A black couple standing in front of a house.

How Low Appraisal Values Affect Black Homeownership

A Black couple in the gentrifying San Francisco Bay Area found the appraised value of their home jump by half a million dollars when they were impersonated by a white friend. It’s hard to escape the conclusion that the house was assessed at an artificially low value because of its association with a Black family in a Black neighborhood. The undervaluation of Black-owned property was institutionalized through redlining and racial covenants that created exclusively-white neighborhoods.

But by some measures, racial disparities have only increased since the elimination of explicitly racist housing policies: the gap between white and Black homeownership is larger than it was in 1960 — and growing. Homeownership, in turn, is a key mechanism by which families pass wealth down from generation to generation. Fair appraisals of home values are crucially important as part of a comprehensive effort to address the growing gulf between white and Black wealth.


Follow these steps to report any unfair housing discrimination against you or someone you know. Use this website to help determine the best course of action by state.

Research to find a fair housing organization in your community to support.

Consider: How do inequitable housing appraisals affect the value of the homes in your neighborhood? How may it have affected the generational wealth of your family?

Black homeowners have shared countless stories of removing family photos or recruiting white friends to lead appraisals and home sales in hopes of getting a fairer price. In the NYTimes, comedian, and actor D.L. Hughley shared that an appraisal he received was so low the bank flagged the report for inaccuracy (NYTimes).

But these are not isolated incidents. Devaluing property owned by Black people is an institutionalized practice in the U.S. In the 1930s, as part of the New Deal, the federal government created a series of initiatives to incentivize homeownership (The Atlantic).

As part, surveyors analyzed neighborhoods throughout the country to identify which were most deserving of support. They would color code regions: green for “best,” blue for “still desirable,” yellow for “definitely declining,” and red for “hazardous. Areas outlined in red, or “redlined” areas, were neighborhoods with predominantly communities of color. Racial biases at the time saw these individuals as untrustworthy for lines of credit and their communities as unfavorable places to live. As a result, loans in redlined neighborhoods were extremely high or completely unavailable (Washington Post).

From 1934 to 1962, “98% of the Federal Housing Administration Loans went to White Americans” (NBC Chicago). A 1943 brochure encouraged realtors to avoid undesirables such as “madams, bootleggers, gangsters—and ‘a colored man of means who was giving his children a college education and thought they were entitled to live among whites’” (The Atlantic).

These practices “ended” in 1968, when the Fair Housing Act banned racial discrimination in housing. But discriminatory practices are still happening today. These racial perspectives of the value of “redlined” neighborhoods, and homeowners of color, are reflected in how these homes are valued in today’s time, with devastating impact.

A study from Brookings Institute puts this into perspective. Their research found that, on average, owner-occupied homes in Black neighborhoods are undervalued by $48,000, amounting to $156 billion in cumulative losses. Homes located where the population is 50% Black are considered half as valuable as communities with no Black residents. And these neighborhoods with greater devaluation are more likely to be segregated than others. They also produce less upward mobility for the Black children who grow up in those communities. This mobility is just a hint at the generational impact of this economic disparity and emphasizes why rebalancing this disparity is so essential. Read the full study over at Brookings’ website.

And this devalued property is ripe for gentrification, a topic we recently covered in our YouTube series. Many neighborhoods that are historically non-white will receive an influx of middle-class people, eager for accessible property prices. This is followed by a swift revaluation of the same property, forcing out existing community members or dissuading others from moving in (NPR). The appraisal industry is responsible for carrying these practices into the present day. The Appraisal Institute, the nation’s largest professional association of real estate appraisers, is working to increase representation and improve equitable conditions for homeowners (Forbes). Although accountability is necessary for shaping the industry, dismantling racism is necessary for reimagining the system – and creating a more equitable journey of homeownership for all.

* This piece has been updated.


Black homeowners routinely experience lower appraisal values than white homeowners.

The practice of “redlining” historically made homeownership incredibly difficult for non-white communities, and the discrimination from that time still persists.

Homeownership is important for building generational wealth and share of voice in local communities.

4980 3735 Nicole Cardoza

Nicole Cardoza

Nicole is an entrepreneur, author, investor, speaker and magician passionate about reclaiming our right to be well.

All stories by : Nicole Cardoza
Start Typing