Vice President Harris on Thursday announced a new rule to require financial institutions to ensure their home appraisal algorithms are not contributing to racial bias in home valuations.
The rule, subject to a 60-day public comment period, aims to establish quality control standards to help ensure accuracy and fairness for Automated Valuation Models (AVM), the algorithmic models used to assess the value of homes.
AVMs would have to adopt policies and safeguards to protect from data manipulation, avoid conflict of interest, and conduct random sample testing.
Harris also announced actions to expand the ability of consumers to appeal what they suspect to be a biased valuation. Agencies plan to issue proposed guidance on how financial institutions can integrate reconsiderations of value policies.
“Systemic change is needed,” Harris told reporters, sharing a story of a Black family whose home was appraised higher when their photographs were replaced with a white family’s.
Additionally, the administration will update a public data set on home appraisal records, adding 600,000 more records to the 48 million records that have already been made public. And it will call on states to reduce unnecessary barriers to be an appraiser in an effort to increase the number of people of color in the profession. Only 5 percent of home appraisers are people of color, Harris noted.
The administration is publishing a dashboard to show which states have education and experience requirements to be an appraiser and will push for more anti-bias training in the profession.
The announcements on Thursday build on President Biden’s creation of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE), which he announced two years ago on the 100th anniversary of the 1921 Tulsa Race Massacre.
Source: The Hill