Fair Housing Advocates of Northern California and a Marin City couple sued a San Rafael appraiser in federal court for alleged racial discrimination.
Paul Austin and his wife, Tenisha Tate-Austin, both black, were surprised when their home appraisal in February 2020 came in $ 455,000 less than an appraisal in March 2019.
The Austin’s asked for the appraisal because they wanted to take advantage of lower interest rates and obtain additional financing to complete renovations on their home.
Janette Miller of Miller and Perotti Real Estate Appraisers conducted the second audit and is named a defendant in the lawsuit with AMC Links LLC, which hired her to do the job at the request of the Austins mortgage broker.
“We believe Ms. Miller valued our house at a lower rate due to our race and the current and historical racial demographics of where our house is located,” Austin said. “The selling prices that the appraiser chose to use were not right and guaranteed a drop in the value of our home.”
To test their suspicion of discrimination, the Austin asked for another assessment. This time, they took steps to make sure the assessor didn’t know they are black.
They put away their family photos and removed all African or African American art. They also had a white friend greet the appraiser as if she were the owner when the appraiser visited the house.
“The fact that there was an increase in value of almost half a million dollars after they moved out of their home is very strong evidence, in our view, of racial discrimination,” said Julia. Howard-Gibbon, lawyer for Fair Housing Advocates of Northern California. .
Neither Miller nor AMC Links responded to requests for comment on Monday.
The lawsuit clearly shows that there were significant differences between how the two reviewers, both hired by AMC Links, arrived at their reviews.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, mortgage lenders and brokers are no longer permitted to employ or contract directly with an appraiser. Rather, they must contract with management companies such as AMC Links which hire independent appraisers.
“We also think the (first) appraiser took breed into account when she appraised the house by comparing it to sales primarily in Marin City,” said Howard-Gibbon, “rather than a larger radius around it. of the House”.
The lawsuit claims that valuing a home in Marin City using comparisons of other real estate sales located exclusively or primarily in Marin City results in a skewed, race-based valuation of the property.
“Marin City has a long history of undervaluation based on stereotypes, red lines, discriminatory assessment standards and real or perceived racial demographics,” the lawsuit says. “Choosing to use compositions located in Marin City means that the valuation is dictated by those past selling prices, which were the direct product of racial discrimination. “
In his sales comparisons, Miller used three properties in Marin City, two in Mill Valley, and one in Sausalito. The second appraiser used two properties in Marin City and six in Sausalito.
“Pulling comps in the neighborhood of the house and near the house is not in itself problematic, if there are recent comparable sales,” said Howard-Gibbon.
The lawsuit claims that was not the case. He cites Miller as written in her appraisal that she based her appraisal on five years of home sales in Marin City, where no year had more than four sales. As a result, the lawsuit says, Miller’s opinion is fundamentally flawed due to the small number of home sales per year.
The lawsuit also identifies other problems with Miller’s approach. He indicates that Miller’s market analysis was dated and that no sales were more recent than in 2008. This accuses Miller of lowering the valuation per square foot of homes outside Marin. City which she used for comparison.
Miller estimated that she had examined several years of data and determined that homes in Marin City were ‘conservatively’ 25% less per square foot than those in ‘surrounding areas’, ”the lawsuit alleges.
The lawsuit claims that two of the three Marin City houses used in the sales comparisons were different from the Austines house.
A study from the Brookings Institution published in 2018 found that homes in predominantly black neighborhoods in metropolitan areas across the United States were rated 23% less than properties in predominantly white neighborhoods, despite quality and amenities. similar.
The response of the evaluators at the time was that their job is to assess the local market conditions, not to create the conditions.
Plaintiffs in the Marin City lawsuit seek an unspecified amount in compensatory damages, statutory damages and punitive damages, in addition to attorney fees and costs.
According to the lawsuit, the Austines suffered “emotional distress accompanied by physical injuries and a violation of their civil rights.” The plaintiffs requested a jury trial.
The case was turned over to U.S. District Court Judge Joseph Spero in San Francisco. The defendants have not filed responses and have no lawyers on the court list.
A first case management conference is scheduled for March 4.