The Chicago Urban League Appraisal Bias Task Force

In September 2023, the Chicago Urban League convened an Appraisal Bias Task Force of appraisers, public officials, bankers, mortgage lenders, realtors, realtists, researchers and non-profit professionals.  The group was formed around the need to address concerns about appraisal bias and wide disparities in valuations of similar homes in different parts of Chicago.  We were aware of the PAVE Report done by the U.S. Department of Housing and Urban Development, the statutory commission formed by the State of Illinois and a pilot initiated by the Appraisal Institute and the National Urban League. The PAVE report focused on federal actions, and the state commission had not issued a report at the time of our first meeting.  We also made a pledge to build on the efforts of others and not duplicate efforts.

The Task Force, chaired by esteemed real estate professional Frank Williams, has met monthly since November 2023. As of May 2024, the task force has made some observations that are relevant to our 2024 Policy SUMMIT convening.  We have outlined them below.  The Task Force is expected to issue a final report before the end of 2024.

Preliminary Findings from the Appraisal Bias Task Force

1. The concern about appraisal disparity is driven by the desire to ensure that there are no barriers to Black people’s efforts to gain wealth through homeownership. Appraisal bias is a symptom of the much larger issue of homeownership; given this, there might be a better name for the task force.

2. The root causes of racial disparities in homeownership require complex analysis. Present-day disparities are colored by centuries of segregation in employment and housing, redlining, and other practices sanctioned and protected by government and industry officials—a reality that makes the search for meaningful solutions even more challenging and multi-faceted.

3. No one industry is responsible for addressing the racial disparity in homeownership. It is important to engage bankers and other mortgage lenders, appraisers, realtors, realtists, appraisers, appraisal management companies, consumers, regulators, and public officials to provide comprehensive improvements in homeownership in the Black community.

4. Improving diversity and cultural proficiency in the appraisal industry would improve confidence in the appraisal process. This will require a concerted effort to get individuals into the career pipeline and address barriers to entry to the field.

5. Many consumers do not understand the appraisal process, leaving many to assume that lower values are evidence of discriminatory conduct when it can be evidence of appraisal mistakes. This makes consumer education through a variety of mechanisms a worthwhile endeavor.

6. The process for appealing an appraisal that is believed to be erroneous is fraught with challenges that could be solved by a more consumer-friendly process driven by community and industry collaboration.

Task Force Members

Frank Williams, Chair

Lutalo McGee, Project Manager

Karen Freeman-Wilson, CUL President & CEO

Ramona Brooks

Calmetta Coleman

Felton Ellington

Paula Grantt

James Harris Jr.

Kelwin Harris

Roberto Interiano

Fritz Kaegi

Lionel Kimble

Cecelia Marlow

Robert McGhee

Loretta Minor

Kimberly Nevels

Tiffany Odeh

Kimberly Offord

Robin Palmer

Christopher J. Posey

Deanous Reid

Desiree Ribeaux

Donna Robinson

Stephanie Robinson

Jill Skelton

Pamela Stalling

Fosta Wilson