Skip to main content

As Racial Disparities in Home Appraisal Values Increase, Rush Requests Study on Appraisal Disparities and Causes

July 30, 2021

Homes in Black and Brown neighborhoods appraised at lower values than those in white neighborhoods and racial inequalities in home values are increasing

WASHINGTON — This week, in a letter to U.S. Government Accountability Office (GAO) Comptroller General Gene L. Dodaro, U.S. Representative Bobby L. Rush (D-Ill.) called for a study on the disparities in home appraisal values between white- and Black-owned homes across the United States, as well as the causes behind the disparities.

"Discrimination in home appraisals have resulted in a systemic robbery of wealth from Black families and Black communities, a robbery as insidious as redlining and Jim Crow. The stunning disparities in appraisal rates between Black- and white-owned homes underscore a fundamental truth: that it is costly to be Black in America. It is time to use the imprimatur of the U.S. Congress to shine a bright light on this issue in order to officially determine the scope of the problem, identify solutions, and make the issue known far outside of Black and Brown communities," said Rep. Rush.

Research has repeatedlyindicated that homes in Black and Brown neighborhoods are appraised at lower values than those in white neighborhoods, regardless of the attributes of the actual home. Indeed, in many places, the racial composition of a neighborhood is the primary determinant of a home's appraisal value — even more important than factors such as location, age of the home, and square footage.

Worse, racial inequality in housing appraisals is widening — the value of homes in white neighborhoods rose an average of $225,000 in real dollars from 1980 through 2015, while houses in communities of color saw their value rise by only an average of $31,000 in that same period. In Chicago, the disparity between appraisal values in Black and Latino neighborhoods as opposed white neighborhoods has increased more than six-fold since 1980. The appraisal profession is approximately 85 percent white, and less than two percent of appraisers identify as Black, according to recent data from the Appraisal Institute.

"To truly achieve racial equity in the housing market, we must examine every possible way to eliminate the discriminatory vestiges of its foundation. Given that homeownership remains one of the primary ways for American families to build wealth, it is vital to ensure that minority homeowners do not continue to receive discriminatory treatment that systematically devalues their homes. That is why it is imperative that the GAO promptly undertake a comprehensive study detailing why such extreme racial disparities exist within home appraisals and how to rectify them," Rush wrote in the letter.

A 2018 study from the Brookings Institute found that in the average U.S. metropolitan area, homes in neighborhoods where the share of the population is 50 percent Black are valued at roughly half the price as homes in neighborhoods with no Black residents. The difference in appraisals has led to a $156 billion cumulative loss in value nationwide for majority-Black neighborhoods. In the Chicago-Naperville-Elgin area, homes in majority-Black neighborhoods are devalued by an average of 28 percent.

Rep. Rush is also a cosponsor of the Real Estate Valuation Fairness and Improvement Act (H.R. 2553), which would establish a task force to identify and remove barriers to equitable real estate valuation and provide federal grant funding to facilitate diversity in the appraisal profession.

The full text of Rep. Rush's letter to GAO is available HERE.

# # #

Issues:Civil Rights