Tenisha Tate-Austin and Paul Austin were so “shocked” by an appraiser’s early 2020 assessment of their Bay Area home that they decided it wasn’t enough to argue with their bank that the undervaluation was racially motivated.
Instead, according to a suit filed last week against the appraisal company, the African-American couple asked for a new appraisal and “white-washed” their home by removing photos of themselves and their children, and storing any African or African-American themed artwork. Then they asked a white friend to greet the new appraiser and put some of her own family photos around the house.
The original appraisal of their Marin City home came in at just under $1 million. The “white-washed” version of the same house only weeks later? Nearly $1.5 million.
Race was a motivating factor in the original appraiser’s “unreasonably low valuation of the Austins’ house, in violation of the Fair Housing Act and related federal and state laws,” according to the suit, filed in federal district court. The Austins “suffered damages, including loss of financing opportunity in connection with their dwelling, economic losses, emotional distress with attendant physical injuries, and violation of their civil rights.” They are demanding a jury trial, punitive damages and an order from the court to ensure that such discriminatory practices do not take place again.
The Austin family’s suit is one of several filed by Black Bay Area homeowners recently, arguing that widespread discriminatory practices in the appraisal industry are a modern-day version of “redlining,” a decades-long strategy of denying financial services and undervaluing homes in predominantly Black and Latino neighborhoods.
“Discrimination in the appraisal process is something we’re seeing more and more often,” said Caroline Peattie, executive director of Fair Housing Advocates of Northern California, in a statement. The organization filed the December suit on behalf of the Austins as well as a similar July suit for Cora Robinson, a Black Oakland duplex owner.
“Not only were there things in the appraisal that were just plain wrong, such as the number of bedrooms and the property classified as rent controlled when it’s not, but the sales comps that the appraiser chose to use were guaranteed to lower the value of my house,” Robinson said in a statement when her case was filed.
This type of housing discrimination isn’t new, Peattie said. What has changed is that more homeowners of color are now coming forward when they experience an unfair appraisal, particularly when it results in their loan or refinance being denied.
Nor is the extra attention confined to the Bay Area. In April, Congress approved the Real Estate Valuation Fairness and Improvement Act, which created a federal interagency task force to deal with the issue. Susan Rice is leading the task force, with a report due by early next year.
People of color are also facing discrimination in the rental market, according to a report that shows people with Black- or Latino-sounding names are less likely to get a response from landlords than those with white-sounding names.
Austin said in a statement that part of his motivation in filing suit last week was to bring more attention to the housing issues being faced by people of color in the hopes of seeing reform.
“I really hope that this lawsuit makes appraisers and lenders start to look more carefully at their practices and policies,” he said. “We feel that litigating this case is not only important for us but for our community as well.”