriminatory practices are common practice.” Photo by Erika Sanders provided by the Metropolitan Milwaukee Fair Housing Council.

Following a national outcry over discrimination in housing appraisals, the Metropolitan Milwaukee Fair Housing Council has created a program to help those who may be facing such a hurdle.

The education outreach campaign provides information surrounding housing discrimination to those who feel they may be discriminated against and helps them find a legal remedy if needed.

“This has been on our radar a long time but became a more complex issue when it became a federal problem,” said Erika Sanders, the director of program services for the council.

At the beginning of 2022, a conversation about appraisal discrimination started after a judge found it plausible that race discrimination occurred in a Black couple’s lawsuit over a lowball appraisal in Maryland.

The lawsuit sparked a national discussion and led to PAVE, a U.S interagency task force on Property Appraisal and Valuation Equity, to create an action plan to advance equity in this area.

“We are deeply concerned this is a real issue here,” Sanders said. “If the whole nation is battling this, there is no way Milwaukee is exclusive.”

The council’s worry is that appraisals are just another addition to the long list of things that contribute to the nation’s racial wealth gap.

“Homeownership is one of the major ways to build wealth, and if homes are being undervalued then it blocks opportunities,” Sanders said. “It overall impacts people’s quality of life.”

More to the point, this type of discrimination affects entire neighborhoods.

“Because of the way homes are appraised, this can leave communities undervalued and that becomes a quality-of-life issue,” she said. “Appraisal discrimination will just serve to reinforce racial disparities that already exist.”

One fear is that discrimination is built into the appraisal system.

“There has never been any formal overseer for appraisers, so they built systems the way it works for them,” said Sarah Jenkins, the program manager for the council. “Some of these discriminatory practices are common practice.”

Appraisal discrimination is illegal, and the council says if someone feels they are experiencing it they should reach out right away

Jorge Barreiro, the former president of the Wisconsin chapter of the Appraisal Institute, a professional association of real estate appraisers, said this has been a constant discussion since the beginning of the pandemic.

“If guidelines are followed accordingly, then this isn’t a problem anyone should run into,” he said. “But just like every other job, there are appraisers that don’t follow the guidelines.”

To get in front of any acts of potential discrimination, the institute holds training on biases and unconscious biases.

“We really just want to make sure appraisers know their biases so they can address them in advance,” he said.

According to Jenkins, signs of discrimination include language in the appraisal describing the racial or ethnic backgrounds of the homeowner or the surrounding neighborhood, an unreasonably low appraisal or if the comparable homes listed in the appraisal report don’t seem to share features with the appraised home.

 For more information

If you’d like to know more about the red flags of discrimination and how fair housing laws apply to the home appraisal process, contact the Fair Housing Council at 1-877-647-3247 or check out the council’s website.

New education campaign helps Milwaukeeans fight home-appraisal discrimination was originally published by the Milwaukee Neighborhood News Service.