Neighborhoods, Race, and the Twenty-first-century Housing Appraisal Industry

Abstract

The history of the U.S. housing market is bound up in systemic, explicit racism. However, little research has investigated whether racial inequality also persists in the contemporary appraisal industry and, if present, how it happens. The present article addresses this gap by centering the appraisal industry as a key housing market player in the reproduction of racial inequality. Using a census of all single-family tax-appraised homes in Harris County (Houston), Texas, the authors examine the influence of neighborhood racial composition on home values independent of home characteristics and quality; neighborhood housing stock, socioeconomic status, and amenities; and consumer housing demand. Noting that substantial neighborhood racial inequality in home values persists even when these variables are accounted for, the authors then use ethnographic and interview data to investigate the appraisal processes that enable this inequality to continue. The findings suggest that variation in appraisal methods coupled with appraisers’ racialized perceptions of neighborhoods perpetuates neighborhood racial disparities in home value. The authors conclude with suggestions for future research and policy interventions aimed at standardizing the appraisal process.