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California Couple Sues Appraiser Over What They Say Was Racial Bias In Home Valuation Lowballed By $500K

San Francisco Bay Area homeowners Paul and Tenisha Tate-Austin have filed a fair housing lawsuit in a federal district court against Janette Miller and her appraisal firm Miller and Perotti Real Estate Appraisers Inc., whose valuation of their home was almost $500,000 less than its true value. 

The couple is requesting a jury trial, compensation for financial damages, and that for the court to have appraisers take the necessary training to curtail bias in the valuation process.  

“We did our homework,” Austin told the Reparations Task Force in a panel on the racial wealth gap in October. “We believe the white lady wanted to devalue our property because we are in a Black neighborhood, and the home belonged to a Black family.”

In 2016 the couple purchased their home for $550,000 and then, over the next few years, invested $400,000 in renovations that included an in-law unit and an outdoor deck. Four years later, the couple was eager to know the new value of their home and hired an appraiser.

The appraiser, whom the couple described to local station ABC7 as an older white woman, was impressed with the addition of windows that overlooked the San Francisco Bay. She also complimented the other improvements. And then came a shocker: the appraisal value was set at $995,000, almost $500,000 less than an appraisal done earlier in the year.

The couple was stunned and after learning about appraisal discrimination, they decided to get another appraisal done. But this time, the couple asked Joe, a white friend, to pose as the owner of the property. And once again, when the appraisal was determined, the couple was shocked. The house was now worth $1.4 million. 

The Austins are not alone. There are several cases alleging racial discrimination in the home appraisal process throughout the United States. However, it is prevalent in California, as homeowners are looking to cash in on greater home value as the cost of homes is on the rise. Cases of racial bias in the appraisal process have been found in Oakland, Stockton, as well as other cities in California with large Black populations.

Attorneys for the couple argue in the new lawsuit that “Marin City has a long history of undervaluation based on stereotypes, redlining, discriminatory appraisal standards, and actual or perceived racial demographics.”

Through the lawsuit, the Austins financial damages. They are also asking the court to order the defendants give fair valuations and that they won’t discriminate when appraising houses in the future.

Owner-occupied homes in predominantly Black neighborhoods are often undervalued by at least $48,000 per home, according to the Brookings Institution. This represents an estimated $156 billion in losses — hurting Black homeowners and their communities. As a result, the need for policy reform has been presented in an effort to minimize discrimination. 

However, experts in the appraisal industry acknowledge that the process is subjective, racial bias is not always the culprit. Instead, they need to increase home values in a housing market with rising prices places appraisers in a precarious position if property owners do not agree with their analysis. 

Yet in the case of the Austins, their allegations are steeped in their understanding of Marin City history and their personal experiences. 

“There are definitely things about this complaint that are uniquely strong,” Julia Howard-Gibbon of Fair Housing Advocates of Northern California and the couple’s attorney told The San Francisco Chronicle. “They erased themselves from the home, essentially.”

“My stomach hurt, my head hurt, just because of what we went through,” Austin told The San Francisco Chronicle. “I don’t wish that on anybody.”

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