Black couple's home valuation rose by 50 percent when a White friend posed as homeowner

A Black couple living in the Bay Area believes that race was a significant factor in their house being lowballed by roughly $500K in a home appraisal. Paul Austin and his wife Tenisha Tate Austin found that their house was actually worth hundreds of thousands more than they had been told after a White friend stepped in and posed as the homeowner. Speaking to ABC 7, the couple said they felt like they captured a slice of the American dream when they purchased their Marin City home in 2016. However, they had to face a number of challenges in obtaining the property which was originally built in the 1960s.

"As soon as like a house came on the market, you go in, you put your bid in, and then you get outbid by like, $100,000 or more, rather quickly," Austin said. "That can be a little bit depressing." They ultimately purchased the home off-market from another Black family, who were hoping to make homeownership a reality for a young Black couple. The Austins staged around $400,000 worth of renovations and updates to the house after moving in, adding an entire floor and an additional 1,000 square feet of space.

They also built a deck, new floors, a fireplace, and updated old appliances. Then, they got the home appraised. The property was appraised for $989,000, just $100,000 more than when they originally purchased it, despite the $400,000 they put in for renovations. "I read the appraisal, I looked at the number I was like, 'This is unbelievable,'" said Tenisha. "It was a slap in the face," Austin added. The couple revealed that their appraiser was an older White woman and that the appraisal contains what they believe was coded language, like "Marin City is a distinct area."

Convinced that race was a factor in the appraisal, the Austins immediately called their lender and pushed back. They were approved for a second appraisal after a month of escalating their complaints and when the day finally arrived, they decided to perform an experiment. "We had a conversation with one of our White friends, and she said 'No problem. I'll be Tenisha. I'll bring over some pictures of my family,'" Austin said. "She made our home look like it belonged to her." The second appraiser said the house was worth $1,482,000 or roughly $500,000 more than it appraised for just weeks prior.

Pointing to the nearly 50% increase in value, the Austins said that their experience with the appraiser is symptomatic of a larger pattern of discrimination in the housing market. "There are implications to our ability to create generational wealth or passing things on if our houses appraise for 50% less than its value," said Tenisha. Jessica Lautz, National Association of Realtors vice president of demographics and behavioral insights, agreed that the issue of racial discrimination in the housing market needs to be addressed. "We know discrimination is in nearly every aspect of that home buying process. We need to be addressing it as an industry," said Lautz.

Homeownership, long recognized as a valuable wealth-building tool, remains more common among White families than Black ones. Black homeownership lags across the country with only 44% of Black Americans owning their home in 2020, in contrast to 74% for White Americans. "There are still problems in the housing industry of Black people being steered away from White neighborhoods," said Daryl Fairweather, chief economist at Redfin. "Even though that is technically illegal, or Black people not having the same access to mortgages that White people have." Lautz stressed that closing the homeownership gap is essential to closing the wealth gap in the U.S. and that equity in housing and access to affordable homes must become the central focus in order to make this a reality.