TAF Is About To Get PAVEd

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The Appraisal Foundation Is About To Get PAVEdThe current administration is addressing the lack of diversity in housing valuation head-on with the formation of an interagency task force on Property Appraisal and Valuation Equity (PAVE).

Here are the details of the PAVE Task Force.

They just had their first meeting and this is a serious effort unlike the silliness of TAF’s bureaucratic actions of the past year that were nothing more than window dressing to the lack of diversity problem within the appraisal industry.

Incidentally, The Appraisal Foundation is not part of PAVE Task Force. Keep that in mind when you read their bat-shit crazy letter again and think about the fact that our industry is 96.5% white and entry standards into this industry are maintained by The Appraisal Qualifications Board of TAF without legal review (to save money, I presume). I can only imagine the questions that will be directed towards TAF by the PAVE Task Force, with TAF the maintainer of USPAP and charged with protecting the public trust.

The very existence of the PAVE Task Force shows quite clearly that the public trust has been obliterated by TAF through its actions over the past three decades. TAF is a not-for-profit run like a for-profit, doing an end-around the original Congressional intent by refusing grants from ASC, the mechanism of oversight. If I were Dave and Kelly, I’d be quite worried. Even their effort to sandbag ASC last year, in what they wrongly assumed was an adept bureaucratic maneuver, by asking Congresswoman Maxine Waters to request a GAO audit but conveniently forgot to include their Appraisal Foundation in the request. I wouldn’t be surprised if the GAO audit outcome disappears in the quagmire of bureaucracy now that PAVE is a top policy priority of the U.S. government.

I’ll get into the PAVE Task Force impact to appraisers in future posts as it unfolds but at first glance, I think this will end up being good for good appraisers as more and more information comes out for a number of reasons:

  • It will marginalize activists who have brought much-needed attention to the lack of diversity but literally do not understand what appraisers do
  • It will reduce the pressure from the AMC industry, whose bad actors emphasize only speed and price
  • It will re-focus emphasis on quality appraisers over AVMs
  • It will help the public better understand what appraisers actually do
  • It will shed light on the diversity issues of AVMs, which are built by human beings

The PAVE Task Force is quite significant to appraisers – it won’t leave us twisting in the wind because:

  • It involves cabinet-level attendance, not for junior officials
  • It has a 180-day deadline to deliver a final action report
  • The ASC is a member of the task force
  • The agencies that comprise the ASC are also a part of it
  • TAF is NOT part of the task force

The PAVE Task Force membership is comprised of the following officials and it is quite a breathtaking list:

Secretary of Housing and Urban Development (co-chair)
Assistant to the President for Domestic Policy (co-chair)
Director of the National Economic Council
Attorney General of the United States
Secretary of Agriculture
Secretary of Labor
Secretary of Education
Secretary of Veterans Affairs
Comptroller of the Currency (OCC)
Chairman of the Board of Governors of the Federal Reserve
Chairman of the Federal Trade Commission (FTC)
Chairman of the Federal Deposit Insurance Corporation (FDIC)
Chairman of the National Credit Union Administration and the Federal Financial Institutions Examination Council
Director of the Consumer Financial Protection Bureau (CFPB)
Director of the Federal Housing Finance Agency (FHFA)
Appraisal Subcommittee (ASC)

Jonathan Miller
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Jonathan Miller

Jonathan Miller

Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.

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13 Responses

  1. Baggins Baggins says:

    The possibilities for new and innovative government intervention in the real estate markets appears endless.

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  2. Avatar Seneca says:

    Some points that the committee will miss or fail to discuss. This is not a hire employees industry. 70% of appraisers are one person shops. A large number of us were trained by a family member or a close friend. Just these two stats alone explain why we are 96% white. There is no doubt it could still be described as a “Good ol’ Boy” industry through no fault of our own. It is the way the qualification were designed. No one wanted to waste two plus years on an apprenticeship to have them quit or become your competition.

    In order to get diversity in the industry the training would have to become a classroom setting as like an associates degree with internships. That way they can throw “for minorities only” scholarship money around with the hopes people will bite.

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  3. Avatar Metro appraiser says:

    The pave task force is barking up the wrong tree. This has nothing to do with TAF and black and white. The current state is due to the failures of leadership and others to band together to combat HVCC now Dodd frank as well as all the other crap that has been thrown at the profession.. These two bills led to the demise of the profession and the loss of great appraisers who simply went elsewhere while giving rise to amcs to prey off the appraiser.

    Fast forward to today and the constant BS appraisers deal with from AMCS who couldn’t manage a high school lawn mowing company properly, as well as all the regulations, and now predatory AVM companies, here we are. Someone needs to be blamed and its once again the appraisers. If PAVE wants changes then they need to go back and look at history. Look at the laws put into place, the education requirements and more.

    The Ax Miller wants to grind with AI and TAF are his own, There is a much bigger picture to look at and when the opportunities were there to make change… no one did a damn thing.

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  4. Avatar Digs says:

    In terms of residential, I still do not understand why someone would want to do it. The education investment, the experience investment, the back-breaking liability, no benefits, all to end up with a job where one has to seemingly work more for less year after year. In my opinion, in most areas, the income potential is just not there. Compensation does not match the hard work. Sure it sounds good to work from home with no boss – but then one gets older wants a home, maybe a family,,, Sorry the income potential is just not there anymore.

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    • Avatar Seneca says:

      Other than no benefits nothing else you say is true. It is very minimal education investment. $2,000-$2500? My state lowered the apprenticeship to only one year. So you can be an appraiser in about 13-15 months. Been appraising for 30 years and liability has never been an issue. What’s the worse they can do? Take you license? Darn, now I don’t get to be an appraiser. Income potential has never been greater. Name a two year degree that makes $80K out of the gate with a growth of double that in a few years? If you have a spouse with benefits then you’re all set.

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      • Avatar Digs says:

        Yes, I am making it all up. Perhaps not true for you, but that’s how it is in my area. I’m part of an appraiser group here and we try to meet once a month and are very candid about our businesses. We have known each other for 15+ years. While we don’t get into exact numbers, no residential only is earning 80k. Of course that could change this year, but this is not the norm. Plus if you lose your cert after 15+ years in business its not as easy as it seems to make a transition to something else. 80K out of the gate? Over here NEVER gonna happen. Also not sure how an associates degree (at a minimum) plus appraisal classes are only $2,000 – $2500.

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        • Avatar Seneca says:

          I agree, A Two year assoc degree would probably cost $20,000. The $2000-$2500 is for classes to become an appraiser today. This debunks the education investment. Two year assoc degree vs 13-15 months debunks the experience investment. 1 appraisal a day x 5 days a week x 50 weeks = well over $80k. Not sure where your area is at but it must one of those anomaly areas that is not indicative of the rest of the country.

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          • Baggins Baggins says:

            Assumptions. A properly formed appraisal under challenging circumstances can take days. Continued education can have a high cost if one is busy working. I’m like, why volunteer for the abuse. Reality check is when people finally realize the racial makeup of the appraiser does not affect the influences which from value is extrapolated. Perhaps a larger government will help.

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            • Avatar Seneca says:

              Yea yea Baggins. You said years ago how you spend a whole week to develop one appraisal and how you call NASA to get data on the position of the sun and moon so you know the effects of the shadow of the street light in front of the house.

              Continuing ED is not high cost. $350/yr at most. Takes two days to complete. Digs says he’s not busy, he has plenty of time.

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    • Avatar Pamela says:

      I’m an Appraiser in the Greater Cincinnati area. This just hit the news here. Linking to a news article where PAVE is mentioned, and a quote from AI’s Rodman Schley.

      https://www.wcpo.com/news/our-community/this-black-familys-home-appraisal-grew-by-92-000-after-they-removed-all-signs-of-their-race

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  5. Avatar Mary says:

    Only 1 good thing I see from PAVE, which was noted, is that all these HIGH ranking officials will actually begin to see what Appraisers actually do and then leave us alone (MAYBE). They have NO clue! How many times do you have to tell people APPRAISERS do not determine value, Buyers do and Buyers are many times represented by Realtors. So lets talk to them about why certain neighborhoods are valued lower? Why is that? I think once the higher ups see what we do including our liablity, they should say HEY, these professionals are WAY under paid. I say double our fee that would be more in line with what we do and our liablity and now they are going to pile on more education to the mix after PAVE gets done thinking that will cure the problem … NOT! I am so done with this. Glad most of what I do is personal appraisals where they really care only about 1 thing. What is my home REALLY worth so I can sell it or what is that home really worth before I buy it. They trust in the expertise and the unbiased opinion of value since we have nothing to gain in any of these transactions, unlike Realtors, Lenders, AMC’s.

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  6. Baggins Baggins says:

    Efforts like PAVE will inevitably lead to higher price points for all real property, price differences will somehow need governmental correction if there is a race factor involved, location vs location. Once this illusionary idea of mandated value balance is achieved, the markets will react, the balance will shift again, more intervention will be needed.

    We can save this PAVE panel a lot of time; skip the re engineering of the appraisal valuation development process, move on to community investment, financial education for better credit access, jobs creation, area amenity, safe living conditions, urban renewal projects. The presence of or lack of these factors within a community is what drives the value of individual locations, the price follows. Appraisers measure the market, they do not create value or set price benchmarks.

    Some urban renewal projects in CO worked and worked well. What used to be very rough areas are recovering, improving home values and neighborhood qualities, renewed attention from investors and builders, reductions in crime, as a result entire regions improved. People just need something to get behind. There are ways to accomplish these goals without increasing taxes, without having to re engineer entire industries, without using the force of government and regulatory powers. Keyword; urban renewal.

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TAF Is About To Get PAVEd

by Jonathan Miller time to read: 2 min
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