Worsening racial inequality in home appraisals detailed in new report

In 1968, President Lyndon B. Johnson signed the Fair Housing Act, which prohibits discrimination based on race, religion, sex and nation of origin in the sale, rental or financing of housing. More than 50 years later, however, discrimination in the housing market not only exists, but is getting worse.

That is a key finding of a new report, “Appraised: The persistent evaluation of white neighborhoods as more valuable than communities of color homes,” released Nov. 2 by Elizabeth Korver-Glenn, assistant professor of sociology in Arts & Sciences at Washington University in St. Louis, and Junia Howell, visiting assistant professor of sociology at the University of Illinois Chicago.

Using the newly released Uniform Appraisal Dataset — the most comprehensive set of market appraisals in the nation — Howell and Korver-Glenn find that homes today in white neighborhoods are appraised at double the value of comparable homes in communities of color. This represents a 75% increase in neighborhood racial inequality in home values over the last decade.

“Although the racial inequality in home values has been increasing since 1980, the rate by which it is increasing has tripled in the last decade,” Howell and Korver-Glenn write in the report. “From 1980 to 2015, the neighborhood racial gap in appraisals expanded by $6,000 a year. Yet, in this last decade, this gap grew by $18,000 a year.”
COVID-19 pandemic worsened inequality

In the report, Howell and Korver-Glenn reveal that the unprecedented rise in home values during the COVID-19 pandemic further exacerbated racial inequality in appraised home values. Over the last two years, the average home in white neighborhoods increased in value $136,000, which is more than twice the appreciation a comparable house in a community of color experienced ($60,000), they write.

The difference was even more dramatic in the hottest markets — including Austin, Texas, Boston, Colorado Springs, Colo., Miami, San Diego and Seattle — where racial inequality in appraised values increased by $91,000, or 43%. According to the authors, this increase in inequality is nearly three times greater than the increase in racial inequity in stable housing markets like St. Louis.

“Nearly half of the growth of inequality observed over the decade occurred during the pandemic,” Howell said. “Our study shows that industry and monetary policy decisions made during the pandemic enabled an influx of capital into the housing market, primarily in white neighborhoods. This substantial increase in inequality will have ripple effects on racial inequities in wealth and well-being for years to come.”
Unequal harm among communities of color

Finally, Howell and Korver-Glenn examined differences in appraisal inequality across various communities of color. Their results show the difference between white neighborhoods and communities of color is particularly stark for American Indian, Alaska Native, Southeast Asian and Pacific Islander communities. In 2021, homes in white neighborhoods were appraised over three times more valuable than comparable homes in similar American Indian and Alaska Native neighborhoods located within the same metropolitan area, the authors said. Likewise, homes in white neighborhoods were appraised as three times more valuable than comparable homes in otherwise similar Southeast Asian and Pacific Islander communities.

Full article at: https://source.wustl.edu/2022/11/worsening-racial-inequality-in-home-appraisals-detailed-in-new-report/