Agent Essentials

Real Estate Agent Blog

President Biden Addresses Home Appraisal Racial Disparities
June 15, 2021

President Biden Addresses Home Appraisal Racial Disparities

by The CE Shop Team

Biden Administration Aims “to End Discrimination and Bias in the Housing Market”

President Joe Biden has announced new initiatives “to build Black wealth and narrow the racial wealth gap,” including a plan to address racial disparities in home appraisals.

Research shows that houses in predominantly Black neighborhoods often appraise at lower values than houses in majority-White neighborhoods, even when comparing housing with the same characteristics and neighborhoods of equal socioeconomic status, Bloomberg CityLab reported. And the disparity is increasing — a recent study found that the racial composition of a neighborhood was an even "stronger determinant" of a home's appraised value in 2015 than it was in 1980.

The president unveiled the initiatives during a visit to Tulsa, Oklahoma, this month to commemorate the 100th anniversary of the Tulsa Race Massacre, when a White mob violently attacked the city’s Black community, burning homes and killing hundreds.

He was the first president to visit Tulsa to address the 1921 massacre. For decades, the event was rarely discussed publicly and largely ignored in history books.

One hundred years later, Biden told a crowd of survivors and their families that the story of the massacre “would be known in full view,” according to The New York Times.

“For much too long, the history of what took place here was told in silence,” Biden said. “While darkness can hide much, it erases nothing.”

Violence in Tulsa and a Legacy of Discrimination


“One hundred years ago, the thriving Black community of Greenwood in Tulsa, Oklahoma, known as ‘Black Wall Street,’ was ruthlessly attacked by a violent White supremacist mob,” a White House statement says. “An estimated 300 Black Americans were killed, and another 10,000 were left destitute and homeless.”

The death and destruction were “followed by laws and policies that made recovery nearly impossible,” the statement says.

“The streets were redlined, locking Black Tulsans out of homeownership and access to credit. Federal highways built through the heart of Greenwood cut off families and businesses from economic opportunity. And chronic disinvestment by the federal government in Black entrepreneurs and small businesses denied Black Wall Street a fair shot at rebuilding. These are the stories of Greenwood, but they have echoes in countless Black communities across the country.”

The disinvestment in Black communities across the country is still felt today, the White House said, acknowledging that the median Black family has thirteen cents for every one dollar in wealth held by White families.

Black and Latinx Americans are less likely than White Americans to own homes, and their homes are also worth less, said Junia Howell, a sociologist who studies housing appraisals, in an interview with Marketplace.

“Homes in White neighborhoods are worth, on average, almost $250,000 more than comparable homes and similar socioeconomic Black and Latinx communities,” Howell said.

To determine how much a house is worth, appraisers typically take into account how much similar homes in the area have sold for recently. And after years of redlining, segregation, and other forms of housing discrimination, “when you compare homes to others in neighborhoods that have been discriminated against, you essentially recycle discrimination over and over again,” said Andre Perry at the Brookings Institution in an interview with Marketplace.

Several highly-publicized stories in recent years have featured a Black American who believed their home was appraised for less than it was worth, so they scheduled a new appraisal and asked a White friend or family member to answer the door. Invariably, the second appraisal resulted in a far higher value.

The Biden Administration’s Plan

Biden’s initiatives will expand “access to two key wealth-creators — homeownership and small business ownership — in communities of color and disadvantaged communities,” the White House statement says.

He pledged to do the following:

  • Take action to address racial discrimination in the housing market, including by launching a first-of-its-kind interagency effort led by Housing Secretary Marcia L. Fudge to address inequity in home appraisals, and conducting rulemaking to aggressively combat housing discrimination.
  • Use the federal government’s purchasing power to grow federal contracting with small disadvantaged businesses by 50%, translating to an additional $100 billion over five years, and helping more Americans realize their entrepreneurial dreams.

Fudge’s interagency effort “will seek to utilize, quickly, the many levers at the federal government’s disposal, including potential enforcement under Fair Housing laws, regulatory action, and development of standards and guidance in close partnership with industry and state and local governments, to root out discrimination in the appraisal and homebuying process,” the White House says.

“These are the kinds of policies and practices that keep Black families in Greenwood and across the nation from building generational wealth through homeownership.”

To read the plan in full, visit the White House website.

Industry Reaction

The National Association of REALTORS® praised the Biden administration’s efforts.

“The horrific acts of violence and property destruction that occurred in Tulsa 100 years ago and the subsequent public and private policies that frustrated the recovery of ‘Black Wall Street' help illustrate why racial wealth gaps persist in America today,” said NAR President Charlie Oppler.

“We commend the Biden Administration for its commitment to closing the gap, specifically by focusing on the intergenerational wealth building opportunities offered by property and homeownership.

NAR is particularly encouraged by the administration's most recent efforts to address inequities in the home appraisal process, and we support a thorough review of the current appraisal system alongside both public and private stakeholders. We look forward to working with [the] White House and HUD on other upcoming rulemakings that seek to more effectively combat housing discrimination and redress the legacy of residential racial segregation.”

Some are optimistic about the possibility of change because Biden’s efforts come at a time when the nation seems ready to reckon with its legacy of racism.

“It has a lot of teeth because Biden is saying it at this particular moment of time,” says Donnell Williams, president of the National Association of Real Estate Brokers, an organization for Black real estate professionals, told “The Black community is holding Biden accountable now.”

Ready to Get Started With The CE Shop?

Whether you’re a new agent looking to start award-winning Pre-Licensing education or an experienced veteran wanting to finish your Continuing Education, we’ve got a 100% online curriculum that’s one of the most diverse and groundbreaking in the industry. And if you want to network with your peers, join our Facebook group and get connected!