Part of the issue with homeownership values lies with the values assigned by appraisers, who are mostly white, and the difficulty in reporting appraisal discrimination.
According to data provided to Axios by the real estate database Zillow, homes owned by Black people in the Detroit Metro area are worth approximately 45% less than those owned by white people. This dovetails with and illustrates the data surrounding homeownership in America; the typical value of homes owned by Black people is 18% less than those owned by white people.
According to the letter, “We are concerned that the Fourth Exposure Draft eliminated the Third Exposure Draft’s summary of the FHAct’s and ECOA’s nondiscrimination standards and, instead, substituted a distinction between unethical discrimination and unlawful discrimination. Specifically, we are concerned that the term ‘unethical discrimination’ is not well established in either current law or practice.”
The letter continued, “Accordingly, we believe the introduction of the term in USPAP, and the resulting need to distinguish between unethical discrimination and unlawful discrimination, would create confusion in the appraisal industry. In addition, federal and state regulators responsible for examining compliance with USPAP would face difficult challenges in determining when appraisers have engaged in unethical discrimination given that it is not defined in existing legal norms and standards and is inherently vague and subjective.”
In addition to the issue of home valuation, Black Americans often face difficulties in getting their mortgage applications approved due in large part to either poor or non-existent credit histories and high debt-to-income ratios.
According to the Urban Institute, the Black-white homeownership gap is an American design. In February, authors Jung Hyun Choi, Amalie Zinn, and Aniket Mehrota wrote a report detailing that increased interest rates on homes were positioned to add another impediment for Black people seeking to become homeowners.
According to the authors, “The racial homeownership gap remains wide, and policymakers, government agencies, financial institutions, and other changemakers in the mortgage market must all work together to significantly increase Black homeownership. The U.S. government afforded low-interest, amortized home loans to millions of white households for decades. Similarly, programs intentionally targeted to Black families and other historically excluded groups, who still face the effects of past discriminatory housing policies and practices, could help more such families access homeownership’s benefits.”
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Source: Black Enterprise
