The Biden administration announced Wednesday an ambitious set of reforms intended to combat bias in the home appraisal process, along with a report chronicling a history of bias and its effect on the racial wealth gap in America.
The report attached to the action plan paints a picture of an entrenched system still plagued by issues of bias, with stories of Black families receiving higher appraisal values after removing evidence of their Blackness still common, and of the wealth gap created in part by the history of bias in home appraisals, with the median white family holding eight times the wealth of the median Black family in America today, according to the report.
“Homeownership is the primary contributor to wealth building for Black and brown households and continues to hold promise for building multigenerational wealth and housing stability for households of color,” the White House said in a statement. “But bias in home valuations limits the ability of Black and brown families to enjoy the financial returns associated with homeownership, thereby contributing to the already sprawling racial wealth gap.”
The Biden administration’s five-point plan seeks to make the appraisal industry more accountable, arm consumers with assistance and awareness, prevent algorithmic bias, cultivate a more diverse appraisal industry, and leverage federal data to benefit research and policymaking around appraising.
The administration signaled plans to pursue legislation that will result in a more modernized and regulated appraisal industry, after years of the industry being mostly self-regulated and closed-off. Federal agencies will develop a legislative package to improve coordination between federal enforcement agencies to better spot patterns of discrimination in appraisals, according to the report.
To assist homeowners who may have received a valuation that is lower than expected, the administration plans on issuing guidance on the steps homeowners can take to have…