As the election of 2024 has made painfully clear, elections have consequences. One of the consequences of the recent federal election is a shift in the government’s approach to fair housing, especially its enforcement of federal civil rights laws. This includes a shift of federal attention away from home appraisal bias.
In his budget request for Fiscal Year 2026, Trump proposed a 70 percent reduction in funding for HUD’s Office for Fair Housing and Equal Opportunity, for more than 50 years the primary federal fair housing enforcement agency. The House has requested a similar cut, while the Senate proposed level funding. HUD withdrew the Affirmatively Furthering Fair Housing Rule promulgated by the Biden administration, and Trump issued an executive order that would “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible”—a vital tool in addressing housing discrimination.
One fair housing challenge that adversely affects housing providers as well as consumers is racial bias in home appraising. This issue had been ameliorated (to a degree) but not yet resolved by actions taken at the federal, state, and local level. But because the federal government is now in retreat, local communities must take up at least some of the slack. Philadelphia may be a role model for other cities.
Why focus on racial bias in home appraising? First, the home has historically been the vehicle through which American wealth is accumulated. Consequently, properly valued homes can help close the racial wealth gap. Second, mortgage lenders and other housing industry participants, as well as homebuyers, rely on accurate property appraisals to protect their financial interests. Finally, 2024 amendments to the Uniform Standards of Professional Appraisal Practice (USPAP) demand that appraisers not discriminate on an illegal basis (which includes acts of intentional discrimination as well as implementing policies or practices that have a discriminatory effect).
[RELATED ARTICLE: A Home’s True Worth—Getting Beyond Appraisal Bias]
An example of racial bias in home appraisals: In 2020, Abena and Alex Horton sought to refinance their mortgage, taking advantage of lower interest rates. Abena, who is Black, met with an appraiser who appraised the home at $330,000. The Hortons thought this was low, so they removed all family photos and had Alex, who is white, meet with another appraiser, who said the home was worth $465,000. They put their story on Facebook and received 2,000 comments. Many people said the same thing happened to them.
Lessons for Localities: Philadelphia’s Appraisal Efforts
Over the last few years, all levels of government focused attention on appraisal bias. At the federal level, we had the PAVE Task Force. It released a report in early 2022 and was making real progress, but the Trump administration disbanded the effort. Maryland convened its Task Force on Property Appraisal and Valuation Equity in 2023.
And on the local level, in 2021, then-Philadelphia City Councilmember Cherelle L. Parker formed the Philadelphia Home Appraisal Bias Task Force, which included multiple representatives of the appraisal profession. The Philadelphia Task Force produced a compendium of recommendations. In January of 2024, as the new mayor of Philadelphia, Parker created the Philadelphia Home Appraisal Bias Advisory Group to implement these recommendations.
Since then, the city has made many changes to advance the prospects of residents seeking a fair appraisal.
(Editor’s note: One of the co-authors of this piece, Ira Goldstein, formerly chaired the Philadelphia Home Appraisal Bias Task Force. He now serves on the Advisory Group, as does Gregory D. Squires.)
At the state level, Pennsylvania adopted Practical Applications of Real Estate Appraisal (PAREA), an alternative method for appraisers to gain the experience needed for licensure. PAREA is believed to be a positive step to creating diversity in the appraisal profession by addressing the traditional supervisor/trainee model many report as an impediment to people of color entering the profession. And the state now requires all appraiser licensees to undergo fair housing and valuation bias training. Both state actions were Task Force recommendations.
Recently, Philadelphia Mayor Parker’s Housing Opportunities Made Easy (H.O.M.E.) Plan—a $2 billion effort to create and preserve 30,000 housing units—passed through the city council and is in the early phases of implementation. The plan includes home appraisal bias training for staff at housing counseling agencies and fair housing organizations, along with workshops on bias for prospective homeowners. This is on top of hiring a full-time director of the Home Appraisal Equity Program created by Parker, along with another staff person dedicated to this effort.
Philadelphia’s appraisal bias efforts are supported by an advisory group, inclusive of appraisal industry and real estate professionals, educators, researchers, government officials, elected officials, public interest attorneys, housing advocates, and city administration staff from across the government. The advisory group meets quarterly, and smaller working groups meet more frequently.
One group is working to find ways of gathering local appraisal data, especially related to homeowners whose purchases were supported by city government (e.g., a first-time homebuyer who received a downpayment/closing cost assistance grant). Another group is designing the education and outreach effort that was funded by H.O.M.E.
What’s Holding Back Progress on Appraisal Bias?
Changes at the federal level have made achieving fairness for all in real estate appraisals a more difficult task than it already was. But it isn’t just the federal government jeopardizing progress.
Not all in the appraisal profession acknowledge the historic and ongoing problems of racial bias, nor are they committed to addressing those issues. For example, in early 2024 then-CEO Cindy Chance of the Appraisal Institute published a startling denial of any wrongdoing by appraisers, praising the industry as a long-serving bastion of objectivity and fairness, and dismissing all accusations of bias as a “false narrative.” Instances of appraisal bias are just anecdotal, Chance claimed, reflecting “noise” or “mistakes” rather than any systemic problem. She argued that the profession is already well regulated and that there is no financial interest in appraisers creating anything but an objective and fair statement of property value.
But let’s not forget that a key dimension of the housing market crash was inflated home values justified by appraisals. The Collateral Risk Network wrote, “What role did appraisers play in the housing crisis? Appraisers didn’t directly cause values to decline. They weren’t the catalyst for homeowners to cease paying their mortgage. But they did help create fictitious equity and were complicit in facilitating trillions of dollars of loans that never should have been made.” [emphasis added]
Racial bias in appraising is not a false narrative. For an industry that is under 8 percent Black, Hispanic, or Latine and just 27 percent female, an industry that recently settled a federal lawsuit alleging discrimination in the very way by which people enter the profession, and an industry against which a significant lawsuit was recently filed by the federal government, reducing the level of fair housing vigilance now would be a mistake with generational impacts.
Understanding the degree to which appraisal bias affects people and communities is hampered by a lack of detailed data and transparency. The Federal Housing Finance Agency first released public aggregated appraisal data (the Uniform Appraisal Dataset, or UAD) late in 2022; it provided unprecedented access to years of data associated with Fannie Mae– and Freddie Mac–related loans. The UAD is slightly better now, with limited inclusion of appraisals related to FHA and VA loans.
Owing to the limited transparency into the activities of appraisers—unlike financial institutions, which face greater reporting obligations under the Home Mortgage Disclosure Act—it is hard to know how much racial bias exists in the appraisal of homes. In July, Georgia Sen. Raphael Warnock introduced the Appraisal Modernization Act, which was subsequently incorporated into the Renewing Opportunity in the American Dream (ROAD) to Housing Act. ROAD’s provision could go a long way toward addressing the data issue by calling for the U.S. Government Accountability Office to consider public disclosure of appraisal data. But the data that is available clearly indicate this is not just a matter of a few “mistakes”; something systemic is occurring.
Transparency in government is key to enabling an informed citizenry to understand the activities, priorities, and impacts of government agencies and the entities they regulate. UAD data shows that nationwide, census tracts that are mostly residents of color see substantially higher rates of appraisals come in below the contract sales price than in majority white tracts, or even in tracts with smaller majorities of residents of color. These patterns were found in cities like Philadelphia and Baltimore. Generalized differences of opinions or mistakes would be random and would not create racially disparate patterns; systemic bias could. Better data would yield a broader understanding of the scope of the problem—and where bias seeps into the appraisal process—leading to more informed and better policy responses.
Reasonable people will, hopefully, agree that the extremes of the appraisal bias argument are probably wrong: that appraisal bias is epidemic in the profession OR that appraisal bias simply does not exist. Perhaps discrimination happens less often or differently now than previously, but it does happen. And it is axiomatic that the appraisal industry simply cannot be a fully self-regulating profession almost totally lacking in transparency and with no consequences for violations of the nation’s fair housing laws.
Appraisal bias is not a “false narrative,” nor should it be dismissed as the clarion call of “the Left.” We fervently hope that the nation’s effort to combat appraisal bias not be a casualty of the 2024 federal election. And we recommend that local governments like Philadelphia redouble their efforts to address this critical fair housing issue—doing those things cities can do, and working with their state governments on issues within the states’ purview.
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By way of introduction, I am a female certified residential real estate appraiser actively licensed by my state of residence. I began my appraiser career in 1985 and encountered gender bias for years. I successfully sued the Veterans Administration and the Dept of Housing and Urban Development forcing the government to stop discriminating against women and install us on their appraiser panels. The case was filed in Pensacola, FL federal court in the early 1990’s.
In adding up the total number of appraisals of residential real estate I have appraised, it is approximately 12,000 homes, calculated at 300-appraisals a year since 1985.
In order to meet the requirements of my clients in the financial services industry, I am licensed and insured. I carry $2 Million Dollars per incident of Errors and Omissions insurance. I also carry general liability insurance to cover me when I am on someone else’s property.
I wrote a book and titled it after the words of my first appraisal course instructor. By way introduction to the course the instructor, Ed Compere, MAI, wrote these words on a huge blackboard so that all 300-students in the room could see it. He wrote: “Only God knows the value of anything. You are offering your opinion.”
Appraiser independence is codified into federal law under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It is specifically included in the Truth in Lending Act (TILA), where it is enforced through the Consumer Financial Protection Bureau and other regulatory bodies.
Appraisers face constant pressure from the financial services industry and the public they serve because we stand between them and earning money and borrowing money. The pressure often crosses the line into lawless threats and baseless charges of “appraisal bias.” It can come in the form of revenge complaints to state agencies filed by borrowers, Realtors, and lenders aka “stakeholders.”
Whenever anyone levels harmful, malicious, baseless, revenge accusations against me for anything related to my professional services to my clients, I sue them. There zero reason to allow people to harm my ability to earn my living and every reason to hold them accountable for their abuses of me. I have never lost a case.
Based upon my own 40-years of experience providing valuation services to the financial services industry, the best way for appraisers to survive the current climate of baseless, malicious, charges of “appraisal bias” is to hire lawyers to address it. We must not stand idly by and allow it to wear a national groove into our professional reputations.
It is past time that we professionals hold the accusers responsible for their willful acts of harm. They are undermining our ability to earn our living via their unlawful interference, many of whom will say and do anything to close on a real estate contract.
As for irresponsible, unethical, dishonest, opinion writers like Messrs Goldberg and Squires, I would like nothing better than to see them BOTH held strictly accountable for their exploitation and malicious defamation of the appraiser profession. They should not be allowed any further free shots for clicks. And I can assure their readers that neither have a clue about the appraiser profession, a noble profession that they are attempting to harm with their malicious accusations of “appraisal bias.”
Hello Judith Haney. Thank you for your interest in our opinion piece. And I’m sorry that you were a victim of discrimination. Congratulations on hanging in on what seems like a very long fight to vindicate your civil rights. Having worked in the civil rights field for many years, I know that the harm felt from a discriminatory act is truly different than harm felt from an act stemming from other causes. You and everybody else benefits from your fight!
As it relates to the main substance of your response, I’d make just a few points: (1) Our point is not that appraisers always discriminate – and I guess your point is that they never discriminate. We write: “…the extremes of the appraisal bias argument are probably wrong: that appraisal bias is epidemic in the profession OR that appraisal bias simply does not exist. Perhaps discrimination happens less often or differently now than previously, but it does happen. And it is axiomatic that the appraisal industry simply cannot be a fully self-regulating profession almost totally lacking in transparency and with no consequences for violations of the nation’s fair housing laws.” (2) Your ad hominem attack about clicks or my personal ethics/honesty (you don’t know me or my friend and colleague Dr. Squires) seem unfounded and unnecessary – happy to stimulate constructive debate on the issue but there’s really no need for gratuitous comments like that. (3) Really what we’re calling for is transparency, which is fundamentally lacking for the appraisal profession. In this day and age, it is hard to understand any argument against transparency. As Justice Brandeis wrote: “sunlight is said to be the best of disinfectants.” (4) Lastly, I know that some names sound similar, but my name is Goldstein, not Goldberg. I take no offense at your error. Thank you, and enjoy your holiday weekend.
This “appraisal bias” piece blankets the appraisal profession with a smell of old dead fish.
The piece is short on facts and evidence and long on click-bait tactics replete with baseless allegations.
Neither Goldstein or Shires have a clue about valuation. They have no training, expertise, knowledge, or proficiency in valuation. They are engaged in a campaign of malicious libel against the appraiser profession, taking their free shots absent accountability for their lies.
Both of these empty hats appear to believe that they have extraordinary powers of insight into a highly technical field of endeavor that neither of them could perform in a million years.
I suggest they take a seat before making further fools of themselves because so far all they offer to the discussion is empty headed foolishness.
If people want to talk about appraisal bias they should talk to appraisers and learn something about appraisal methodology, including the development and communication of residential real estate appraisals. But that appears to have been way over the heads of Goldstein and Shires. They preferred to publish unfounded lies for the purpose of harming and harassing residential appraisers who number over 43,000 within the United States.
The Uniform Standards of Professional Appraisal Practice, the generally recognized ethical and performance standards for appraisers in the United States. Developed by The Appraisal Foundation, USPAP sets guidelines for appraisal services in fields like real estate, personal property, and business valuation, and its compliance is mandatory for state-licensed appraisers in federally-related real estate transactions. It ensures that appraisals are unbiased, credible, and well-supported by thorough research and analysis.
The USPAP confidentiality rule is part of the Ethics Rule, which prohibits appraisers from disclosing confidential information or assignment results to anyone except the client, persons authorized by the client, state enforcement agencies, third parties authorized by law, and professional peer review committees. Confidential information is defined as data not publicly available, identified as confidential by the client, or protected by law. Appraisers must also take reasonable steps to safeguard this information, like using secure data storage and informing staff about disclosure prohibitions.
There is an old adage in the legal community that ‘If you have the facts, argue the facts. If you have the law, argue the law. If you have neither, pound the table and yell like hell.’ We hope Ms Haney has not done too much damage to her fist or throat.
Goldberg and Shires
Dear Ms. Haney. The tone, insults, and substance of your comments lead me to believe that you will not be persuaded by anything I say. You are, as my father used to say: unbiased by fact. The “not a step back” posture you adopt notwithstanding evidence to the contrary on the issue is not constructive. But for those readers who are looking for some facts, objectivity, and a robust and polite debate about the issue, I offer a few facts.
Fact 1: The Philadelphia Task Force I chaired on appraisal bias included appraisers, a trustee of the Appraisal Foundation, guests from the Appraisal Subcommittee and many others with the kind of expertise you say my colleague Dr. Squires (not Shires) and I did not consider. We did listen and continue to listen to responsible members of the appraiser profession.
Fact 2: The issues we raise, we can certainly debate but are not baseless and are rooted in facts and data – data collected by the GSEs and reported by the Federal Housing Finance Agency.
Fact 3: I am in fact more than passingly familiar with the nation’s fair housing laws and USPAP. There is not a professional standard that allows an appraiser to violate the Fair Housing Act, Truth in Lending Act or other of the nation’s laws. And you offer a false narrative that there is no appraisal data that could be released because of USPAP ethics standards. Certainly, some of what is in an appraisal should be protected for privacy considerations. But like mortgage loan applications for which Congress created the Home Mortgage Disclosure Act requiring reporting of important data about mortgage applications but protecting the privacy of the applicants, a reporting regime balancing privacy and data available for a legitimate set of public purposes could be fashioned for appraisals.
Fact 4: I recommend that you and other readers of this piece read Advisory Opinion 39, Antidiscrimination of USPAP wherein the fair housing obligations of the profession are clearly articulated.
Again, my colleague and I are not saying that the entire appraisal profession engages in unlawful racial discrimination resulting from bias – and we are not saying that it never happens. But like every other part of the real estate industry, discrimination happens sometimes and as a society we need a robust and fair enforcement regime, and data and transparency to support that effort.
Goldstein and Shires are wholly invested in their libelous diatribes based upon zero evidence to support their irresponsible allegations.
While they spend time chastising me for my comments, I have never found it warranted or appropriate to be polite to people like Goldstein and Shires who libel, slander, and malign me and my profession while standing outside of the profession.
The only people who belong inside of this discussion are practictioners who work full time performing valuations for the financial services industry. We are on the front lines and our opinions about “appraisal bias” are the only ones that count.
I don’t want to hear complaints from borrowers or clients about my work products. If my work products are reviewed by a peer and found to be in violation of USPAP, I want hear about it. The rest of the rock throwers can pound sand.
The professional rock throwers had a bad day in court when they recently lost a case against a practicing appraiser whom they accused of “bias.” I expect similar outcomes when future stakeholders mistakenly believe that they have a vote in the outcome of valuations of proposed collateral for federal related mortgage loans. They don’t have a vote in spite of all of the nonsense spewed by rabble rousing rock throwers like Goldstein and Squires.
Goldstein and Squires are taking free shots at 43,000 appraisers. Unlike me, these two town-callers do not have $2 Million Dollars of Errors and Omissions insurance backing up their opinions. So, they are delighted to target all 43,000 practicing appraisers in the United States with their baseless allegations of “bias.” They know that stakeholders are hungry for any sliver of hope of winning an “appraisal bias” case against a practicing appraiser who is insured for millions of dollars. The fact that we carry the insurance practically guarantees that some fraudster and their lawyer will try to get a sum of money just to get them to go away, and they don’t have to step one foot in court or file a single pleading. It’s called extortion.
Goldstein and Squires have no evidence, whatsoever, to support their allegations of appraisal bias. And anyone thinking about using their statements in court should think twice.
Within their responses to my comments, they have failed to cite a single instance of appraisal bias within any work product produced by any appraiser.
Instead of their vague references to data collected by the GSEs and reported by the Federal Housing Finance Agency, I invite them to cite their specific data with verifiable links. Put forth your data instead of your poison pen. I want a chance to address it.
And, FYI, I am an experienced review appraiser, have assisted plaintiffs and defendants in developing evidence related to real estate litigation. My clients have included local, state, and federal governments, courts, and mortgage lenders, as well as private parties.
If you think you can prove your allegations to me, then you “may” be able to sell your misguided opinions to others. However, I cannot imagine you teaching me anything that I do not already know on this particular subject. But, since you both have defended your reprehensible accuations flung far and wide against an entire appraiser profession, I invite you to prove it with specific cases of appraisal bias. Cite your sources and the cases.
These two have never appraised a home. The idea that an appraiser would go out of his way to get “inferior” comps because he has a personal vendetta with a certain race or gender is absurd. We get paid to do a job. You know, most appraisers are reviewed, do they notice bias???
Racism / Gender issues, will always exist in society, but the idea that this is common is laughable. We look at land and improvements, not the owner’s demographics.
These people create this illusion for monetary gain. I’m sure these two are going to write a book on the subject.
Judith Haney is spot on. See if you can find another real estate appraiser with 20 years of experiece that will support your claims.
The various appraiser groups have failed to adequately confront the growing cacophony of appraisal bias hoots and howls coming from people like Goldstein and Squires, Senator Warnock, and other high profile ignorami who do not have a clue about how appraisals are developed and communicated.
And while I have been highly critical of Cindy Chance for having smeared some people in the course of pressuring the Appraisal Institute for a big payout following her termination, I think she and the board could, and should, have done a lot more to confront the growing campaign of appraisal bias hurled against residential appraisers. We must not allow the smears and lies to go unchallenged.
Now it is too late to confront the defamers, they are are growing bunch of opportunists. They garner attention to themselves with their reprehensible accusations against appraisers. All we can do is respond to them and hold them accountable for the harm they are inflicting upon our noble profession. We cannot remain silent in the face of their highly destructive abuses of our fellow appraisers.
Regardless of all attempts to discredit us, we remain an elite group of Americans with rare skills that have been developed over a long period of time. The training and experience that we offer cannot be easily duplicated. When we retire, there are very few to replace us. And our critics in the peanut gallery have no idea about our knowledge and experitise that has enabled us to obtain certifications and licenses.
I hope that others will join in responding to people like Goldstein and Squires. If we don’t, their lies will stick to us. For some reason, society prefers to hear their lies than to hear our truth.