When Paul Austin and Tenisha Tate-Austin had their home assessed by an appraiser in 2020, they learned it was worth $995,000. So the Black couple, who purchased their home in December 2016 and spent thousands in renovation costs over the years, decided to get a second opinion. They “white-washed” their property and had a white friend pose as the homeowner. Weeks later, a different appraiser assessed the house’s value at $1,482,500.
The couple sued for discrimination.
The Austins, whose case was featured in the ABC documentary Our America: Lowballed, settled a federal civil rights lawsuit on Tuesday against Janette Miller and Miller and Perotti Real Estate Appraisals Inc, the San Francisco Chronicle reported.
They will receive an undisclosed amount in financial compensation from Janette Miller and her firm, Miller and Perotti Real Estate Appraisals, the publication reported. Miller is also required to attend housing discrimination prevention training and to watch the documentary.
Their discrimination case, just one of many throughout the US, offers a glimpse into the ways housing assessments are riddled with systemic racism, exacerbating inequities among homeowners seeking to determine their property’s worth. It exposes how white homeowners are valued while homeowners of color are devalued depending on the neighborhoods where they reside, a stark reminder of the longstanding toll federal policies like redlining had in dividing American cities.
Those devaluations exacerbated the already-growing wealth gap between families of color and white ones. In 2021, an analysis of more than 12m housing appraisals from Federal Home Loan Mortgage Corporation, also known as Freddie Mac, found that homes in Black neighborhoods were devalued as much as 23% on average compared to homes in white neighborhoods.
What’s more, in a 2022 study of recently public Federal Housing Finance Agency appraisal data published last November, researchers found that white homeowners were twice as likely to see their home values increase than owners of color.
The race of the neighborhood increasingly mattered … We were going in the opposite direction
Unlike previous studies, Junia Howell, a visiting professor of sociology at the University of Illinois Chicago, and Elizabeth Korver-Glenn, an assistant professor of sociology at Washington University in St Louis, analyzed more than 47m appraisal reports collected from licensed appraisers between 2013 and 2022. The data had been made public for the first time, a decade after Howell and Korver-Glenn first pursued it.
They found the gap between the home values of white homeowners and homeowners of color widened over the last decade. When unpacked by race, the results were staggering: appraisers valued homes in white neighborhoods two and half times more than homes in Black neighborhoods. For homes in Latino neighborhoods, the gap is larger, despite the fact that the value of the Latino residents’ homes were bigger than Black residents’.
And the largest appraisal gap came between the value of homes in white neighborhoods and those in American Indian, Alaska Native, south-east Asian and Pacific Islander communities.