Neera Tanden Remarks to Press on PAVE Anniversary
As Prepared For Delivery:
Thank you, Vice President Harris for the introduction and for your leadership on this important issue. And hello, everyone. It’s great to be with you all for my first press call as Domestic Policy Advisor.
Two years ago today, President Biden visited Tulsa, Oklahoma, on the anniversary of the Tulsa Race Massacre—a horrific, violent event in American history that set back wealth and opportunity for so many Black Americans and whose effects still reverberate today.
It was a moving and appropriate setting for the President to announce the creation of the Interagency Task Force on Property Appraisal and Valuation Equity, or PAVE, a first-of-its-kind interagency effort to root out bias in the home appraisal process.[1] We know that for too long, such bias has limited returns on many homeowners’ investments.
Homes in majority-Black and Latino neighborhoods are roughly twice as likely to be appraised at values less than the contracted price—what the buyer is willing to pay—relative to homes in majority-white communities, according to a recent study of 12 million appraisals.[2] And another recent study found that white-owned homes are more likely than Black-owned homes to be appraised at values that exceed algorithmic predictions.[3]
Today, the Biden-Harris Administration is announcing a set of meaningful actions to ensure that every American who buys a home has the same opportunities to build generational wealth through homeownership.
Vice President Harris discussed some of these actions in detail—namely, key steps we are taking toward preventing algorithmic bias in home valuation and empowering consumers through reconsiderations of value.
In addition, we are bringing sunshine to home appraisal bias. We’re leveraging federal data to increase transparency, inform policy, aid enforcement, and facilitate research on appraisal bias.
In October 2022, the FHFA published the nation’s first publicly available dataset containing aggregate statistics on appraisal records.[4]
FHFA will update its publicly available appraisal datasets with new appraiser data later this month. And HUD will make its Federal Housing Administration appraisal data publicly available later this year.
Finally, we are working to broaden the pipeline of appraisers so that this profession is more representative of the communities that it serves. The appraisal profession is among the least diverse in the country, according to the Bureau of Labor Statistics.
Federal criteria for becoming an appraiser are significant. Many states require higher standards than the federal floor, making it even more difficult for aspiring appraisers, especially among underrepresented groups, to enter the profession. There is no evidence, however, that heightened requirements produce more accurate, ethical, or credible appraisals.
Thus, we are unveiling a new dashboard that shows which states impose requirements to become an appraiser that are more stringent than the federal minimum requirements. We are calling on states to make appropriate changes to reduce unnecessary barriers to entry into the appraiser profession. And we will continue to provide assistance to states interested in reducing these barriers to entry.
Together, these actions will support a multi-pronged approach to tackling the problem of bias in home appraisal, increase homeowners’ returns on their investments, and improve opportunity for all Americans. There is more work to be done. As a new Co-Chair of the PAVE Task Force, I look forward to working with Secretary Fudge and the whole team to advance the Administration’s important fight to reduce home appraisal bias.
Thank you. With that, I will turn it back over to the moderator, Brad.
[1] https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/01/fact-sheet-biden-harris-administration-announces-new-actions-to-build-black-wealth-and-narrow-the-racial-wealth-gap/
[2] https://www.freddiemac.com/research/insight/20210920-home-appraisals
[3] https://www.fanniemae.com/media/42541/display
[4] https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Publishes-New-UAD-Aggregate-Statistics-Data-File.aspx
