Acting Gov. Tahesha Way on Monday signed a new law aimed at cracking down on discrimination in the housing market by preventing racial bias in home appraisals. The law explicitly prohibits discriminatory practices in real estate appraisals and requires appraisers to complete anti-bias training.
NJ Spotlight News spoke with Laura Sullivan, director of the economic justice program at the New Jersey Institute for Social Justice, about the law and its implications.
“Homeownership is one of the largest contributors to the racial wealth gap, because most families in the United States build wealth through homeownership,” said Sullivan.
Studies have shown homes in Black and brown neighborhoods get undervalued compared to those in communities considered white, a factor that’s largely contributed to both who owns a home and the racial wealth gaps in both New Jersey and nationwide.
“Here in New Jersey we have about … a 35% gap between homeownership rates of white families and Black and Latino families,” she continued. “About three-quarters of white families in New Jersey own their homes compared to about 40% of Black and Latino families. So, we have this major gap in who owns a home.
“But we also have gaps in the financial benefits of homeownership. So when families are able to become homeowners, because of appraisal discrimination, because of barriers to fair lending, and because of other factors, we see that families of color benefit less financially from homeownership, and appraisal discrimination is a major contributor to that.”
New Jersey Attorney General Matt Platkin in January announced a directive to address discrimination in home appraisals by issuing more enforcement guidance, among other resources.
“We really think that … this public education, so that folks can identify when they’re facing appraisal discrimination, is really crucial,” Sullivan said. “And then they can report those experiences to the [state] Division on Civil Rights, who can investigate and do enforcement.”
