Biden to lower barriers to housing discrimination cases and boost Black-owned home values

The Biden administration will take actions aimed at combatting discrimination in the American housing market, creating an interagency initiative to address yawning disparities in home appraisals and lowering legal barriers to filing housing discrimination cases.

President Joe Biden — announcing the initiatives while marking the 100th anniversary of an attack on a thriving Black-owned business district in Tulsa, Okla., — said he would task Marcia Fudge, secretary of the U.S. Department of Housing and Urban Development and a former Ohio congresswoman, with leading the housing efforts.

Black homeowners have long complained that their homes are undervalued compared with similar homes owned by white Americans, contributing to major financial disparities and depriving Black households of a key source of wealth generation.

One 2018 study found owner-occupied homes in majority Black neighborhoods were undervalued by $48,000 per home on average, amounting to $156 billion in cumulative losses compared with white communities. That study, published by the Brookings Institution, found Black-owned homes in Pittsburgh were undervalued by $11,920, or by 11%, on average when compared with similar homes in white communities.

“When you look at the price point of homes in Black neighborhoods, it’s almost as if people are seeing twice as much crime as there actually is, they’re seeing worse education than there actually is,” said Andre Perry, senior fellow at the Brookings Metropolitan Policy Program, who co-authored the study and continues to press for fair appraisals.

Mr. Perry said appraisers typically use a price comparison model that compares properties to other similar properties in the same immediate area.

Limiting comparisons to “neighborhoods that have been discriminated against, you essentially recycle the discrimination over and over again,” said Mr. Perry, who explained that his experience growing up in Wilkinsburg and the Pittsburgh area informs his interest in closing racial wealth gaps today.

“Those perceptions are not just with appraisers,” Mr. Perry added. “It’s also with real estate agents and lenders. So what we ultimately need this interagency effort to do is collect the data so we can see specifically how much these actors play into the lower price.”

The White House, ahead of Mr. Biden’s visit to Oklahoma on Monday, said the appraisals initiative would be part of a broader effort to expand opportunities for Black Americans as they buy homes and start businesses.

The announcement came as Ms. Fudge’s department moves to reverse two Trump administration rules, bringing back Obama-era standards. One Trump rule barred the federal government from using its funding mechanisms to push state and municipal governments on fair housing policies, while the other Trump rule raised legal hurdles for people claiming housing discrimination.

The legal hurdles, called the disparate impact standard under the Fair Housing Act, held lenders, landlords and housing providers liable for discrimination against protected classes, like racial minorities, even if it was not their intent to discriminate. Last year, the Trump administration imposed a new standard that required proof of intentional discrimination.

“The effort will seek to utilize, quickly, the many levers at the federal government’s disposal, including potential enforcement under fair housing laws, regulatory action, and development of standards and guidance in close partnership with industry and state and local governments, to root out discrimination in the appraisal and homebuying process,” the White House stated.

The White House also pledged to grow federal contracting with small disadvantaged businesses by 50% over the next five years, spending an additional $100 billion to help “more Americans realize their entrepreneurial dreams.”

The actions are defining the agenda for Ms. Fudge, who served for eight years as mayor of Warrensville Heights, Ohio, a Cleveland suburb, before joining Congress in 2009.

Ms. Fudge, among the first Cabinet secretaries to be confirmed by the Senate, told lawmakers during her Jan. 28 confirmation hearing that she would take significantly stronger federal actions to stem the tide of evictions and make housing more affordable and accessible to people of color.

“HUD — perhaps more than any other department — exists to serve the most vulnerable people in America,” Ms. Fudge said in her opening remarks.

“That will require us to end discriminatory practices in the housing market,” Ms. Fudge said, so that the door is open “for families, especially families of color who have been systematically kept out in the cold across generations, to buy homes and punch their ticket to the middle class.”

Over the long run, she said the agency must improve the nation’s stock of affordable housing and meet Mr. Biden’s pledge to build 1.5 million new affordable housing units.

Sen. Pat Toomey, R-Pa., the top Republican on the Senate Banking, Housing and Urban Development Committee, questioned her push to return to the Obama-era disparate impact rule and the need for sweeping new funding measures and affordable housing construction.

Mr. Toomey voted against Ms. Fudge’s confirmation in March, when she was approved by a 66 to 34 vote.

Daniel Moore
Post-Gazette Washington Bureau