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Racial Bias in California Housing and How You Can Help
April 13, 2021

Racial Bias in California Housing and How You Can Help

by The CE Shop Team

Racial Bias Remains Prevalent in the Housing Industry - Here’s How You Can Help

The housing industry has a long and ugly history of racial bias. In fact, between damaging and discriminatory housing practices like redlining to racial steering, generations of minorities have been systematically barred from achieving the dream of homeownership. Unfortunately, these issues remain pervasive today. Here’s one minority couple’s experience with racial bias, and how you can join the fight for equity in homeownership.

Black and Latina Real Estate Couple Low-Balled on Appraisal

Racial Bias in California Housing and How You Can Help

Ronald and Dominique Curtis, Black and Latina homeowners respectively, were working to refinance their home last year. The Curtis family hoped to take advantage of record-low interest rates, potentially saving thousands over the life of their loan. As part of the refinancing process, the lender sent a home appraiser who valued the Curtis’ Bay Area home at $900,000. The only issue? Another appraisal just months earlier determined the home’s value was $1,154,000, more than a quarter-million-dollars higher.

Luckily, Ronald and Dominique are both in real estate, and the couple quickly recognized the red flag. "I've been a [real estate agent] for over 10 years, and currently I'm a licensed real estate broker," said Ronald. 

"I've been training to become an appraiser for about two and a half years now. I'm due to take my test fairly soon," said Dominique. As for the appraisal, "somebody doesn't have to say that the reason why they did it is because we were Black or Puerto Rican, or people of color. But absolutely, that's the reason why," said Ronald. The Curtises gathered evidence and submitted a thorough complaint to the California Board of Real Estate but, as the refinance was delayed, the family missed out on the potential savings that come with locking in a lower interest rate as soon as possible.

Sadder still, the Curtis family’s experience is not unique. The incident is nearly identical to the viral story of a Black Marin City couple whose home was undervalued by nearly $500,000 mere months earlier. When a White friend brought over some family photos and posed as one of the owners at the second appraisal, the appraisal value increased by nearly 50%.

Racial Bias in the Housing Industry

Unfortunately, the housing industry as a whole has an ugly and complicated history of discrimination stretching back to slavery. Homeownership is one of the most efficient ways to build wealth yet, in late 2020, Black Americans had a 44% rate of homeownership, Hispanic Americans had a 49% rate of homeownership, and Asian, Native, Hawaiian and Pacific Islander Americans had a 60% rate of homeownership. White Americans, on the other hand, had a 75% rate of homeownership. Of the people of color who do become homeowners, it appears that families like Ronald and Dominique Curtis are also being systematically denied their earned home equity - to the tune of more than $250,000, in this case. 

While the numbers may seem bleak, progress is happening across the housing industry. To combat the ugly effects of racial bias in homeownership, banks are now offering grants aimed at raising minority homeownership rates, individuals across the nation are standing up in their communities, and NAR is working to provide their members with the tools for change.

“Last year, NAR worked with [The National Association of Real Estate Brokers] and the Urban Institute to develop a five-point framework to boost minority homeownership,” said NAR Vice President Vince Malta. “We’ve also developed innovative new training programs on implicit bias and confronting discrimination in real-life real estate scenarios… In January, we began implementing our new “ACT” plan – which emphasizes Accountability, Culture Change, and Training – designed to ensure REALTORSⓇ are doing everything possible to protect housing rights in America. We’re also working with our partners to develop a second ACT plan that advocates for housing policy that addresses systemic discrimination and the legacy of housing segregation.”

How Can California Real Estate Agents Fight Racial Bias?

With change on the horizon, there’s no better time to become an advocate in your community. Work to recognize and shed your own racial biases, volunteer, donate, and be sure to report any discrimination you may come across in the field. After all, securing universal equity in homeownership will take all of us!