Paul Austin said he felt good as the appraiser roamed his Northern California home last year, ticking off some of the $400,000 worth of improvements he and his wife had made to the property.
The appraiser noted the new fireplace, Austin told a state reparations task force in October, mentioned a room they’d added and complimented the view from the new deck.
So Austin and his wife were shocked when the appraiser pegged the value of their Marin City home in the San Francisco Bay area at $995,000, far lower than previous appraisals.
“It was a slap in the face,” Austin told KGO-TV in February.
Austin and his wife, Tenisha Tate-Austin decided to get another opinion three weeks later, they say in a lawsuit filed Thursday in federal court in San Francisco. This time, they enlisted the help of their White friend Jan who agreed to pretend to be the homeowner for a different appraiser, the lawsuit alleges. The Austins “whitewashed” their house by removing their family photos and stripping the walls of their African-themed art. Jan helped on this front, too, by staging photos of her own family, the lawsuit states.
The new appraisal came in at $1.48 million – nearly a half-million more than the previous estimate.
The Austins, according to the lawsuit, believe the first appraiser, Janette Miller, gave them a lowball valuation because they’re Black. The couple and the nonprofit Fair Housing Advocates of Northern California are now suing Miller and her company, Miller & Perotti Real Estate Appraisals in San Rafael. They’re seeking financial damages and asking the court to order the defendants to ensure they won’t discriminate when appraising houses.
Miller and her appraisal company did not respond to messages from The Washington Post sent late Sunday night. Attorneys with Fair Housing Advocates, who are representing themselves and the Austin family, also did not immediately respond to requests for comment.
Austin told the state reparations task force in October he believes the property was devalued “because we are in a Black neighborhood, and the home belonged to a Black family.”
Other Black homeowners have reported similar experiences. The value of a woman’s Indiana home more than doubled between appraisals last year after she stripped it of all evidence that it was owned by a Black person and a White family friend stood in as the homeowner. Earlier this year, a Black family in Ohio removed family photos, artwork and their 6-year-old daughter’s superhero pictures, replacing them with belongings their White neighbors offered up. The appraised value of their house went from $465,000 to about $560,000.
A 2018 study by the Brookings Institution found that homes in Black neighborhoods in U.S. metropolitan areas were undervalued by an average of $48,000, amounting to $156 billion in losses. Differences in the quality of the houses and neighborhoods didn’t fully explain the gap, according to the study led by Andre Perry, senior fellow for Brookings Metro who studies housing discrimination.
“It’s almost when people see Black neighborhoods, they see twice as much crime than there actually is. They see worse education than there actually is,” Perry told the Indianapolis Star. “I think this is what’s happening when appraisers, lenders, real estate agents see Blackness. They devalue the asset. They devalue the property.”
As for the Austins, they bought the four-bedroom, two-bath house in 2016 for $550,000 when it had 1,248 square feet. Before purchasing, they’d struggled to compete in a hot housing market. But the previous owners, keen on helping a Black couple achieve homeownership, sold them the place off market.
Over the next two years, the Austins spent $400,000 to improve their new home, they say in their lawsuit. They installed new appliances and fixtures in the kitchen and bathrooms. They refinished the hardwood floors, replaced windows and painted the inside.
In May 2018, a new appraisal concluded the house was worth $864,000, according to the lawsuit.
The Austins kept renovating. They added a new foundation and retaining wall, creating more living space on the basement level. They put in a deck and a gas fireplace. They carved out a separate unit, with its own kitchen and bathroom, that could be used as a home office or a rental.
Through all the renovations, the Austins nearly doubled the house’s square footage.
“It was work, but it was exciting,” Austin said in the KGO interview.
In March 2019, the Austins, when applying to refinance their mortgage again, got another appraisal, which pegged the house’s value at $1.45 million, the lawsuit states. Rates kept dropping, so they decided to refinance again in early 2020, which led to the Miller appraisal.
Austin told the panel on state reparations that Miller’s alleged lowball valuation upset him. His grandparents migrated from the South to the Marin City area in the 1940s to work in the shipyards in nearby Sausalito. They tried to move out, Austin said, but segregationist practices trapped them.
Now, some 80 years later, Austin said he feels he’s dealing with vestiges of that racism. He hopes his lawsuit puts a stop to it.
“I do want to see a change,” he told the panel, “because I don’t want to see my children have to deal with this.”