Interview w/ Junia Howell and Elizabeth Korver-Glenn

The 2022 Jane Addams Article Award was presented to Junia Howell (University of Illinois Chicago) and Elizabeth Korver-Glenn (Washington University in St. Louis) for their 2021  Social Problems article entitled “The Increasing Effect of Neighborhood Racial Composition on Housing Values, 1980–2015.” Drawing on decades of data from the U.S. Census, their analysis demonstrates that neighborhood racial composition is a stronger determinant of appraised housing values in 2015 than it was in 1980. Thalia Tom reached out to Junia and Elizabeth to discuss their research, and we’ve included Junia’s responses below. Thanks for participating in our interview series!

  1. What led you to research this topic?

Elizabeth Korver-Glenn and I actually began working on appraisals way before this paper was even thought of. We started working on the topic in 2013/2014 when we were at Rice University. Elizabeth was working on what has now become her Oxford University-published book Race Brokers observing how various actors in the housing market including developers, real estate agents, lenders, and appraisers reinforce racial segregation. In that work, she witnessed how neighborhood racial composition altered appraisers’ evaluation of home values. Yet, at the time, this was not being discussed in the literature—particularly post Dodd-Frank, the legislation after the housing crash that had restructured the appraising and lending processes. On my side, I was working on systems that uphold neighborhood inequality and observing how low appraisal values were leading to failed sale transactions.

Personally, we both witnessed multiple situations among our friends and colleagues where houses in Black and Latinx neighborhoods had received multiple offers, contracts were agreed upon, and then appraisals would come back so low the sale fell through—while the opposite was happening in White neighborhoods. They were getting higher appraisals than the contract prices. Combined, our personal and professional observations led us to begin what has now become multiple years of academic study on appraisals. Our first publication on this topic was a mixed method article pulling together some of Elizabeth’s qualitative work interviewing appraisers and my quantitative work looking at the extent of racial inequality in appraising. That piece focuses explicitly on the Houston area—more precisely, on Harris County, where Houston is located. We found compelling qualitative and quantitative evidence that neighborhood racial composition was systematically driving appraised values. It’s published in Sociology of Race and Ethnicity.

When we were finished with that piece, news media and other academics asked us, ‘is it just Houston, or is it everywhere?’ And of course, we were wondering this too. So, the piece published in Social Problems, started with that question: does race influence appraisals everywhere? As urbanists, we also wondered if the extent to which neighborhood racial composition matter would depend on a city’s level of segregation or historical trajectory. Moreover, as we worked on the project, we became increasingly interested if the role race was playing on appraisals had also changed over time. Specifically, we knew Dodd-Frank had restructured some appraisal requirements, so did that change the racial inequality? And tracing a bit further back, in 1977 federal legislation outlawed the explicit use of race as a justification for an appraised value—had things gotten ‘better’ since then? These were our driving questions coming into this particular paper.

  1. Did you encounter any surprising findings as you conducted the study?

As I just alluded to, we initially were interested in looking at differences across cities. Yet, we quickly discovered there wasn’t many differences across cities. It was a national phenomenon. Of course, it’s not exactly the same everywhere but it’s pretty darn close! How consistent the findings were ended up radically changing the direction of the paper. We began really looking into the national policies and how they have changed, or not changed over time.

This led to the second surprising finding: race matters five times more now in the most recent data that we have than it did in 1980. As the mechanisms upholding racial stratification in appraisals evolved, race became more, not less, salient over time. In the U.S., we love to tell stories of ‘progress’—especially about racial inequality. The old just hold on, we’ll get there, racial inequality is improving and if you are patient enough it will get to equity. And what this is showing is that the opposite is actually occurring.

  1. The ‘sales comparison approach’ to appraisal seems to be an important part of the story of the increasing effect of neighborhood racial composition on housing valuescould you unpack that term for readers who might not be familiar?

The sales comparison approach is the dominant approach within the appraising profession of determining how much a house is worth. How it works is an appraiser evaluates a specific subject property, and then they select comparable sales. It is a similar logic to selecting comparable books when writing a book proposal. Using existing examples to establish a potential market and price. For houses, comparable houses are ideally a similar size, from a similar time, in a similar condition, etc., but also, most importantly, for our purposes and for the purposes of appraisers, a similar location.

Now this was not always the case—sales comparison approach was not always the most common method, nor was it always done this way (that what made something comparable was primarily its location)—but both of those things entered into the mix after the 1934 National Housing Act. Desiring to regenerate the economy, FDR introduced federally insured mortgages. The catch was that properties must be appraised using the new underwriting manual. This manual elevated the sales comparison approach as the approved approach and defined comparable sales as those within a same or racially and economically similar neighborhood.

In the contemporary manifestation, they are still picking recently sold houses in the same or racially similar neighborhoods. This means appraisers a literally pulling the historical sales that were defined by race into the present and they continue to reify these lines by using race as the primary factor delineating neighborhoods from one another.

  1. Rather than simply relying on proportions or absolute counts, your article employs a ratio approach to capture community racial composition. Can you discuss the implications of this approach for the social construction of neighborhood contexts?

That’s a great question and astute reading on your part. Well done. So, obviously, there’s lots of different ways we can measure racial context in neighborhoods. In this case, we are building on our previous work, so we knew that Black and Latinx proportion are the most important and salient factors. And yet, because we weren’t just looking in one metropolitan area (like we had done in that initial piece), but across metropolitan areas, we realized very quickly that we needed a way of comparing that would reflect the social construction of space on the ground.

Experientially, Elizabeth and I had just left Houston and were living in two new cities with radically different racial demographics—her in Albuquerque, New Mexico and me in Pittsburgh, Pennsylvania. In Houston, there are entire census tracts where the ACS counts no White people. This is not the case in Albuquerque or Pittsburgh where the White population is a much higher proportion of the cities. But the neighborhoods with disproportionately high concentrations of Black, Indigenous, and Latinx residents are still conceptualized as communities of color and treated accordingly by appraisers. To capture this social reality, we created a ratio where we were looking at to what extent this neighborhood compared to the metropolitan area would be felt or perceived as a community of color. That allowed us to then standardize or create a normalized measure so that when we did put it into models across the metropolitan areas. It also allowed us to empirically reflect the reality that race doesn’t matter in a naturalistic way. There is no ecological tipping points that implicitly hold meaning. The meaning is socially constructed within its local context.

  1. If you could make one recommendation to policymakers based on your findings, what would it be?

Gratefully, we don’t just have to make one, and it’s not an ‘if.’ We’ve had the great privilege of speaking to many policymakers on this topic. In fact, in June 2021, Biden used this research as a key piece of his housing policy—not only this piece, but our previous piece on this topic. They served as the main theoretical thrust for the PAVE (Property Appraisal and Valuation Equity) Task Force. Biden announced this on the 100th anniversary of the Tulsa Massacre as one of his key interventions to address racial inequality. Working with White House staff, HUD (Department of Housing and Urban Development), and Congress, FHFA (Federal Housing Finance Agency), and other related federal agencies, we have given multiple different suggestions and many of them are being implemented. In fact, just this week, I’m working with a group who is helping Fannie Mae and Freddie Mac change the actual appraisal form to have fewer racial primers in the defining of comparable sales.

All that to say, Elizabeth and I are working on multiple types of interventions from policy advocacy to federal legal suits to introducing our own appraisal method. On the policy front, we are advocating for three types of changes. First, new tools and procedures that will systemize and equalize the current appraising approaches. Second, the release of federal appraisal data for more accountability and research. Third, housing reparations—not just reparations for the unjust policies of the 1930s but also what’s happened since the 1980s. Federally backed appraisal practices have ensured houses in White communities have appreciated seven times faster than housing in communities of color—directly impacting the growing racial wealth gap. This is not just past history and unknown people. These are current families, current communities that reparations can be given to.

Outside of traditional policy advocacy work, I have developed a new appraisal and lending method that is grounded in our empirical research and deliberately trying to push against settler colonial and racial capitalist conceptions of land. This summer, I incorporated a new nonprofit, eruka, that will eventually provide alternative, racially just appraisals and mortgages as well as work with local governments to derive more equitable ways of assessing land for tax purposes. Our goal is to cultivate equity across people and places by reimagining housing and financial services.

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