The Not So Fair Housing Act: Disparities in Home Valuations

*Iyana Arrington

I. Introduction

During the summer of 2021, Baltimore natives Nathan Connolly (Nathan) and his wife, Shani Mott (Shani), pursued a home mortgage refinance.[1] After purchasing their home, the couple made numerous renovations.[2] However, the appraiser valued their home at only $472,000.[3] Months later, the couple applied again; but this time a colleague stood in as the homeowner.[4] The colleague acquired a value of $750,000—nearly sixty percent higher than their previous appraisal.[5] The home was identical for both applications; the only difference was that Nathan and Shani are African-American, and their colleague is white.[6] This is only one case among dozens in which homeowners of color experienced discrimination in their home valuations.[7]

For many years prior to 1968, the government used racial classifications to explicitly segregate housing.[8] Federal legislation perpetuated systemic racism by spearheading discriminatory housing policies.[9] To correct this issue, Congress introduced the Fair Housing Act of 1968 to strike down prior legislation that resulted in unequal treatment under the law.[10] While the law remains facially neutral today, remnants of de facto discrimination[11] in the housing market continue to impact minority communities.[12]

II. History

Racially-biased federal policies have played a critical role in the creation and endurance of segregated housing assessments.[13] In the 1930’s, the Federal Housing Administration (Administration)[14] refused to provide mortgage loans on homes located where the Administration presumed the loan might create an “inharmonious racial group” within a neighborhood, further propelling the problematic principal that race mixing was inappropriate and devaluing homes in African-American neighborhoods and artificially inflating housing values in White neighborhoods.[15] Subsequently, lenders began instituting practices, like “redlining,” to ensure segregated standards for homeownership.[16] Under these circumstances, home appraisals[17] became instrumental to the federal government’s scheme for the housing market, resulting in home values being heavily impacted by race.[18]

The Fair Housing Act of 1968 was introduced to address discrimination issues in the housing market and reverse prior intentional practices.[19] This legislation prohibited housing discrimination in transactions, while simultaneously requiring the federal government to administer housing programs in a manner that would affirmatively undo the vestiges of historic segregation.[20] However, in the midst of the political climate at the time,[21] the statute was rushed into implementation and legislators neglected to include particular methods for enforcement.[22] As the years progressed without any initial enforcement power, the government’s attempt to use the Fair Housing Act as an adequate remedy for housing market discrimination failed.[23]

III. Implications

While the progression of remedies under the Fair Housing Act displays the federal government’s attempt to eliminate de facto segregation in housing practices, some issues remain unaddressed and continue to affect minority communities.[24] According to the 2020 census, White Americans account for approximately sixty-two percent of the nation’s racial makeup, while African-Americans are represented at nearly fifteen percent.[25] Even with this drastic difference, studies show that today, the average African-American resides in a neighborhood that is only thirty-five percent white.[26] Because real estate in predominantly minority areas has consistently been undervalued, many others are unwilling to purchase in these zones.[27] These practices, although unintentional, significantly contribute to the racial wealth gap by suppressing the value not only of homes but of whole communities.[28]

These programs have impacted many major cities.[29] For instance, homes in predominately Black neighborhoods in Baltimore are chronically valued at about fifty percent less than the homes of their non-minority counterparts.[30] The primary issue with the disparity in valuations is that it hampers the ability of minorities to build equity in their homes.[31] Minority neighborhoods have experienced unrecoverable depreciation in home values.[32] Studies conducted after the 2009 recession indicate that Black homeowners continuously accrued less equity and were more likely to end the period with negative equity.[33] As another recession looms,[34] the central question is whether minority homeowners can sustain another drastic decrease in their property values.   

States across the country have begun to act to combat this issue.[35] In 2020, New Jersey introduced a bill that outlines legislative action for fining, suspending or revoking the licenses of appraisers who knowingly engage in discriminatory practices in valuing homes.[36] It also requires appraisers to inform sellers of the complaint process.[37] Many other states have also begun to take similar approaches to this proposed legislation.[38] But, most notably, President Biden has increased efforts on the federal level to supplant racial biases in housing practices.[39] In March of 2022, President Biden established the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) and gave them the responsibility of “clos[ing] the racial wealth gap by addressing mis-valuations for families and communities of color.”[40] PAVE’s action plan discusses how valuation bias developed alongside the scheme of the Fair Housing Act and outlines specific commitments for correcting this history, including: professional standards for appraisers; a valuation “appeals” process for victims of discrimination; requiring anti-bias training for all appraisers; and funding opportunities that educate homeowners of color on appraisals.[41] While PAVE’s plan is comprehensive and addresses many of these issues, until the federal government implements these procedures for dismantling discrimination in valuations, there is no clear solution to stop this subjective appraisal process.

IV. Conclusion

Black neighborhoods are estimated to have lost approximately $156 billion cumulatively due to discriminatory housing valuations.[42] Although instituted as a tool to protect minorities, the Fair Housing Act has not addressed the influence of systemic racism and unconscious bias on the housing market.[43] As more states begin to adopt legislation specifically geared toward housing appraisals, the federal government should take the initiative to formulate concrete rules and procedures for ensuring these discriminatory practices do not continue to irreparably harm minority communities.

*Iyana Arrington is a second-year day student at the University of Baltimore School of Law. She serves as a Staff Editor for the Law Review, a Legal Writing Fellow in the Legal Writing Center, and a Teaching Assistant and Law Scholar for Contracts I and II. She is also a member of the Fannie Angelos Program for Academic Excellence at the University, as well as a Distinguished Scholar of the Royal Graham Shannonhouse III Honor Society. In May, she plans to join the Baltimore office of Baker Donelson as a 2023 Summer Associate.

[1] Debra Kamin, Home Appraised with a Black Owner: $472,000. With a White Owner: $750,000.,N.Y. Times (Aug. 18, 2022),

[2] Id.

[3] Id. This value was only about $20,000 more than their original purchase price in 2017. Id.

[4] Id.

[5] Id.

[6] Id.

[7] See Troy McMullen, For Black Homeowners, a Common Conundrum with Appraisals, Wash. Post (Jan. 21, 2021),

[8] See Michelle Adams, The Unfulfilled Promise of the Fair Housing Act, New Yorker (April 11, 2018),

[9] See discussion infra Part II.

[10] Kamin, supra note 1.

[11] “De facto” segregation occurs when the government does not purposely discriminate; but rather, an unintentional government action causes a “racial imbalance.” Elise C. Boddie, The Muddled Distinction Between De Jure and De Facto Segregation 1 (Kristine L. Bowman ed.) (2020),

[12] See discussion infra Part III.  

[13] Michelle Zonta, Racial Disparities in Home Appreciation, Ctr. Am. Progress (July 15, 2019),

[14] In response to the Great Depression, in an attempt to stabilize the housing market, the federal government established the Federal Housing Authority to provide publicly backed loans to boost the demand for housing at the time. Id.

[15] Amanda Tillotson, Race, Risk, and Real Estate: The Federal Housing Administration and Black Homeownership in the Post World War II Home Ownership State, 8 DePaul J. Soc. Just. 25, 36 (2016).

[16] Redlining refers to the government’s parameters for appraising properties, which included color-coded maps ranking the “loan worthiness” of different communities. Candace Jackson, What is Redlining?, N.Y. Times (Aug. 17, 2021),

[17] An appraisal is a critical element of the homebuying and lending processes that establishes the value of the property. U.S. Dep’t. Hous. & Urb. Dev., Property Appraisal & Valuation Equity Action Plan 2 (2022).

[18] Matthew Blake & Georgia Kromrei, Home Appraisals Ugly History and the Uncertain Future, Housingwire (June 14, 2021),

[19] See generally Sam Fulwood, The U.S. History of Segregated Housing Continues to Limit Affordable Housing, Ctr. for Am. Progress (Dec. 15, 2016),

[20] Id.

[21] The original Fair Housing Act was instituted at a time where the nation was experiencing “significant turmoil” in a wave of race-related unrest. Id. Although the legislation was highly contested, the assassination of Dr. Martin Luther King propelled the enactment of the statute. Id.

[22] Id. (describing the development of HUD rules on how to better apply FHA to modern issues the court may encounter); see also Kamin, supra note, 1.

[23] Zonta, supra note 13.

[24] See 42 U.S.C. §3601 et seq.; Adams, supra note 8; Fulwood, supra note 19.

[25] Nicholas Jones, et al., 2020 Census Illuminates Racial and Ethnic Composition of the Country, U.S. Census Bureau (Aug. 12, 2021),

[26] Zonta, supra note 13.  

[27] See Fulwood, supra note 19.

[28] See generally Zonta, supra note 13.

[29] Rashawn Ray, et. al., Homeownership, Racial Segregation, and Policy Solutions to Racial Wealth Equity, Brookings (Sept. 1, 2021),

[30] Id.

[31] Zonta, supra note 13.

[32] Id.

[33] Id.

[34] See Sarah O’Brien, We’re in a “Housing Recession,” Experts Say. Here’s What That Means for Homeowners, Sellers, and Buyers, CNBC (Aug. 23, 2022, 3:57pm),

[35] See, e.g., N.J. Leg. No. 5185, 2020–2021 Gen. Assemb., 219th Sess. (2020); H.B. 5862, 101st Gen. Assemb. (Ill. 2020).

[36] N.J. Leg. No. 5185, 2020–2021 Gen. Assemb., 219th Sess. (2020).

[37] Id.

[38] See H.B. 5862, 101st Gen. Assemb. (Ill. 2020); see also Earl Hopkins, Franklin County Auditor Michael Stinziano Looks at Racial Inequalities in Housing Appraisal Process, Columbus Dispatch (Sept. 24, 2020), (describing how a county in Ohio plans to eliminate inequalities through a fair housing appraisal commission who will review valuations).  

[39] See generally U.S. Dep’t Hous. & Urb. Dev., Property Appraisal & Valuation Equity Action Plan 1–45 (2022).

[40] Id.

[41] Id. at 22–37.

[42] Johnathon Rothwell & Andre M. Perry, Biased Appraisals and the Devaluation of Housing in Black Neighborhoods, Brookings (Nov. 17, 2021),

[43] See Adams, supra note 8.  

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