The Appraisal Institute, American Society of Appraisers, American Society of Farm Managers and Rural Appraisers, and the Massachusetts Board of Real Estate Appraisers announced a concerted effort to combat unconscious bias and discrimination in a release on Friday.
The coalition pledged to develop training programs that cover issues of bias as well as connect the appraisal community with thought leaders on unconscious prejudices. Each of the organizations also announced steps to enhance their personal Code of Ethics to more “firmly or overtly address bias and discrimination issues with protected classes.”
According to the release, the organizations have previously worked together this year to address COVID-19 related appraisal hurdles and policy issues facing the valuation process.
“During this important time in our nation’s history, our organizations stand together to enhance existing training and ethics initiatives and work even harder to ensure that the appraisal process is free of bias or discrimination of any kind,” said Appraisal Institute President Jefferson Sherman.
The appraisal industry has been under scrutiny recently after a Florida couple who attempted to refinance their home in Jacksonville were met with a lower rate than what was initially expected after meeting the appraiser. The couple first told the story to the New York Times in August and ABC News did a follow-up on Wednesday. Abena Horton, a Black female, removed all the photos from the home that revealed her husband, a while male, had an interracial family. When a second appraisal was conducted with a different appraiser – and her husband greeted them alone – the value of their home rose by more than $100,000.
In 1968 the Fair Housing Act was enacted to prohibit discrimination based on race, religion, national origin or sex when it came to the sale, financing and rental of homes. However, a report conducted by the Brookings Institute in 2018 found homes of similar quality in neighborhoods with similar amenities are worth 23% less in majority-Black neighborhoods, compared to those with very few or no Black residents. At an average of $48,000 difference per home, the study estimates $156 billion in cumulative losses.
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In September, President of the Appraisal Foundation Dave Bunton released a newsletter acknowledging the community’s failure to report discrimination mainly due to lack of information regarding the Uniform Standards of Professional Appraisal Practice (USPAP) – a system of enforcement for individuals to report discrimination to state regulators.
Bunton’s call to action included awareness of reporting mechanisms, modifying education to include implicit bias-related issues and diversification of the practice as a whole. The foundation also established a Special Committee of Diversity and Inclusion in April.
“Acknowledging that bias exists is but one small step. Together with our partners, we commit to doing the hard work of educating our members about the various ways bias can affect their work, and provide them the tools necessary to overcome bias. By doing this as a profession, and not merely as individual organizations, we hope to underscore to our members and the public just how important this issue is to all of us,” stated American Society of Appraisers International president Lorrie Beaumont.
