Black couple’s home was valued $500K higher after they had a White friend pose as the homeowner

Racial discrimination in the housing system in the United States is a systemic problem with several reports over the years exposing the significantly huge gap between Black and White homeowners.

Though the reasons for that, including redlining, challenges with securing home loans and undervaluing Black-owned homes aren’t hidden secrets, efforts to mitigate these setbacks have moved at a snail’s pace.

In California, a Black Bay Area couple shared their story on how their home was undervalued by a White appraiser despite making significant renovations amounting to hundreds of thousands of dollars. They believe race played a part.

Speaking to ABC7, Paul and Tenisha Tate Austin said they purchased their Bay Area home in 2016 after initially struggling to close deals on properties they were interested in due to challenges including being outbid. They said they eventually became homeowners thanks to another Black family that wanted to sell their property off to a Black couple.

The couple said when they moved into the 1960s-built home, they invested heavily in renovations, spending $400,000 in constructing new floors, a deck and a fireplace. They said they also installed new appliances and added 1,000 square feet of space as well as a whole new floor.

When their massively-renovated home was subsequently appraised, however, it was far below their expected valuation. “I read the appraisal, I looked at the number I was like, ‘This is unbelievable’,” Tenisha Austin told the news outlet.

The couple said the appraiser – an older White woman – used coded language including “Marin City is a distinct area” in her appraisal. She valued the couple’s home at $989,000 – $100,000 more than its previous estimate before their $400,000 renovation, ABC7 reported. The Austins said they believe race played a part in the White appraiser’s estimation of their home.

“It was a slap in the face,” Austin said.

Dissatisfied with the estimate, the couple said they complained to their lender and requested a second appraisal. They were granted that after a month of following up. Before the second appraiser came in, however, the couple said they had a White friend pretend to be the owner of their home.

“We had a conversation with one of our white friends, and she said ‘No problem. I’ll be Tenisha. I’ll bring over some pictures of my family,’” Austin said. “She made our home look like it belonged to her.”

That plan worked as the second appraiser valued their home at $1,482,000 – almost $500,000 more than the first appraisal. The couple said their home being initially undervalued is a stark manifestation of the much broader issues pertaining to systemic racism in the United States.

“There are implications to our ability to create generational wealth or passing things on if our houses appraise for 50% less than its value,” Tate Austin told ABC7.

Glaring reality

Racial discrimination in the housing system in the United States continues to persist, with Black Americans usually struggling to secure home loans compared to their fellow Whites, The New York Times reported in 2020. The former are also subjected to redlining, where they are denied mortgages in some neighborhoods. This practice further devalues homes in Black neighborhoods. Black homeowners also reportedly claim their properties are usually appraised far less than that of their neighbors in mixed-race and predominantly White neighborhoods.

A 2018 report by researchers at Gallup and the Brookings Institution also shed some light on the devaluation of properties in Black neighborhoods compared to similar homes in White neighborhoods. According to the report: “Owner-occupied homes in black neighborhoods are undervalued by $48,000 per home on average, amounting to $156 billion in cumulative losses.”

Speaking to The New York Times, Andre Perry, one of the writers of the Brookings Institution report, said Black homeowners still continue to bear the brunt of their homes being devalued – irrespective of the neighborhood they find themselves in.

“We still see Black people as risky,” Perry said. “White appraisers carry the same attitudes and beliefs of white America — the same attitudes that compelled Derek Chauvin to kneel casually on the neck of George Floyd are shared by other professionals in other fields. How does that choking out of America look in the appraisal industry? Through very low appraisals.”

A report by Redfin also revealed only 44% of Black Americans managed to own homes in 2020 as compared to 74% of White Americans. President Joe Biden has proposed financial reforms to make it less cumbersome for Black Americans to purchase homes.