TRENTON – In an effort to combat discrimination in property appraisals, the Senate Community and Urban Affairs Committee advanced the “Fair Appraisals Act.” The legislation sponsored by Senator Nellie Pou and Senator Troy Singleton would prohibit appraisal professionals from discriminating against individuals on the basis of the actual or perceived race, creed, color, national origin or other characteristic listed pursuant to the “Law Against Discrimination” during the appraisal process of a residential property.
The bill would also clarify enforcement of discrimination in housing appraisals, whether that discrimination is shown toward the property buyer or property seller.
Under the bill, S-777, appraisal professionals found to be engaged in discriminatory practices concerning appraisals of property would be subject to punishment imposed by the New Jersey State Real Estate Appraiser Board, which could suspend the appraiser’s license, certification or registration or levy a fine against the holder that shall recoup the cost of the discriminatory appraisal.
“Sadly, housing appraisal discrimination remains alive and well in New Jersey and elsewhere. As recent research has borne out, appraisals are systematically lower for Black and Latino families than for white families across the country,” said Senator Pou (D-Passaic/Bergen). “This law will help us further protect families from this discrimination and also contribute to lowering the racial wealth gap in our state.”
Based on research conducted by Freddie Mac, which looked at more than twelve million appraisals nationally for home purchases from 2015-2020, properties in Black and Latino census tracts receive appraisal values lower than contract price substantially more than in white tracts.
“Like other forms of racial housing bias over the years, appraisal discrimination strips wealth from families of color, who are not able to enjoy the same financial benefits of homeownership as their white neighbors,” said Senator Singleton (D-Burlington), Chair of the Senate Community and Urban Affairs Committee. “With this legislation, we hope to ensure fair and unbiased home appraisals, which will ultimately help build generational wealth through homeownership equity.”
Nationally there are 78,015 housing appraisal professionals as of 2019 according to the Appraisal Institute. Of the 78,015 over 85 percent are Caucasian or white, 4.3 percent are Hispanic or Latino, and only 1.3 percent are Black or African American.
The bill passed the Community and Urban Affairs Committee by a vote of 4-0.