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DOJ’s interest in housing discrimination lawsuit underscores the bias many Black homeowners have faced for decades

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Last year, Tenisha Tate-Austin and her husband, Paul Austin, filed a lawsuit and say they were victims of appraisal bias. CNN

(CNN) — A Black couple’s lawsuit against a home appraisal company is now catching the attention of the Department of Justice.

Last week, the DOJ filed a statement of interest in the couple’s claim that the first appraiser of their Marin County home violated the Fair Housing Act. Tenisha Tate-Austin and her husband, Paul Austin, say they were victims of appraisal bias. After spending months on renovations, a White appraiser valued their home much lower than they had anticipated, the couple told CNN in December. When a White friend showed the couple’s home as her own, its appraisal rose $500,000. The new appraisal for their home was now valued at more than $1.4 million, the couple said.

The couple filed the lawsuit in December, and it underscored decades long discussions about housing discrimination, Black homeownership and racial bias, prompting them to seek advice from experienced solicitors just like the manchester solicitors to navigate the complexities of the case.

The DOJ’s Civil Rights Division issued a statement on Monday saying that “combating housing discrimination, including bias in appraisals, is a high priority across the federal government.”

The interest in the Tate-Austins’ case “directly addresses President Biden’s order to appraisal agencies to advance equity for all people, especially marginalized groups with a deep history of racial discrimination in the housing market,” the statement of interest outlines.

CNN reached out to the Tate-Austins for further comment about the DOJ’s statement of interest.

The Tate-Austins were one of a few cases in which a lawsuit was filed under a FHA violation, which drew the attention of the federal government, Aryele Bradford, a DOJ spokeswoman, told CNN Friday.

“…Although a number of similar situations have been reported by the media, there are few filed cases that include these types of claims under the FHA,” Bradford said in an email statement.

In the DOJ’s statement of interest, the civil rights division aims to “provide an overview of the FHA” to address the two issues in the couple’s lawsuit.

These issues came directly from the defendant, the first appraiser for the Tate-Austin home, the statement of interest outlines. The White appraiser claimed the FHA does not apply to residential appraisers and the couple failed to prove sufficient evidence of racial discrimination in the appraisal.

The difference in Black homeownership and White homeownership is measured in thousands of dollars, according to a Redfin analysis last year. Homes in Black neighborhoods are undervalued by about $46,000 per home. Devaluation — the percent discount value between homes in neighborhoods with a 50% Black population and those with no Black residents — is detrimental overtime. The more devaluation allows for more segregation and less opportunities for upward mobility, the analysis found.

A history of housing discrimination and racial bias

The California couple’s lawsuit doesn’t surprise researchers like Carolina Reid, a faculty research adviser for the Terner Center for Housing Innovation based at the University of California at Berkeley.

“Researchers have consistently shown the ways in which Black and other homeowners of color experience bias and discrimination in housing and credit markets,” Reid told CNN.

Discrimination in the housing market dates to the Great Depression following the Federal Housing Administration redlining of several areas across the US. Neighborhoods were considered hazardous if its residents were “inharmonious racial groups” a label primarily directed toward Black people, according to a Terner Center report on the homeownership gap.

The Federal Housing Administration, in turn, discouraged banks from making loans on properties in redlined areas thus propelling Black and Brown neighborhoods into poverty and discouraging non-White families from applying for “green lined” housing. Redlining continues to impact these communities today, according to the Terner report.

In 1968, the Fair Housing Act (FHA), strictly prohibited discrimination against all people — regardless of race, ethnicity, sex or religion — regarding the sale, rental and financing of housing in hopes to address disparities in the housing market.

“What is more unique is that they (the Austins) have evidence of this disparate treatment,” she said.

The Fair Housing Act provides “plausible entitlement to relief” if the plaintiffs can prove the defendant was engaged in discriminatory practices regarding housing.

The Terner Center report, which Reid co-authored, said the FHA is intended to protect Black and Brown homeowners, but the homeownership gap continues to widen due to years of systemic oppression.

“The Black/White homeownership gap is as large as it was when the Fair Housing Act was passed,” Reid told CNN. “Addressing appraisal bias/housing discrimination is only one piece of a larger puzzle of reforms that are needed, but it’s an important component of addressing systemic racism in housing.”

 

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