When purchasing homes, African Americans often face discrimination that is built upon years of systemic racism and gross inequities in housing.
Home ownership is a pathway to establishing wealth in the United States. However, in competitive housing markets some of the most expensive homes in the country are out of reach for Black residents who find it difficult to even navigate the process when they can afford to.
That is what happened to San Francisco Bay area couple Paul Austin and his wife Tenisha Tate Austin.
The Austins bought the home off-market from another Black family, who were hoping to help another Black couple make homeownership dreams a reality.
After moving in, the Austins staged major renovations costing nearly $400,000, according to an interview with the couple for an ABC7 in San Francisco. The couple added an entire floor, more than 1,000 square feet of space, a deck, new floors, a fireplace, and new appliances.
When they were finished, they got the home appraised.
The home appraised for $989,000, or just $100,000 more than what the Austins got it appraised for prior to their renovations.
“It was a slap in the face,” said Austin.
“I read the appraisal, I looked at the number I was like, ‘This is unbelievable’,” said Tate Austin.
Their appraiser was an older white woman. The Austins believe race was a factor in her estimate.
The family pushed back and immediately called their lender requesting a second appraisal. After a month of escalating complaints, the Austins were awarded one, but vowed this one would be different.
“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 home appraised for $1,482,000, nearly $500,000 more than it appraised for just weeks prior. That was equal to a nearly 50% increase in value.
The couple was furious. They believe this is yet another ugly example of systemic racism in the United States.
“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 Tate Austin.
Experts in realty agree. “We know discrimination is in nearly every aspect of that home buying process,” said Jessica Lautz, National Association of Realtors’ vice president of demographics and behavioral insights. “We need to be addressing it as an industry.”
According to real estate brokerage firm Redfin, in 2020 only 44% of Black Americans owned their home compared to 74% of white Americans.
President Joe Biden has proposed plans to help increase home ownership among African Americans. These plans include incentives that will reduce and prevent redlining as well as tax cuts.