Democratic lawmakers have turned their attention toward the real estate market. Released Friday, Sen. Raphael Warnock, Rep. Emmanuel Cleaver and several other lawmakers put together a letter that outlines steps that the Federal Financial Institutions Examination Council has taken to reduce racial disparities within the housing market.
“Given the critical connection between homeownership and wealth, as well as the longstanding structural barriers to homeownership for families of color, it is crucial that appraisers accurately and impartially assess the values of Americans’ homes,” the group of nearly 30 lawmakers wrote.
“Therefore, we encourage FFIEC to work with appraisers to reduce the racial appraisal gap and to address the long-term undervaluation of neighborhoods of color.”
In the letter, Democratic lawmakers cited a Brookings Institution study that found houses of similar qualities are valued 23% less in majority-Black neighborhoods. Furthermore, a 2020 Bloomberg report highlighted that the housing appraisal gap between white communities and communities of color has doubled since 1980. Also, a couple in Florida saw the appraisal of their house go up by more than $400,000 after they had their white friend pretend to be the homeowner.
“Multiple researchers and policy think tanks have repeatedly shown homes in Black and Latinx communities are worth considerably less than homes in white neighborhoods. In some cities, the average appraisal value in white neighborhoods is seven times the value in communities of color," sociology professor Junia Howell said.
“When we are comparing apples to apples, racial disparities persist. Moreover, the influence of racially unjust laws and policies is inseparable from all the other factors used to explain the disparities. In short, no matter how you slice it, there are stark racial inequalities in appraisal values — inequalities that have only gotten worse over time.”
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