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Paul Austin thought things were going well when the assessor came to his home in Marin City last January.
The assessor complimented the views of the San Francisco Bay Area, and was sure to point out any improvements, Austin recalled at an Oct. 13 meeting of a state repairs task force. So he and his wife Tenisha Tate-Austin were shocked when the appraisal valued their home at $ 995,000, nearly half a million dollars less than another appraisal 10 months earlier.
The couple, who are black, got a second opinion last February. This time, they got a white friend named Jan to sit at the kitchen island and pretend to be the owner. They also “whitewashed” their home, hiding artwork and family photos. This appraiser said their house was worth $ 1,482,500.
The $ 487,500 discrepancy between the two 2020 appraisals prompted the couple to file a fair housing complaint in Federal District Court this week against appraiser Janette Miller, her appraisal firm Miller and Perotti Real. Estate Appraisers, Inc. and the national appraisal company AMC Links, LLC. This is the latest escalation in a string of similar cases of alleged racial bias in the home appraisal process as California homeowners attempt to cash in on record home prices.
“We’ve done our homework,” Austin told the Reparations Task Force during a panel on the racial wealth gap in October. “We think the white lady wanted to devalue our property because we are in a black neighborhood and the house was owned by a black family.”
Miller’s company and AMC Links, LLC did not respond to requests for comment.
Researchers at the Brookings Institution have found that owner-occupied homes in predominantly black neighborhoods in the United States are undervalued by an average of $ 48,000 per home, representing some $ 156 billion in cumulative losses – a dynamic that has sparked calls for policy reform to further automate the home. evaluation process and minimize bias. Some in the appraisal industry, meanwhile, argue that the process is inherently subjective and driven by extreme pressure to increase home values, exposing appraisers to unfair personal liability when homeowners are out of business. agree with the results.
In the case of Austin and Tate-Austin, the large valuation gap illustrates how even Bay Area residents who can buy a home in one of the country’s most expensive real estate markets can be left out of the picture. ‘part of the massive wealth generated by increasing property values. .
The Austin family bought the home in late 2016 for $ 550,000, according to the lawsuit, and Austin said it spent around $ 400,000 to expand the footprint, renovate the interior and add features such as an outdoor patio and a beautiful unit overlooking the bay. With the second higher valuation designed to take race out of the equation, the house is now worth nearly triple what it paid for five years ago.
“There are certainly things about this complaint that are particularly strong,” said lawyer for the couple, Julia Howard-Gibbon of Fair Housing Advocates of Northern California. “They got out of the house, basically.”
While similar cases with extreme differences in appraisal values ​​have also surfaced in Oakland, Stockton, and other cities in California with large black populations, the new trial revolves around North Bay’s unique racial dynamics.
Austin knows firsthand that Marin City, an unincorporated area wedged between wealthy Sausalito and Mill Valley, was born out of the pre-World War II migration of tens of thousands of black workers seeking employment around the Sausalito shipyard. His own grandparents lived and worked there. Although they saved the money to relocate to other areas of Marin County, Austin said in his October testimony that they were unable to purchase property elsewhere due to practices exclusions such as discriminatory bank loans and race clauses.
The fact that his family encountered what appeared to be a new version of the same old problem more than half a century later, he said in the October meeting, made him ill.
“My stomach hurts, my head hurts just because of what we’ve been through,†Austin said. “I don’t wish that on anyone.”
Lawyers for the couple argue in the retrial that “Marin City has a long history of undervaluation based on stereotypes, red lines, discriminatory assessment standards and real or perceived racial demographics.” Focusing the first appraisal only on the small number of homes sold in the immediate Marin City area, Howard-Gibbon said the appraiser “built an invisible barrier” around the home by comparing it only to other prices. sales in an area long marginalized – an outcome she called “recycled discrimination”.
The plaintiffs seek a jury trial, financial damages and a court order directing the assessors to take steps to ensure that the issues raised in the complaint do not recur.
Austin said in the October meeting he was also focusing on ongoing issues like the recent desegregation orders issued for Marin County schools. He still can’t help but notice that neighbors’ homes on smaller lots have already reached values ​​of around $ 1.6 million or $ 1.7 million.
“Yeah, I want to see a change,†Austin said. “I don’t want my kids to have to deal with this.”
Lauren Hepler is a writer for the San Francisco Chronicle. Email: lauren.hepler@sfchronicle.com Twitter: @LAHepler
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