California law addresses anti-Black bias in home appraisal process

by Antonio Ray Harvey, California Black Media

Paul Austin and his wife Tenisha Tate, a Bay Area Black couple, were confident that the sale of their Marin City home would net them a sizeable profit. They had invested hundreds of thousands of dollars into renovations before putting it on the market. 

But that process turned sour when the couple discovered alarming race-based discrimination baked into the system of home appraisals. 

Austin shared that harrowing experience with the California Task Force to Study and Develop Reparation Proposals during its fourth meeting on Oct. 13. 

California’s Assembly Bill (AB) 3121, signed into law in 2020, created the nine-member task force to investigate the history and costs of slavery in California and around the United States. The group is charged with studying and developing reparation proposals for African Americans and recommending appropriate ways to educate Californians about the task force’s findings. 

Austin’s testimony added to the growing body of evidence that the wealth gap that exists between Black and White families in the United States was created – and has been maintained throughout history – by deep-rooted racial biases and intentional government policy at the federal, state and local levels.

“We had an appraiser come out in 2019 to appraise our home,” Austin said, talking about the selling his home, which is located five miles north of San Francisco. “She was an older White woman, and she appraised our house for just under a $1 million after we had already put an additional $400,000 into our property. We did our homework because we should have appraised for $1.4 million. We had to fight against it.”

The wealth gap that exists between Black and White families was created by deep-rooted racial biases and intentional government policy at the federal, state and local levels.

Austin and his wife added an additional 1,300 square feet to the home’s original 1,300 square footage, he told the task force.

A qualified appraiser is responsible for creating a report based on a visual inspection. The property’s lot size, square footage, amenities and number of bedrooms and bathrooms are expected to provide the basis for an unbiased valuation. 

When Austin and Tate found a second appraiser, they decided to ask a White female friend to pose as the seller. This time around, they actually netted a surprisingly higher offer of $500,000 more.

When Austin and Tate’s story went viral and made headlines in news reports around the world, other Black families emerged to share disturbing stories of how they, too, were given deceptively low estimations of their homes’ values. 

“We’re right at the beginning. The story is now being told,” Austin told the task force. “But within our community, we have not had the opportunity to galvanize people to start looking at their loans and appraisals and comparing them with others, and I mean White folks, to see what’s going on in this industry.”

On Sept. 28, Gov. Newsom signed AB 948 by Assemblymember Chris Holden, D-Pasadena, legislation AB 948, which would address discrimination in the real estate appraisal process, such as the prejudicial treatment Austin and his wife received. 

“Black homeowners in predominantly White neighborhoods are getting their homes appraised for far less than their neighbors,” Holden said. “It’s just another example of how bias, whether explicit or implicit, creates inequity for Black Americans. This is redlining 2.0.”

Less than one in five Black California households could afford to purchase a home valued at the statewide median-price of $659,380 in 2020, as compared to two in five White California households.

AB 948 would require the Bureau of California Real Estate Appraisals to gather demographic information on buyers and sellers of real estate property and compile data of homeowners from protected classes who file complaints based on low appraisals. The legislation also requires appraisers to take anti-bias training when renewing their licenses. 

“This bill reflects a starting point in a much-needed conversation about how discrimination is still prevalent in the home buying and selling process, and I am committed to addressing this inequity,” Holden said.

Less than one in five Black California households could afford to purchase a home valued at the statewide median-price of $659,380 in 2020, as compared to two in five White California households that could buy a home at the same price, according to the California Association of Realtors (CAR).

CAR also stated in a February report that the affordability gap is “stark in expensive counties like San Francisco,” where a median-priced home of $1,650,000 was only affordable for 8 percent of Black households, 15 percent of Latinx households and 22 percent of Asian households – compared to 35 percent of White households.

The 2019, homeownership rate in California was 63.2 percent for Whites, 60.2 percent for Asians, 44.1 percent for Latinx and 36.8 percent for Blacks, according to the Census Bureau’s American Community Survey. 

Blacks weren’t able to buy land outside of Marin City.

Austin said that his family was part of the “second wave Great Migration” of Black people from the Deep South that settled in California around the 1940s. Many of them worked in the Sausalito shipyard in Marin County.

Many of the Black families that came to California during that period lived in government housing in Marin City while working in the naval shipyards in and around San Francisco. When World War II ended, Austin’s grandparents had enough money to purchase a home anywhere in Marin County.

“Due to redlining, they did not have that opportunity. Blacks weren’t able to buy land outside of Marin City,” he said. “If you look at Marin County, currently it’s arguably the richest county in California. The data also shows, when race counts, that Marin County as a whole has the largest disparities anywhere. It’s such a huge gap.”

Austin, who attended the Historical Black College and University Texas Southern University in Houston, said that he doesn’t want to see his children or other Black Californians deal with the same types of issues.

“Just think that if we didn’t have the will to fight the appraisal company,” Austin said. “It’s the systems that have been created by White people for White people that continuously negatively affect people that look like me. Now it’s time to take those steps and right the wrongs.”

California Black Media, serving California’s Black press, boasts a record of ensuring that the Black viewpoint remains central to all the debates that shape life in California. Antonio Ray Harvey and other members of the CBM staff can be reached at [email protected]. 

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