The Appraisal Institute is expanding its diversity initiatives to bring more people of color into … [+]
getty
The coronavirus pandemic has drawn widespread attention to existing inequalities in American society, including the racial wealth gap in real estate. As a result, a push to reimagine the appraisal process through a lens of equity and justice is taking on fresh urgency within the appraisal community.
An appraisal plays a crucial role in buying, selling or refinancing a home, determining for the seller, buyer and lender how much a home is worth. Deeply ingrained business practices that guided undervaluing homes in majority-Black communities are under a microscope as the industry re-evaluates its organizational culture.
From initiatives to advance representation, training and education for its membership to partnering with elected officials to bolster fair housing programs and developing solutions to mortgage credit problems, the appraisal profession is looking to up its game in training on unconscious bias, updating its ethics standards and beefing up diversity in its hiring practices.
“We really want to bring around some positive change,” said Rodman Schley, president of the Appraisal Institute. “That includes improving diversity within our profession.”
Working primarily with Fannie Mae and the National Urban League’s regional Entrepreneurship Centers and other community partners, such as the Appraisal Foundation and the American Society of Appraisers, the Appraisal Institute is focusing on initiatives that will make the profession more inclusive and representative of the general population.
And in an world where homeownership remains strongly linked to generational wealth building, a diverse real estate workforce matters. Decades of discrimination in housing have limited Black Americans’ access to homeownership, creating long-lasting and wide disparities in homeownership rates.
MORE FOR YOU
The Appraisal Institute is also working with policymakers on how to bolster fair housing programs and develop solutions to lending, underwriting and valuation challenges.
On April 20, the House Financial Services Committee approved HR 2553, the Real Estate Valuation Fairness and Improvement Act, legislation that would establish an interagency task force to analyze federal collateral underwriting standards and guidance, and provide resources for promoting diversity within the valuation profession.
The Appraisal Institute also encourages the development of increased flexibility for mortgage underwriting criteria, as proposed by the legislation. That could include alternative borrower underwriting beyond traditional credit scoring and risk modeling, and expanding the ability for appraisers to research sales transactions farther back in time in underserved markets.
In March, the organization submitted its letter of support to House Financial Services Committee Chairwoman Maxine Waters and ranking member Patrick McHenry in March.
Schley said, “My philosophy is the more people that you can have at the table, the more people that you can have working on a problem, the better solutions you’re going to have in the long term.”
The Appraisal Institute’s initiative educates candidates about real estate appraisal, provides resources for interested candidates and opens the door for mentorships from practicing appraisers. Scholarships are funded by the Appraisal Institute Education and Relief Foundation, which has committed $150,000 over three years to the initiative.
The scholarships cover the three entry-level courses required of appraisers. Recipients are matched with advisers who help them through the education and credentialing process.
These programs coincide with regular workshops conducted by the National Urban League throughout the nation to introduce audiences to the appraisal profession as a high-impact, high-reward career option.
“Achieving equity in homeownership and building generational wealth is challenging when the gatekeepers don’t reflect who we are or see the value in where we live,” said Marc Morial, president and CEO of the National Urban League. “We’re proud to help build a pipeline of diverse appraisers through our Entrepreneurship Centers that empower Black homeowners and communities.”
Recruiting a new generation of appraisers doesn’t necessarily mean the industry is at a crossroads. Instead, it presents an opportunity to make inroads.
“We are evolving,” explains Schley. “We’re growing, we’re looking. And the only way that you can evolve and grow is if you really look hard to identify these problems and then work relentlessly to be a part of the solutions.”