Freddie Mac published a September 2021 study, “Racial and Ethnic Valuation Gaps in Home Purchase Appraisals,” which found that Black and Latino applicants receive appraisal values below the contract price more often than white applicants.

This research serves as yet another reminder that our nation has a long way to go in not only identifying — but pursuing solutions — to racial bias around homeownership.

America’s history of challenges has led to inequities in homeownership for people of color, including a harmful legacy of redlining, risky subprime loans in mortgage lending and segregation. While these systemic problems date back generations, the stories from people of color about their experiences around homeownership are happening today.

As a global professional association of real estate appraisers, with nearly 17,000 professionals in almost 50 countries throughout the world, the Appraisal Institute’s mission is to empower valuation professionals through community, credentialing, education, body of knowledge and ethical standards.

And while appraisal is but one piece of the homeownership wealth gap puzzle, which includes lenders, real estate agents and regulators, we have a responsibility to respond, learn and change.

Therefore, I’ve made it a priority as Appraisal Institute president this year to address unconscious bias within the organization, amp up diverse recruiting into the profession and partner alongside others who are also working to do what is right.

I’ll be the first to acknowledge that right now, the profession — and the Appraisal Institute as a whole — looks a lot like me: white and male. At the same time, I also believe that we can affirm our place as an organization whose membership embodies the gold standard in appraisal but is self-aware enough to know that there is still work to do.

To those in the profession who are already on board with this — we’re so glad to have you. To those who are still working through this — stick with us, we’ll get there together. And to those who are coming up in their careers and want to see a diverse, open future reflected in what they do and where they entrust their membership — welcome! Join us.

Over this past year of my presidency, I’ve said it publicly, and I’ll say it again: Bias has no place in appraisal. I encourage my colleagues to say that out loud, as well. We’re going to continue to lead on this important work, we’re going to remind consumers of their rights to appeal and ask questions and we’re going to continue to expect the highest standard of ethics and behavior from our membership.

Appraisal Institute is a core partner of the Appraiser Diversity Initiative, which includes Fannie Mae, Freddie Mac and the National Urban League. The Appraiser Diversity Initiative works to attract new entrants to the appraisal field, overcome barriers to entry (such as education, training and experience requirements) and to foster diversity in the appraisal profession.

In the past year, the Appraisal Institute Education and Relief Foundation also has committed $150,000 over three years to the Appraiser Diversity Initiative. The scholarships cover the three entry level courses required of appraisers and winners are matched with advisers who help them through the education and credentialing process.

The ADI also has secured numerous corporate sponsors, including Chase, which made a $3 million commitment. These contributions are expected to help approximately 700 students with costs that include tuition fees, textbooks, calculators and other support resources.

We continue to collaborate with others to better understand their observations. For instance, we convened a Fair and Affordable Housing Symposium with The Appraisal Foundation and the Brookings Institution to address concerns about, and begin to consider, the role of appraisal and other parts of the housing ecosystem as it relates to inequities. The Appraisal Institute is beginning to delve into these concerns with the Federal Housing Finance Agency and others.

The Appraisal Institute is also actively collaborating with lawmakers at the federal and state levels, alongside other homebuying-adjacent organizations, to uncover opportunities to have wider-reaching impact, rather than attacking the problem in a piecemeal way.

We worked with the leaders of the House Financial Services and Senate Banking Committees on analyzing the regulatory ecosystem in real estate and mortgage finance to bolster fair housing programs and develop solutions to credit problems.

The Appraisal Institute also applauded HUD’s taskforce announced over the summer that will address inequity in home appraisal — we are eager to see how the recommendations shape up. Finally, we have actively supported legislation in California, Minnesota and New York — like AB 948 that was just passed in California — that require bias education requirements and consumer disclosures.

I believe that overwhelmingly, that there are more good people in this world than bad, including in the valuation profession — and that today, more than ever, people are committed to listening, learning and changing.

The conversations happening in this country are critically important and necessary for challenging and finding solutions to inequities and discrimination faced by communities of color.

Representation is a leading force for equity and inclusion in every profession, and we recognize that recruiting for greater diversity will make us stronger and more representative of the communities in which we work and contribute to overall greater cultural awareness.

This effort is a work in progress, and there is more to do and more conversations to have. We are absolutely committed to that. Combatting bias and inequity in appraisals is and will remain a priority for the Appraisal Institute.

Rodman Schley is the 2021 president of the Appraisal Institute, a global professional association of real estate appraisers that advocates equal opportunity and nondiscrimination in the appraisal profession. Connect with him on LinkedIn.

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