Remarks by Vice President Harris in a Press Call on Addressing Racial Bias in Home Appraisals

Via Teleconference

THE VICE PRESIDENT:  Thank you.  And good afternoon, everyone.  Thank you for joining us. 

And it is good to be with all of you to address a subject that is essential to the financial wellbeing of millions of American families — and that is the issue of home appraisal.

So, I think we all would agree homeownership is an essential part of the American dream. 

Homeownership is one of the single most powerful engines of wealth-b- — building available to American families.  Millions rely on the equity in their homes to put their children through college, to fund a startup, to retire with dignity, to create intergenerational prosperity and wealth.

We also know, for generations, many people of color have been prevented from taking full advantage of the benefits of homeownership.

For example, in 1913, my home state of California passed what was called the Alien Land Law, which barred Asian immigrants and their children from owning land. 

In the early 20th century, millions of Latino Americans had their homes and businesses confiscated and were removed from our country in an illegal act mischaracterized as, quote, “repatriation.” 

One hundred and two years ago today in Tulsa, Oklahoma, a white supremacist mob burned down Black-owned homes and businesses and decimated the Greenwood District, known as “Black Wall Street.”

And for decades, in communities across our nation, segregation, restrictive covenants, and redlining reinforced deep inequities.

And today, that legacy of inequity persists, in part in the home appraisal system.  Home appraisals are meant to be fair and objective estimates of the market value of a property.  However, far too often, they are not. 

Black homeowners are more likely to have their homes undervalued than other homeowners.  And homeowners in majority Black and majority Latino neighborhoods are almost twice as likely to be undervalued. 

And because their homes are undervalued, Black and Latino people often pay more for their mortgage, receive less when they sell, and are less able to get access to home equity lines of credit — all of which widens the racial wealth gap and deepens longstanding financial inequities.

Last year, I met with a couple, the Tate-Austin family.  And the couple, Tenisha and Paul, live in Marin City, California. 

In 2020, they had their home appraised, and the valuation was much less than they knew their home was worth.  So, being creative, they decided to get a second appraisal, not willing to give up.  This time, however, they asked a friend of theirs, who is white, to come over, put up their family photographs, and meet with the appraiser in the same home.  And as a result, their home was valued 50 percent higher than it was the first time.

Stories like Tenisha and Paul’s are far too common, and they are evidence that systemic change is needed.

Throughout my career, I have fought to defend homeowners from abuse and injustice.  When I was Attorney General of California, I secured $20 billion for homeowners harmed by the big banks during the foreclosure crisis.  And I drafted and helped pass the California Homeowner Bill of Rights to help protect consumers from unfair mortgages and predatory foreclosure practices.  That bill was one of the first bills of its kind in our country. 

And continuing on that work, our administration is working to ensure that people are protected from abuse and have access to homeownership.  Soon after the President and I took office, we helped more than 8 million households pay rent and we paused mortgage payments for nearly 3 million more.

Earlier this year, I was proud to announce that we lowered FHA mortgage insurance cost by 40 percent for millions of homeowners — homeowners in that category who were proportio- — disproportionately Black and Latino. 

And two years ago today, to identify and root out systemic home appraisal bias, President Biden and I created the Property Appraisal and Valuation Equity Task Force, also known as PAVE. 

Already, PAVE has taken some important steps to advance equity in the home appraisal process.  For example, we are ensuring that home appraisers who participate in federal programs complete anti-bias fair housing and fair lending trading — training. 

And because about 5 percent of home appraisers are people of color, we are building and expanding training pipelines for underrepresented groups to make sure that people who conduct home appraisals better reflect the communities they serve. 

Across our nation, states are following our lead in this work.  California passed a law that requires anti-bias training for appraisers.  Milwaukee, Wisconsin, launched a public education campaign on appraisal bias.  And in Philadelphia, they established an appraisal bias task force modeled after PAVE. 

And today, as we build on our leadership, many lenders have agreed to rely on algorithms to supplement or fully replace in-person appraisals.  These algorithms have the potential to reduce bias in the home appraisal process.  But if algorithms are used and built on biased data, then of course there is a real risk they could produce biased valuations. 

That is why today I am proud to announce we are developing a rule that will require that financial institutions ensure that their appraisal algorithms are not biased.  For example, that they do not produce lower valuations for homes owned by people of color. 

Today, we are also releasing new guidance to make it easier for consumers to appeal what they suspect to be a biased valuation.   

And finally, to help make clear the true scope of these inquiries, we are making public, bringing transparency to this approach and this issue and, therefore, making public data on 600,000 home valuations. 

In total, over the past year, we have released 48 million home valuation records, creating the nation’s first publicly available home appraisal dataset.  Already we have seen journalists, nonprofits, and academic researchers use this dataset to bring greater attention to the problem of home appraisal bias. 

Taken together, these are important steps toward a more just and equitable home valuation system.  And our administration will continue to do this work to ensure all people are treated fairly. 

And, of course, we believe that everyone should have and be able to take full advantage of their aspiration and their dream of owning a home. 

Thank you all.  And I’m now going to pass it over to Neera Tanden, our Domestic Policy Advisor. 

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