Truisms – Taxes, Death… and Bias Training
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Folks, I attended the ACTS Conference in Bay St. Louis, MS, sponsored by National Association of Appraisers, last week.
While there, enjoying the interactions of ~150 attendees, a primary topic of conversations and presentations was the impending impact to appraisers regarding anti-bias training and bias attitudes.
The onslaught of negative news articles, and legislation at state and federal venues was a direct result of the ‘hijacking’ of the Congressional Hearing in 2019 which was supposed to focus on “Appraisal Modernization.” Instead, a researcher from the Brookings Institute slammed appraisers during the Hearing for causing valuation differences in certain parts of this country, primarily in urban cities where for decades lenders and city administrators and others promoted and demanded people live and do business in certain areas, and not in others. Intermingling was not condoned or approved. Appraisers had and have no direct input on those mandates….which frankly have been an ugly and depreciating period in our history.
Meanwhile, appraisers are charged with determining property values when doing appraisals – which are (or should be) based on similar properties in age, design, quality and condition, etc., nearby to the subject. But from what I’m seeing in various media, those who know little about the appraisal process seem to think that appraisers should pick more valuable properties as comparables just so the subject being appraised can have a higher appraised value.
The appraiser panelists at the Congressional hearing were caught flatfooted and off guard. Because they didn’t know what was to be said by the Brookings researcher, they had no responses to try to disprove the negative. Since then, various news articles have had a deleterious effect on appraisers when the primary accusers have been one race and the appraiser was a different race. This is not to say that the actual, unobserved and un-reviewed, original appraisal reports had potentially serious issues with their processes or outcome. But the damage has been done. Now, appraisers have conspicuous targets on their backs, fronts and sides.
So what’s been happening since the 2019 Hearing? Well, the State of New York, with input FROM appraisers, has had a new law approved which mandates an initial 7 hr CE anti-bias training class for all licensed appraisers, and those who are aspiring to become appraisers. This is followed by a 4 hr CE class on the same topic EVERY LICENSE RENEWAL CYCLE thereafter.
It is very likely that other states will also modify their appraisal license renewal CE class requirements to include some form of anti-bias training. I would encourage all state appraiser coalitions and other associations to be pro-active on this, to get ahead of the curve so that any mandated ‘training’ does not consume a high percentage of the license renewal CE hours.
I have advocated that this training should be included within the USPAP Update course so that additional training hours can be preserved for other important knowledge classes. But that may not be possible if more states mandate anti-bias training independently from USPAP.
At the Federal level, as reported in the Lee’s Summit Tribune, United States Representatives Emanuel Cleaver, II (D-MO) and Ritchie Torres (D-NY), Co-Chairs of the Congressional Black Caucus policy group on Child Poverty, Housing, and Community Reinvestment, introduced the Real Estate Valuation Fairness and Improvement Act to combat disparities in America’s residential and commercial real estate appraisal industry.
If approved, this Act would:
- Establish and convene an interagency Task Force on Real Estate Valuation, consisting of agencies and other relevant entities, to evaluate and respond to racial disparities in real estate valuations;
- Direct the Task Force to submit, within two years and periodically afterward, reports to Congress detailing findings and actions taken by the Task Force to improve real estate property valuations;
- Require the Task Force to establish an advisory committee, consisting of civil rights advocates, consumer advocates, industry representatives, and other stakeholders, to provide advice to the Task Force; and
- Authorize a federal grant program to promote diversity and inclusion in the appraisal profession through scholarships, training and education, implicit bias training, and other activities as deemed appropriate.
So this is the new appraisal and appraising landscape. Better get used to it. It’s being supported by the Appraisal Institute and REVAA, the lobbying organization for AMC’s, among others.
Unfortunately for those with a level of internal bias towards others, this will be very uncomfortable. I’m hoping those negative attitudes can be modified.
It will also be difficult for appraisers who implicitly understand our responsibility to be unbiased when doing real property appraisals and work diligently to preserve the public trust we are charged with upholding by doing our work properly. Just as in all other aspects of society, a small minority has caused conflicts, yet those who perform properly take it on the chin.
As the subject line of this essay says, Bias Training is the new ‘hot button’ truism issue for appraisers. It’s not going away.