Illinois lawmaker wants to root out bias in real estate valuations

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Discrimination in real estate has taken its toll on families for generations and continues to hurt Black and Brown people. We must take significant steps on the state and local level to stop this undue practice.

That is why I have teamed up with advocates and community leaders to propose the Real Estate Valuation Task Force, an effort that will identify discriminatory housing industry practices and provide recommendations for state action.

Discriminatory behavior is rooted in decisions by the Federal Home Owners’ Loan Corp. and the Federal Housing Administration, agencies that weighed the racial and ethnic composition of neighborhoods when underwriting real estate loans. The effect was that both agencies devalued property or refused to make loans secured by property in communities of color.

When communities are systemically underappraised, homeowners lose equity and are forced to sell for less than what would be expected. It also leads to more housing contracts falling through, as banks engage in a pattern of assessing lower values than the market suggests.

The consequences of depressed values are devastating. Not only do families lose wealth just because of their identity, their communities lose out on resources as well. Lower values lead to lower property tax revenues, impacting school funding, emergency response and other critical services that neighborhoods rely on.

via Crain’s Chicago Business

April 8, 2022 at 06:56AM

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