(Photo by Joel Kowsky/NASA via Getty Images)
Vice President Kamala Harris has announced “meaningful actions” to tackle racial biases in home valuations, which drive the national wealth gap.
On Thursday (June 1), VP Harris revealed a new initiative requiring financial institutions to ensure their appraisal algorithms are not racially biased. The Vice President and relevant staff provided the update from the White House.
“For example, that they do not produce lower valuations for homes owned by people of color,” Harris said on a call with press Thursday. “We are also releasing the guidance to make it easier for consumers to appeal what they suspect to be unbiased valuation.”
And those living in undervalued homes often endure needless increases in mortgage costs, too, Harris said.
“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.”
Studies show that white-owned homes are more likely to exceed algorithmic projections than Black-owned homes, Biden’s domestic policy adviser Neera Tanden said during Thursday’s announcement.
Meanwhile, Harris also highlighted the lack of Black and Brown home appraisers. She said only five percent of home appraisers are people of color.
However, the Vice President said the administration plans to offer training for POC interested in becoming home appraisers.
“(The goal is) to make sure that people who conduct home appraisals better reflect the communities they serve,” Harris said.
Meanwhile, the administration also announced it would be collecting home valuation data for over 600,000 public properties. That data pool currently includes 48 million houses, according to Harris.
Two years ago, Biden created the “Property Appraisal and Valuation Equity” (PAVE) task force on the centennial of the Tulsa Race Massacre. The task force identifies and removes bias in the home appraisal and valuation process.
In summary, the actions to ensure PAVE is successful include: “preventing algorithmic bias, empowering consumers to take action against appraisal bias, increasing transparency and leveraging federal data and breaking down barriers” to becoming a home appraiser.
