Systemic Racism is unfortunately still a thing...
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https://twitter.com/brentinmock/status/1309120342628225027?s=21
Found this pretty interesting while horrifying at the same time.
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https://twitter.com/brooklynmarie/status/1305553553625243648?s=21
This is gross and bad. It’s so frustrating that an entire subset of this country refuses to acknowledge the humanity of people who don’t look like them.
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Clearly I’m in a good mood…
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@benshawks08 said in Systemic Racism is unfortunately still a thing...:
https://twitter.com/brooklynmarie/status/1305553553625243648?s=21
This is gross and bad. It’s so frustrating that an entire subset of this country refuses to acknowledge the humanity of people who don’t look like them.
This one could be a stain on the Trump administration long after he’s dead and rotting in his grave. The facts will come out and history will not be kind.
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The CRA was a bad piece of legislation in hindsight. Very well intentioned, but its effects were disastrous. Including being a main driver of the crash in 08.
Extractive policing is also bad. See Missouri, Ferguson. A simple fix is just to cap the percentage of their revenue municipalities can get from fines and the like or making all law enforcement live in the community they serve. 10% seems like a good number. Would be a heck of a tax cut in a lot of places, and would significantly cut down on the stupid, minor tickets people get for dumb stuff like playing their car radios too loud. Radley Balko and Reason Magazine’s work here is quite informative.
I’ll be very interested to see the outcome of a legitimate investigation on the last topic. The AP couldn’t find evidence that it was widespread or systemic (though it goes without saying any kind of forced procedure is bad.) I don’t think we have enough to say with any degree of confidence this was anything approaching the headline. But this is why we have IG’s. That’s a sticky issue too. I was on the Hill when we had the unaccompanied minors crisis in 14. Congress and POTUS were clear that it was a very bad idea for people to cross the southern border because they would be detained and probably sent back. And we didn’t have anywhere near the capacity to handle the influx of kids. So that was kind of the start of the “zero tolerance” policy where we didn’t let people out on their own, hoping they’d come to their hearing because they’d inevitably ditch the ankle monitors and disappear into the ether. It was a bipartisan attempt to A) deal with those who were here so we could send them back more efficiently and
send the signal that coming was a bad idea. Because it was a crisis and we had to something. It was far, far from perfect but everyone felt it was our best option at the time.
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Having gone through about 12 appraisals, I think the attack on appraisers is misplaced (with one exception noted below). People don’t understand the purpose of appraisals: it is solely to assure a lender that a home can be readily resold at a price that covers the outstanding debt in case of default and foreclosure. The only way to do that is to evaluate the house against others in the same neighborhood.
Values in those neighborhoods are definitely lower in minority neighborhoods due to both past and current racism. Redlining by banks and insurance companies, racial covenants, and broker racial preferences all have been outlawed, but their effects last today in lower values that do get identified in appraisals.
One comment to that tweet caught my eye because it was something I said in my first purchase: basically, shouldn’t an appraisal reflect what someone is willing to pay? The answer is yes, but an aberrantly high price does not reflect what the market as a whole will pay in the NEXT transaction, not this one. We put more down than was initially required because of certain aesthetics that were very appealing to us (i.e., virtual forest in back yard), but not worth much in comps, and the sale went through. This kept the sale price the same, so helped neighborhood prices stay higher, but not everyone buying a home can come up with an extra $7G. Often a low appraisal results in lower prices, and that tendency self-reinforces.
I do hold appraisers responsible for maintaining racial neighborhood disparites when they are unwilling to go beyond nearby boundaries between suburbs and cities, or when they exclude new developments nearby because of the entirely different “character” between new and older homes. Those differences often track demographic disparities, and prices are lower when higher nearby homes are arbitrarily excluded.
Perhaps appraisers should be required to do comps of all homes in a 1/2 mile radius. (It will still be hard to decide what to do, though, for the best house in a really depressed neighborhood.) Until people are willing to buy at prices higher than appraisals reflect, I am at a loss for what appraisers can do to eliminate demographic price differences. Their jobs literally depend on tracking existing prices, not ideal ones.
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@mayjay See, to me the point of that article was that THE WHOLE system is racist because it’s based on all the racism you outlined. Even the market itself is racist because white people will pay more to segregate themselves with other white people. Appraisers are part of that system. There are things they can do to address the racism in their field within their level of influence. They should do that.
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Price controls for daaayyyzzz
But seriously, repeal basically all zoning codes and flood the market with affordable housing and decouple property values from schools and bingo
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@benshawks08 That just repeats the article’s criticism, but saying “there are things they can do as appraisers” doesn’t present specific ideas.
So, like what, exactly?
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The obvious answer is appraisers should add 20% appraised value to every black-owned home, but freeze taxes on it for reparations.
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@mayjay “ Jeff Sherman, president of the Appraisal Institute, an international real estate appraisers’ professional association, declined to comment on the new research because he hadn’t reviewed it, and said he wasn’t aware of prior studies about this problem. He did know about a 2018 study from the Brookings Institution on the devaluation of properties in Black neighborhoods, he said, because the institute testified at a congressional hearing on the subject. He said he doesn’t see systemic racism in the industry, and that the leaders and members of his organization haven’t discussed racial disparities.”
They could start by recognizing there’s an issue and ya know, discussing it. Can’t come up with a solution if they’re happy pretending there’s not a problem.
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@FarmerJayhawk Not a terrible idea…
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@benshawks08 of course the market wouldn’t clear at that price and the black owners would be stuck with a home they didn’t want unless the price fell and we’re right back where we started and nobody’s happy
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@benshawks08 You said there are things they can do. I suggested one. I have seen no ideas from you except they should talk about it.
Their saying they do not believe the appraisal industry is systemically racist is not the same as them being “happy” that racial discrimination exists in the values of homes. But their job is to evaluate home value.
Again, please propose a solution other than say they should solve it. They certainly need to identify appraisers using race to reduce value. But it is already illegal to do that. What other tools do appraisers have? Other than @FarmerJayhawk’s facetious idea of artificially inflating values, which would lead to huge market distortions for the most financially vulnerable homeowners–and renters as well.
You know where my sympathies lie in civil rights battles, but this is an outrage without a (current) cause. Blaming appraisers is literally blaming them for comparing prices.
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@mayjay ah yes, me the high school teacher will certainly have the solution to a complex problem in an industry I know little about. Seems to me experts discussing the issue would probably come up with something better. It’s not wrong to expect people to address major issues of inequity in their own industry.
It is completely irrational to think the only way to change things is to propose a solution. Solutions start with identifying a problem. If simply comparing prices is contributing to the vast financial disparity between racial groups perhaps thinking of a different way might be in order.
It’s not about attributing blame but instead taking responsibility. It’s not a current appraisers fault, but that doesn’t mean it isn’t their problem. Just like inequitable school discipline isn’t my fault but is my problem. One I discuss with my colleagues so we as educators can come up with ideas to address it.
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I think the solution is looking at what factors drive home prices. Build a simple model and figure out what levers we can pull in policy. Like I mentioned earlier, school districts influence home prices (which to me is bad policy). So decouple them. Put a small lid on the amount of local money that can go to local schools. Anything above that goes to the state for redistribution. Exclusivity of the neighborhood (read: zoning) does as well. Either get rid of zoning or drastically cut the minimum lot size. Preferably both. Encourage mixed development in the suburbs. If we want diverse communities, allow people to build diverse types of housing in those communities. I can’t stand most of JoCo (sorry for anyone who lives there, not my jam) because there are too many freaking cul-de-sacs and you have to drive so freaking far to get anywhere. Do Enterprise Zones to encourage investment in blighted areas with a surtax on low density development if you want. There are plenty of ways to do it, we just have to be creative and break out of the old mold. There are positives and negatives to all these things, just trying to throw some potential solutions out there.
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@FarmerJayhawk How does one go about decoupling housing from schools? Does the cap on funding do that?
I know for example austin isd already sends a lot of its funding from property tax back to the state for redistribution. Would what your suggesting be more of that?
I certainly agree solutions will need to be out of the box, rethinking the system from the ground up kind of things. I just don’t know enough about the housing market to even know what would work.
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@benshawks08 it definitely helps! Local property taxes fund local schools to varying degrees. In Kansas (I don’t know about Texas’s mechanism in any detail), there’s a statewide 20 mil levy that goes into the state coffers, laundered through the state formula, then sent back to districts. Districts can go above that amount (it’s about another 10 mils) to fund local school programs.
Generally, schools are residentially assigned. So students are assigned the school they live closest to. It stands to reason that the “best” schools in the garbage online ratings you find are in the most expensive (generally white, upper class) neighborhoods. So people move to those neighborhoods based on what really is a student composition, not school quality, metric. This drives up home prices, and the cycle starts again. The key is to break the link between home values and what we see as school quality.
There are a bunch of ways to do that, like redrawing district lines, getting rid of zoning (or at least minimizing NIMBYism), and allowing for quasi-random or citywide choice (e.g. Denver) school assignment. The optimal solution depends on the local situation.
I think there are good solutions people on the left and right will agree with in improving the status quo. Because we both agree the status quo is unacceptable.
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@FarmerJayhawk It’d be cool if those things work but I do worry about a lot of folks inherit racism just totally mucking up any free market solution. Have you listened to “nice white parents” podcast? I’ve only gotten a few episodes in but it definitely speaks about school funding and specifically school choice as that’s huge in New York apparently. I almost lost my mind when at one point the person reporting drops the stat that one schools pta raised $800,000 compared to $2,000 at another. It’s an interesting glimpse because it’s focusing on white parents trying to integrate New York’s very segregated schools. I can only listen to so much serious stuff after a week of online teaching so I haven’t finished it yet. Shit is draining.
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@mayjay My complaint isn’t about the idea that appraisers should contribute to solutions. My issue is calling the appraising industry racist because they do not perceive themselves as the problem.
As your discussion with @FarmerJayhawk reveals, housing involves very many social, political, and economic factors beyond how someone evaluates worth. The problem is systemic, but attacking appraisers as the cause is absurd. They cannot magically influence the political, social, and attitudinal solutions you and he have discussed.
Incidentally, I spent 22 years in federal jobs in Washington DC. Most of the support staff in every office were Black, and about 90% lived in DC proper. Over the years there were many discussions about racism, bias, racial perceptions, housing conditions in many neighborhoods, etc. A big issue was “gentrification”: the perceived uplifting of neighborhood home prices, and overall conditions, in previously blighted areas where bargain-hunting Whites were moving in. Some Blacks loved it because their prices rose as the neighborhood houses were renovated. But others, especially renters, were eventually driven out of areas their families had lived in for generations. (This actually also occurred where wealthier Blacks moved in and improved houses throughout the neighborhood, but the perception of the cause was largely divided along racial lines in the people I talked with.)
One woman, who said she found new bullet holes in her fence just about weekly, kept telling me to move to her neighborhood: I remember “Gentrify me, please!” Others got pissed at her.
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@mayjay Black people certainly are not a monolith who all have the same desires and beliefs so yeah simple solutions will not work.
My complaint is if everyone thinks like the appraiser in the article that well it’s not really our problem, nothing is going to change. It’s going to take all of us. To me at this point, if you aren’t thinking about how your industry is contributing to systemic racial inequity and trying to actively promote equity, than what are you doing?
As you and @FarmerJayhawk illustrate, the issue is so vast and multifaceted it’s impossible for one organization to solve on their own. To promote a more equitable society takes a MASSIVE collaboration between government, community, and industry. If a person in a leadership role can look at those massive disparities and think, meh, not my problem, than I don’t have much use for them honestly. Just get out of the way and let someone who cares lead. I get that it’s hard to think about because of all the variable you rightly raise but to refuse to address it is in my opinion immoral.
