While many homeowners benefited from the boom in the housing market, another case of likely racial discrimination involving appraisals has cropped up. The new york times recently reported on a black family that received a $472,000 appraisal for their home. Then after removing family photos and having a white colleague stand in for them as the owner – a second appraisal came in at $750,000.--- that's nearly $300,000 more. Studies show that owner-occupied homes in black neighborhoods are undervalued by $48,000 per home on average, amounting to over $156 billion in cumulative losses in these communities. Marvin Owens, Chief Engagement Officer of Impact Shares and Former Senior Director of Economic Development at the NAACP, breaks down the frequency of discriminatory practices and what Black homeowners can do to preserve generational wealth.


Opening Bell

Home Values Soared During Pandemic, Except for Black Families

So here's your discusses Marvin Owens chief engagement officer of impact shares and former Senior Director of Economic Development at the N. A. A. C. P. Thank you so much for joining us. You know, I gotta start off with. How common is discrimination in the housing market, especially with these appraisals. I think it's very common unfortunately, I think black families that are experiencing this discrimination aren't really aware of it. The family that you referenced in your lead up to this conversation was was able to kind of go out and get a second an appraisal and kind of kind of choose a different path in terms of once they received that appraisal to say wait wait a minute. Something's wrong here. Unfortunately not enough families are doing that and the way in which we have to be able to kind of combat this is that really informing black families To not accept that first appraisal. But often if you see something or feel something is not right to go out and get another appraisal. You know, many minority families have gone as far as the whitewash their properties to get maybe more home equity out of it. That means taking all the pictures down. Like we mentioned having someone standing for you. But federal statistics show that nearly 98% of property appraisals are white. So how can education and transparency eliminate these appraisal biases? I think a couple of things needs to happen. I think the reality is that the organization that actually sets to professional standards for appraisals as a private N. G. O. Uh and I think that there needs to be some work done with that organization in terms of raising the concerns that we that we have out here about discrimination. Truth is that as that organization set standards every year, the penalty for for praising black homes lower than the normal needs to be clear. That's housing discrimination. That's against the law. And I think appraisal appraisers need to understand that those actions should have have a legal illegal uh consequence. They should, but they haven't. And this has been going on for years and years. And now the biden administration announced overhaul to the appraisal industry to be dismantled systematic biases, basically what they want done. So what do you feel needs to happen to clamp down on this discrimination and discriminatory practices and how soon would have happened? I remember he said that last year when another case popped off in texas. So I think that's that it's good to raise that question because unfortunately, the, you know, we see the federal government often moving way too slow on these issues. However, I want to just lift up some of the hard work that Congresswoman Maxine Waters Congressional Committee has been doing on these issues. In addition to the biden administration. I think that it's not just the president's responsibility, but Congress needs to really get involved and get engaged and again, establishing some penalties for this action. If there is no penalty, then the then the practice will continue Discrimination needs to be be raised and lifted up and identified, but there has to be some penalty involved in order for for actions to change. And we mentioned earlier that it's been a loss of $156 billion dollars to these black and brown communities where they're being undervalued. So how does this loss of wealth in these housing markets actually impact the families and communities themselves long term? Well, obviously there's there's the impact on the ability to really be able to build wealth but also transfer that wealth wealth. Home equity is the foundation investment, often for new businesses for for for new entities, for putting your kids through college, for any any number of uh financial opportunities that black families may have. So to strip away that home equity to impact negatively that wealth really does have direct impact. And the ability for those families who really be able to live out their dreams and do the things that they really want to do with their money. Um I also want to lift up the fact that there's also this other phenomena that that we see happening in black communities, which is not only you see in under value of homes in terms of appraisals, but what you also see is often an overtaxing of our black communities as well. So what you see, you have this double whammy, if you will of impact financially on black families where the undervaluing of homes makes it more expensive to to to be able to live and borrow and to to build, build wealth. But then you also see the stripping away of wealth through a tax code that sometimes undervalues black communities in a very significant way. So in that case, what advice do you give for these homeowners looking to raise their net worth amid the slowdown in the housing market and rising interest rates? Well, I think the question becomes, how do we then begin to kind of get the word out that that this is happening? Number one, number two, homeowners need to be able to take authority and meaning they have to decide, okay, I'm not going to accept the first appraisal that I received. I'm gonna go out and do the research myself. I'm going to find out what the what the what the what the comparables are in my community number, that's number one. Number two, that we keep going back to this is really, really, really important. But elections have, we have to be able to hold our elected officials accountable about how this this this phenomena gets played out in legislative policy policy needs to change around how how black communities are taxed, how black communities are have access to capital and lending how black communities have access to also all kinds of other services. The reality is that our communities need to be more involved in raising our voices and when we see something like this happening saying, we're not going to accept it such a good point. We cannot accept this to happen. Alright, Marvin Owens. Once again, thank you so much for your time and all your advice.